2020 Farm Income Higher Due to Government Payments

Net farm income, which is a broad measure of profits, is forecast to increase 36 billion dollars to $119.6 billion in 2020. Those numbers come from the USDA’s Economic Research Service. In inflation-adjusted 2020 dollars, net farm income is forecast to increase by 35 billion, the fourth-straight year the income numbers have gone up. If the prediction comes true, net farm income in 2020 in inflation-adjusted terms would be at its highest level since 2013 and 32 percent above the 2000-2019 average of $90.6 billion. However, cash receipts for all commodities are forecast to decrease by 3.2 billion dollars to $366.5 billion. Direct government farm payments are forecast at 46.5 billion dollars, an increase of $24 billion in nominal terms. Total production expenses, including operator dwelling costs, are forecast to decrease by 5.2 billion dollars to $343.6 billion in 2020. Interest expenses, livestock/poultry expenses, and oils/fuels costs are all expected to decline, but fertilizer costs and net rent to landlords are both expected to increase. The Economic Research Service says the predicted increase is due to the supplemental and ad hoc disaster assistance for COVID-19 relief.