Source: USDA ERS, 8/30/17


After 3 consecutive years of decline, farm sector profits are forecast to increase in 2017. Net cash farm income for 2017 is forecast at $100.4 billion, up $11.2 billion (12.6 percent) from 2016. Net farm income, a broader measure of profits, is forecast at $63.4 billion, up $1.9 billion (3.1 percent) relative to 2016. The stronger forecast growth in net cash income is largely due to an additional $9.7 billion in cash receipts from the sale of crop inventories. The net cash farm income measure counts those sales as part of current-year income while the net farm income measure counted the value of those inventories as part of prior-year income. Despite the forecast upturn in these profit measures relative to 2016, levels would be below all other years since 2010 (net farm income) and since 2011 (net cash farm income).

Cash receipts are forecast to rise $14.1 billion (4.0 percent) in 2017, led by a $13.6-billion (8.4 percent) increase in animal/animal product receipts. Dairy, poultry/egg, and hog receipts are up, reflecting expected increases in both price and quantity sold. Cattle/calf receipts are up, reflecting expected increases in the quantity sold. Overall, cash receipts for crops are forecast to remain mostly unchanged from 2016 as expected increases for some crops are offset by declines in others. Soybean, cotton, and vegetable/melon cash receipts are forecast to rise, while fruit/nut cash receipts are forecast to fall. Direct government payments are forecast to remain at just under $13.0 billion in 2017.

The 2017 forecast for farm business average net cash farm income is up by 5.8 percent, with the largest increases for farms specializing in dairy (up 42 percent), hogs (up 38 percent) and cotton (up 31 percent). The only declines in average net cash income are for farms specializing in specialty crops (down 15 percent) and other livestock (less than 1 percent).

After declining for 2 consecutive years, total production expenses are forecast up $4.6 billion (1.3 percent), led by increases in expenditures on interest, hired labor, and fuels/oil. Partially off-setting these increases are expected drops in feed and fertilizer/lime expenses.

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