Source:  USDA ERS, 2/10/15

Net farm income is forecast to be $73.6 billion in 2015, down nearly 32 percent from 2014’s forecast of $108 billion. The 2015 forecast would be the lowest since 2009 and a drop of nearly 43 percent from the record high of $129 billion in 2013. Lower crop and livestock receipts are the main drivers of the change in 2015 net farm income from 2014 as production expenses are projected up less than 1 percent. Net cash income is forecast at $89.4 billion, down about 22 percent from the 2014 forecast. Net cash income is projected to decline less than net farm income primarily because it reflects the sale of carryover stocks from 2014. 

Crop receipts are expected to decrease by $15.6 billion (7.9 percent) in 2015, led by a projected $6.7-billion decline in corn receipts and a $3.4-billion decline in fruit/nut receipts. Livestock receipts are forecast to decrease by $10.1 billion (4.9 percent) in 2015 largely due to lower milk prices. The implementation of new programs under the Agricultural Act of 2014 results in a projected 15-percent increase ($1.6 billion) in government payments. Total production expenses are forecast to increase by $2.5 billion (about 1 percent) in 2015, extending the upward movement in expenses for a sixth straight year.

The rate of growth in farm assets is forecast to slow in 2015 compared to recent years. The slowdown in growth is a result of lower net income leading to less capital investment, and a slight decline in farmland values. Farm sector debt is expected to increase 3.1 percent, well above the expected increase in the value of farm assets (0.4 percent). Most of the anticipated increase in debt is for nonreal estate loans, with lower income spurring demand for operating funds. Despite the anticipated higher debt, the historically low levels of debt relative to assets and equity reaffirm the sector’s relatively strong financial position despite 2 years of declining net farm income.

Increase Is Forecast for Median Income of Farm Operator Households in 2015
Median income of farm households is forecast to increase slightly in 2015, to $72,298, up from $70,718 projected for 2014. Given the broad USDA definition of a farm, many farms are not profitable even in the best farm income years. The projected median farm income of -$1,558 is essentially unchanged from the 2014 forecast of -$1,570. Most farm households earn all of their income from off-farm sources—median off-farm income is projected to increase 4 percent in 2015 to $66,361. (Note: Because they are based on unique distributions, median total income will generally not equal the sum of median off-farm and median farm income.) See more financial statistics for farm operator households.

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