USDA forecasts U.S. net farm income to increase $3.1 billion (3.3%) from 2019 to reach $96.7 billion in 2020. Net cash farm income, however, is forecast to decrease $10.9 billion (9%) from 2019 to $109.6 billion in 2020, according to USDA.
The difference between net farm income and net cash farm income is based on what is included in each forecast. Net cash farm income encompasses cash receipts from farming as well as farm-related income, including government payments, minus cash expenses, according to USDA, but it does not include noncash items—such as changes in inventories, economic depreciation, and gross imputed rental income of operator dwellings — reflected in the net farm income.
Some are playing up that USDA is “forecasting” a downturn in government payments. But that was well known or should have been ahead of the USDA update as no 2020 Market Facilitation Program (MFP) effort has been announced.
Total direct government farm program payments are seen at $14.98 billion in 2020, down $8.7 billion from $23.65 billion in 2019.
But farmers will still receive some MFP money in 2020 as USDA projects eligible producers will still get nearly $3.7 billion in MFP dollars.
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