Measures of farm income this year will reach their highest levels since 2013 and 2014 on the surge in government aid through coronavirus relief and trade assistance, the Agriculture Department says.
In a new farm income forecast released Wednesday, USDA's Economic Research Service estimated that net farm income would increase by 43.1%, or $36 billion, to $119.6 billion this year. That would be the highest inflation-adjusted sum since 2013.
Net cash farm income, considered the best measure of producers' cash flow, is expected to jump 22.6% to $134.1 billion, the highest inflation-adjusted total since 2014.
USDA raised both earnings estimates from its September forecast when net farm income for 2020 was projected to be $102.7 billion and net cash farm income was forecast at $115.2 billion.
The higher estimates reflect a fall run-up in commodity prices as well as the release of the second round of Coronavirus Food Assistance Program payments.
Government payments are forecast to total $46.5 billion this year, a 107.1% increase from 2019, and $9.3 billion more than ERS forecast in September. Government payments will make up 35.6% of net cash farm income.
Net cash farm income is based on cash receipts from farming, plus government payments and other farm-related income, minus cash expenses. Net farm income factors in non-cash items such as changes in inventories and depreciation.
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Government payments were originally expected to drop this year after the expiration of the Market Facilitation Programs of 2018 and 2019, but the onset of the coronavirus pandemic lead to the creation of a host of programs to support various facets of the economy, including agriculture. Many farmers and agribusinesses took advantage of the Paycheck Protection Program as well as two rounds of the CFAP payments. So far, both iterations of CFAP have paid out a combined $21.6 billion to producers.
Changes in commodity cash receipts are split between crops and livestock; total crop receipts are expected to rise $6.5 billion while livestock receipts are expected to drop $9.7 billion. Overall, total commodity cash receipts are forecast at $366.5 billion, a drop of just under 1% (or $3.2 billion) from 2019.
Soybean growers have benefited particularly from increased exports and and rise in prices in recent months. Sales are now estimated at $36.8 billion this year, up from $34.2 billion in 2019. Corn receipts are expected to be down $2.5 billion this year to $49.4 billion. Wheat sales are estimated to drop slightly to $8.6 billion. Cotton receipts are projected down $700 million to $5.6 billion.
Among animal products, revenue from broilers and cattle is expected to see the largest declines in cash receipts, while revenue from turkeys and eggs are projected up this year.
Vegetable and melon sales are expected to rise by 3.7% or $700 million, including a $500 million, or 12.3%, increase in potato receipts. Cash receipts for fruits and nuts are expected to be up $4.6 billion, or 16.1%, from 2019.
ERS lowered its 2020 estimate of farm production expenses by $5.2 billion to $343.6 billion. Expenses are expected to drop for interest, livestock purchases, and fuel and oil but are expected to increase in fertilizer and cash rent.
Farm household income, which includes money from farm and non-farm sources, is projected to increase to a median of $86,992 in 2020, an increase of about 4.7% over 2019 figures.
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