Looking up: Amended Farm Sector Income Forecast Yields Positive Growth
USDA’s latest Farm Sector Income Forecast, released Dec. 1, anticipates an increase in net farm income for 2022. U.S. net farm income is currently forecast at $160.5 billion, up 13.8%, or $19.5 billion, from 2021’s $140.4 billion.
This contrasts with both USDA’s original February estimates, which forecast a $5.4 billion (-4.5%) decline in net farm income, and USDA’s September estimates, which forecast an increase of only $7.3 billion (5.3%).
When adjusted for inflation, 2022 net farm income is expected to increase $10.7 billion (7.2%) from 2021 and be at the highest level since 1973. This is slightly more than 53% above the 20-year average of $104 billion in inflation-adjusted dollars.
The report also finds the largest increase in production expenses on record in both numerical and percentage terms, up nearly $70 billion across the farm economy (18.8%).
It is worth noting the wide variation in individual farmer net returns in 2022. Volatile markets have meant that when a farmer chose to book their fertilizer purchases or their crop sales, for instance, could have a large impact on their bottom line.
In addition, drought and natural disasters put regionally specific stress on many producers. Ever-changing federal, state, and local laws including labor and conservation requirements present complex institutional risk farmers must navigate.
Consideration must be given to individual and localized farm operation challenges to measure the health of the broader farm economy.
For more of Farm Bureau’s breakdown of the latest Farm Sector Income forecast from USDA, continue reading at fb.org.
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