USDA predicts 2022 median farm household income to fall slightly from 2021 because of inflation, less government aid

U.S. net farm income and net cash farm income, inflation adjusted, from 2002 to 2022 forecast
 (Agriculture Department chart; click the image to enlarge it.)

In its latest Farm Income Forecast, the Agriculture Department said it expects farm income in 2022 to rise 5.2%, to $147.7 billion, from last year, "with cash receipts for agricultural commodities at a record level. But higher production expenses and lower government Covid-19 payments are presenting some headwinds," Samuel Fromartz reports for Successful Farming. "The slight bounce in income comes after 2021, when farm income shot up $45.9 billion, or more than 48%, to the highest inflation-adjusted level since 2013. If 2022 income were adjusted for inflation — now at the highest level in decades — it would have declined 0.9 % from 2021 levels." Click here to read the report.

Other highlights from the report, which is released three times a year:

• Net cash farm income, a more precise measure of profits, is forecast at $168.5 billion in 2022, an increase of $22.1 billion (15.1 percent) relative to 2021. The 2021 value was $29.6 billion (25.4 percent) above 2020.
• When adjusted for inflation, 2022 net cash farm income is forecast to increase by $13.5 billion (8.7 percent) from 2021 and be at its highest level since 2012. Net cash farm income in 2022 would be 34.5 percent above its 2002–21 average of $125.3 billion.
• Cash receipts from the sale of agricultural commodities are forecast to increase by $91.7 billion (21.2 percent, in nominal terms) from 2021 levels to $525.3 billion in 2022. Total crop receipts are expected to increase by $36.4 billion (15.3 percent) from their 2021 level following higher receipts for soybeans, corn, and wheat.
• Total animal/animal product receipts are expected to increase even more from the previous year, by $55.3 billion (28.3 percent), following increases in receipts for all categories of animal/animal products. These increases would put total cash receipts in 2022 at their highest level on record, even after adjusting prior years for inflation.
• While cash receipts overall are expected to increase in 2022, lower direct Government payments and higher production expenses are expected to moderate income growth.
• Direct Government payments are forecast to fall by $12.8 billion (49.7 percent) from 2021 to $13.0 billion in 2022. The decrease is expected largely because of lower supplemental and ad hoc disaster assistance for Covid-19 relief in 2022 compared with 2021.
• Total production expenses, including operator dwelling expenses, are forecast to increase by $66.2 billion (17.8 percent) to $437.3 billion (in nominal terms) in 2022.
• Spending on all categories of expenses is expected to rise with the largest increase in fertilizer-lime-soil conditioner expenditures, up 44 percent.