USDA sees farm profits falling but still well above average

USDA chart; click the image to enlarge it.

Despite record-high expenses and lower federal subsidies that will reduce their overall income, 2022 will still be one of the best years on record for American farmers, according to the Agriculture Department's Farm Income Forecast. USDA's Economic Research Service releases three such forecasts each year, typically in February, August and November (here's the last one before this). 

If the prediction holds, "It would be the second year in a row that net farm income, a USDA gauge of profitability, ran at sky-high levels, boosted by strong commodity prices and a boom in exports, with China back as the No. 1 customer," Chuck Abbott writes for the Food & Environment Reporting Network.

Here are some other highlights from the report:

• Net farm income, a broad measure of profits, is predicted to hit $113.7 billion in 2022, down from $119.1 billion in 2021 in inflation-adjusted dollars. If the projection holds true, net farm income would be 15.2% above its 2001-2020 average of $98.7 billion in inflation-adjusted dollars.
• Net cash farm income, a more precise measure of profits, is projected to hit $136.1 billion, a $2.9 billion (2.1%) decrease from 2021. If the projection holds true, net-cash farm income in 2022 would be 13.6% above its 2001-2020 average of $119.8 billion.
• Cash receipts from commodities sales are forecast to increase by $29.3 billion (6.8%) from 2021 to $461.9 billion. 
• Total crop receipts are expected to increase by $12 billion (5.1% from 2021 because of higher receipts for soybeans, corn, cotton, and wheat.
• Total receipts for animals and animal products are predicted to increase by $17.4 billion (8.9%) from 2021 because of higher receipts for milk, broilers, cattle and calves.
• Total cash receipts are expected to increase, but lower direct government payments and higher production expenses are predicted to counteract their net effects.
• Total farm household income is predicted to remain relatively flat, increasing 2.2% in inflation-adjusted dollars from $83,311 in 2021 to $88,234 in 2022.