by: Chris Zoller, Extension Educator, ANR, Tuscarawas County
The United States Department of Agriculture Economic Research Service (USD ERS) uses two measures, Net Cash Farm Income (NCFI) and Net Farm Income (NFI), to gauge the financial performance of the U.S. agriculture sector. This article summarizes a recent USDA Charts of Note publication. The complete report is available here: https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=103192.
U.S. Farm Income Projections – 2022
Net cash farm income is calculated by subtracting expenses from gross cash income. USDA ERS estimates this measure will decline 2.1 percent in 2022, compared to 2021. Net farm income is a broader measure of farm sector profitability that incorporates noncash items, including changes in inventories, economic depreciation, and gross imputed rental income. U.S. net farm income in 2022 is projected to be 7.9 percent lower than 2021. Should these forecasts be realized in 2022, both measures would still be above their respective 2001 – 2020 averages.
U.S. Farm Expense Projections – 2022
USDA ERS expects farm production costs to rise 1.5 percent in 2022, offsetting potential income gains. Farmers should not count on Government payments in the amounts distributed through previous COVID-19 pandemic assistance programs. Government payments are expected to fall by 58.5 percent from the amount received in 2021.
Planning for 2022
Continued supply chain issues, higher fertilizer and chemical prices, and other uncertainties make budgeting in 2022 even more critical. OSU Extension has several resources that can help you make informed decisions. Consider the following:
- Contact your OSU Extension Agriculture and Natural Resources Educator
- OSU Extension Enterprise Budgets for corn, soybeans, wheat, alfalfa, and corn silage: https://farmoffice.osu.edu/farm-management/enterprise-budgets
- Ohio Farm Business Analysis & Benchmarking Program, including crop and dairy enterprise summaries: https://farmprofitability.osu.edu/
- OSU Extension Farm Bill Decision Tool: https://farmoffice.osu.edu/farm-management-tools/decision-aids
- OSU Extension Custom Rates: https://farmoffice.osu.edu/farm-mgt-tools/custom-rates-and-machinery-costs
- OSU Extension eFields On-Farm Research Studies can provide information about reducing costs with reduced seeding rates: https://digitalag.osu.edu/efields
- OSU Extension Tri-State Fertilizer Recommendations for Corn, Soybean, Wheat, and Alfalfa: https://agcrops.osu.edu/FertilityResources/tri-state_info
- Considerations for Managing P & K: https://agcrops.osu.edu/newsletter/corn-newsletter/2022-03/considerations-managing-p-k-2022
- Fertility Calculator for Ohio Recommendations: https://agcrops.osu.edu/newsletter/corn-newsletter/2022-02/fertility-calculator-ohio-recommendation
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