Net farm income will increase 13.8 percent this year to $160.5 billion as operating expenses also continue to rapidly rise, according to the U.S. Department of Agriculture’s December 2022 Farm Income Forecast.
The jump in farm income follows a 49.3 percent surge last year. “When prior years are adjusted for inflation, net farm income is forecast to increase $10.7 billion or 7.2 percent in 2022 relative to 2021 and be at its highest level since 1973,” the USDA stated. “Net farm income in 2022 would be 53.3 percent above its 20-year average of $104.7 billion in inflation-adjusted dollars.”
The inflation-adjusted median income of farm operator households is expected to fall this year, despite an overall 2.8 percent increase to $94,794. Total production expenses are expected to increase by 18.8 percent to $442 billion. Farm business net cash income is expected to increase by nearly 9 percent to $110,600 per farm. Dairy farms are expected to see the largest growth, while farming operations specializing in crops, cotton and hogs are projected to see the largest drops.
“In recent years, around half of farm households had negative farm income each year,” the USDA stated. “Many farm households primarily rely on off-farm income.”
Farm sector equity is expected to increase by 10.6 percent to $3.34 trillion. Assets are projected to increase by 10 percent to $3.85 trillion. Farm sector debt is expected to increase by 6 percent to $501.9 billion but fall by less than a half-percent when adjusted for inflation. Debt-to-asset levels for the sector are expected to improve from 13.56 percent last year to 13.05 percent in 2022.
Other report findings included:
- Both inflation-adjusted total animal/animal product receipts and net cash farm income reached their highest marks since the USDA and Economic Research Service started tracking the statistics in 1929.
- Cash receipts from the sale of ag commodities are expected to increase 24 percent to $541.5 billion. Total crop receipts are expected to increase by 19 percent to $45.5 billion.
- The amount of cash available to fund operating expenses after paying off debt is projected to increase 4.7 percent in nominal dollars while falling 1.4 percent when adjusted for inflation.