Impact of COVID-19 on Agriculture

USDA Projects Increase for 2021 Farm Income

News / Newsline September 2, 2021

Credit: Arkansas Farm Bureau, used with permission. 

A new forecast from USDA projects increased net farm income in 2021. Micheal Clements shares the details.

Clements: For fiscal year 2021, the Department of Agriculture projects net farm income to increase $18.5 billion from 2020, or 19.5 percent, to $113 billion. Veronica Nigh, American Farm Bureau Federation Senior Economist, says the forecast puts net farm income at the highest level since 2013.

Nigh: We hit a low of $62 billion back in 2016. So, reaching $113 billion in 2021 is certainly an impressive turnaround for the sector. Sixty-eight percent of that increase in receipts is due to a price impact, which means about 30 percent of that increase is due to increases in the quantity sold.

Clements: She says its largely attributed to increased commodity prices.

Nigh: On the crop side, obviously a significant increase in receipts from corn, soybeans and wheat, which are forecast to increase by $38 billion. But it's not all good news on the crop side, unfortunately, for specialty crop growers, vegetable and melon and fruit and nut cash receipts are projected down by over $4 billion. On the animal products, we're looking at an increase of $26 billion. On the dairy side, basically no change, which is the third year in a row, unfortunately, for our dairy sector that we haven't seen an increase.

Clements: Meanwhile, USDA projects total farm expenses up 7 percent from last year.

Nigh: Of course, that's influenced by an increase in fuel and oil prices, increase in fertilizer prices, and labor expenses. So, 7 percent is equivalent to about a $26 billion increase.

Clements: Micheal Clements, Washington.

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