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Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →The “eight-year high” referred to U.S. net farm income in 2021, not to a final 2022 result. In its September 1, 2022 forecast, USDA’s Economic Research Service (ERS) said 2021 net farm income had climbed to its highest level since 2013. ERS then expected 2022 net farm income to edge lower as production costs rose and pandemic-related government payments fell, even though strong commodity receipts were expected to offset some of that pressure.
What the eight-year high measured
Net farm income (NFI) is ERS’s broader measure of farm-sector profitability. It includes noncash items such as changes in inventories, economic depreciation, and imputed rental income. ERS reported that NFI increased by $44.4 billion, or 42.6 percent, in 2021, reaching its highest level since 2013. Those figures are from the agency’s September 2022 release and describe the estimate available in that release vintage. USDA ERS farm income forecast
Net cash farm income (NCFI) answers a different question: it is gross cash income minus cash expenses. Because it uses a cash-accounting scope rather than NFI’s broader one, the two measures can move differently. A higher NCFI forecast does not contradict a lower NFI forecast.
What USDA expected for 2022 in September
ERS’s September 1, 2022 forecast was a snapshot, not a final result. Its estimates were nominal dollars, not adjusted for inflation.
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| Measure or component | September 2022 forecast for 2022 | Change from 2021 |
|---|---|---|
| Net farm income (NFI) | $147.7 billion | Down $0.9 billion (0.6%) |
| Net cash farm income (NCFI) | $168.5 billion | Up $13.5 billion (8.7%) |
| Commodity cash receipts | $525.3 billion | Up $66.3 billion (14.4%); a record in the series described in that release |
| Production expenses | $437.3 billion | Up $44.4 billion (11.3%) |
| Direct government payments | $13.0 billion | Down $14.3 billion (52.5%) |
All values and changes in this table are from the September 2022 ERS forecast; they should not be read as final 2022 statistics. USDA ERS farm income forecast
Why the 2022 outlook had headwinds
Production costs were rising sharply
ERS forecast production expenses to increase by $44.4 billion to $437.3 billion in 2022, an 11.3 percent rise. Higher expenses put pressure on farm-sector income even as the outlook for sales improved.
Pandemic-related support was expected to recede
Direct government payments were forecast to fall by $14.3 billion, or 52.5 percent, to $13.0 billion. ERS attributed the expected decline primarily to lower pandemic-assistance payments. The comparison is with the prior year’s unusually elevated payments, not evidence that all farm support was ending.
Higher commodity receipts offered an offset
Commodity cash receipts were forecast to rise by $66.3 billion, or 14.4 percent, to $525.3 billion. ERS described that as a record for the series in its release. Stronger expected receipts helped counter rising expenses and lower direct payments, explaining why the September forecast showed NCFI increasing while NFI slipped slightly.
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Why later 2022 numbers do not match the September forecast
ERS updates its projections as more information becomes available. The agency says it issues four forecasts of profitability measures for each calendar year before publishing an official estimate. Therefore, a number labeled “2022 farm income” needs its release date and status: forecast, first estimate, or revised estimate. USDA ERS Farm Income and Wealth Statistics
In December 2022, ERS forecast inflation-adjusted 2022 NFI at $160.5 billion, then the highest since 1973 after inflation adjustment, and inflation-adjusted NCFI at $187.9 billion, a record. Those are a later forecast vintage and inflation-adjusted measures; they are not directly interchangeable with the nominal September figures.
On August 31, 2023, ERS released its first official estimate of 2022 NFI: $183.0 billion. That later estimate exceeded the September 2022 forecast of $147.7 billion. The difference reflects the progression from an early forecast to an estimate informed by additional data, not two competing final values for the same release date. USDA ERS Farm Income and Wealth Statistics
Later ERS updates may revise figures as additional production, sales, and monthly marketing data become available. For instance, the agency’s 2024 outlook report gives 2022 gross cash income of $648.3 billion, cash expenses of $425.0 billion, and net cash income of $223.3 billion, all in 2024 dollars. These are inflation-adjusted cash-accounting figures, not NFI, and should not be compared directly with the nominal forecasts above. USDA ERS, 2024 farm income outlook report
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How to read a farm-income headline
- Check the measure: NFI includes noncash items; NCFI is based on cash income and expenses.
- Check the release vintage: An early forecast, a later forecast, and an official estimate are not equivalent.
- Check the dollar basis: Nominal amounts and inflation-adjusted amounts (including the stated base year) require separate interpretation.
- Check the components: Receipts, expenses, and government payments help explain why an income measure rose or fell.
ERS’s current farm-income highlights are updated over time and may show newer estimates or forecasts. For the latest revised 2022 series, consult the agency’s Farm Income and Wealth Statistics rather than treating a 2022 forecast release as the latest estimate. USDA ERS farm income forecast
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