The United States Department of Agriculture (USDA) predicts net farm income will decline 8.3 percent in 2018, dropping $5.4 billion to $59.5 billion. Meanwhile, USDA’s Economic Research Service suggests net cash farm income will decline by $6.7 billion, or 6.8 percent, to an inflation-adjusted figure of $91.9 billion.
USDA says the forecast declines are the result of changes in cash receipts and production expenses. If realized, 2018 net farm income would be the lowest since 2002 and net cash farm income would the lowest since 2009. Both profitability measures remain below their 2000-2016 averages, which included substantial increases in crop and animal/, and animal product cash receipts from 2010 to 2013.
Net cash farm income includes cash receipts from farming, as well as farm-related income which includes government payments, minus cash expenses. Net farm income, a more comprehensive measure of profits, incorporates non-cash items such as changes in inventories, economic depreciation and gross imputed rental income.