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Economic activity driving farm incomes

An ag economist says while net farm income this year appears similar to last, there are some radical differences.

David Widmar with Agricultural Economic Insights tells Brownfield 2021 and this year are the third and fourth strongest years on record for net farm income.

“The economic activity of the farm sector has picked up significantly from that revenue component and it’s offset the higher production costs and the big decline in government payments,” he says.

Government payments to producers this year are $15 billion less than last by his calculations which Widmar says has been offset by increased crop (+$8 billion) and livestock (+43.5 billion) values.

“For producers, this is one of the strongest years in terms of farm profitability that they’re going to see throughout their careers,” he adds.  “This is going to help offset some of the challenges, uncertainties, and stresses that we’re facing from the broader economy.”

Widmar says expenses are currently forecast 13 percent higher than in 2021 and likely to remain elevated for the next growing season.