USDA’s Economic Research Service updated farm sector profit projections, which are expected to increase in 2021. ERS forecasts inflation-adjusted net cash farm income, which is gross cash income minus cash expenses, to increase $12.6 billion to $133 billion. U.S. net farm income is forecast to increase by $18.4 billion from 2020 to $116.8 billion in 2021.
Net farm income is a broader measure of farm sector profitability that incorporates noncash items, including changes in inventories, economic depreciation, and gross rental income. At that level, net farm income would be 24.2 percent above its 2000–2020 average of $94 billion and the highest since 2013. Inflation-adjusted net cash farm income would be 16.9 percent above its 2000–2020 average of $113.8 billion and the highest since 2014.
Production expenses are expected to grow by $16.3 billion during the same period, somewhat moderating income growth. Additionally, direct government payments to farmers are projected to fall by $20.2 billion in 2021.