Although many headlines focus on a declining farm income in 2021, the net farm income outlook is still well-above average and offers a positive story for 2021, says Carrie Litkowski, economist at USDA’s Economic Research Service of the USDA.
USDA currently expects net cash income to finish 2020 at $136.2 billion, but to fall to $128.3 billion in 2021. USDA expects net farm income, which includes the value of inventory changes, to decrease $9.8 billion (8.%1) to $111.4 billion in 2021. Despite this decline, 2021 net farm income would still be 21% above its 2000-19 average of $92.1 billion.
While speaking at the USDA Agricultural Outlook Forum on Feb. 19, Litkowski outlines that government payments are forecast to have more than doubled in 2020, to a record level of $46 billion. This increase was due in large part to supplemental and ad hoc disaster assistance payments to farmers for COVID-19 relief. In 2021 government payments are forecast to decline 45% in nominal dollars.