Note: The detailed historical estimates of U.S. and State-Level Farm Income and Wealth Statistics are temporarily unavailable while coding problems with the underlying database are being corrected.
Errata: On November 26, 2014, the ERS farm income estimates for 2008-2013, released on November 25, were revised to correct coding problems in the underlying farm income database. At the U.S. level, these corrections increased 2013 net farm income by 3 percent, to $126.5 billion. Other measures affected include total value of production, gross and net value added, the value of inventory change, and their respective crop components.
Farm Sector Profitability Expected To Weaken in 2014
Net farm income is forecast to be $96.9 billion in 2014, down over 23 percent from 2013’s estimate of $126.5 billion. The 2014 forecast would be the lowest since 2010, but would remain $14.5 billion above the previous 10-year average. Offsetting changes in crop and livestock receipts leaves higher expenses as the main driver of changes in 2014 net farm income from 2013. Net cash income is forecast at $108.2 billion, down over 19 percent from the 2013 estimate. Net cash income is projected to decline less than net farm income primarily because it reflects the sale of carryover stocks from 2013.
Crop receipts are expected to decrease by $27.2 billion (12.3 percent) in 2014, led by a projected $10.5-billion decline in corn receipts and a $7.9-billion decline in soybean receipts. Livestock receipts are forecast to increase by $25.7 billion (14 percent) in 2014 largely due to anticipated record prices for beef cattle and milk. The elimination of direct payments under the Agricultural Act of 2014 results in only a projected 4-percent decline in government payments due to offsetting supplemental and ad hoc disaster assistance payments related to drought. Total production expenses are forecast to increase $19.8 billion in 2014 extending the upward movement in expenses that has occurred over the past 5 years.
The rate of growth in farm assets is forecast to diminish in 2014 (2.4 percent) compared to recent years. The slowdown in growth is a result of lower net income leading to less capital investment, and moderation in the growth of farmland values. Farm sector debt is expected to increase 3.1 percent increasing more than assets for the first time since 2009. 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 strong financial position.
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Slight Decline Is Forecast for Median Farm Household Income in 2014
Median total farm household income is forecast to decrease slightly in 2014, to $70,564, down from $71,697 in 2013. Given the broad USDA definition of a farm, many farms are not profitable even in the best farm income years. The median farm income forecast for 2014, at -$1,682, is down slightly from the 2013 estimate of -$1,141. Most farm households earn all of their income from off-farm sources—median off-farm income is projected to increase 3.7 percent in 2014 to $64,825. (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.
Get the 2014 forecast for farm household income.