Net farm income is forecast to be $96.9 billion in 2014, down 23.4 percent from 2013’s estimate of $126.5 billion. The 2014 forecast would be the lowest since 2010, but would remain $14.5 billion above the previous 10-year average ($82.4 billion). After adjusting for inflation, 2013’s net farm income was the highest since 1973. In comparison, the 2014 net farm income forecast would be the sixth highest. Net cash income is forecast at $108.2 billion, down 19.4 percent from the 2013 estimate. Net cash income is projected to decline less than net farm income primarily because it includes the sale of carryover stocks from 2013. Net farm income reflects only the earnings from production that occurred in the current calendar year.

Highlights

  • Net farm income is forecast to fall by over 23 percent from 2013, but would still be $14.5 billion above the previous ten year average. Net cash income is forecast to decline by over 19 percent from 2013.
  • Total production expenses are forecast to be 5.7 percent higher in 2014, which would be the fifth consecutive increase since last falling in 2009.
  • Livestock receipts are expected to increase by more than 14 percent in 2014 ($25.7 billion) due to a 23-percent increase in dairy, a 19-percent increase in cattle, and an 8-percent increase in hog receipts.
  • Crop receipts are expected to decrease 12 percent in 2014 ($27.2 billion), led by a $10.5-billion decline in corn and a $7.9-billion drop in soybean receipts.
  • The elimination of direct payments under the Agricultural Act of 2014 is partially offset by higher payments for supplemental disaster assistance, resulting in a net 4-percent decline in projected government payments.
  • Farm equity is projected to reach another record, despite a substantial slowdown in asset growth and expected higher debt levels.
  • Farm financial risk indicators such as the debt-to-asset ratio are expected to continue at historically low levels.