USDA’s Economic Research Service forecasts inflation-adjusted U.S. net cash farm income (NCFI) — gross cash income minus cash expenses — to increase by $13.5 billion (8.7%) from 2021 to $168.5 billion in 2022. This is the highest level since 2012.

In comparison, U.S. net farm income (NFI) is forecast to fall by $0.9 billion (0.6%) from 2021 to $147.7 billion in 2022. This comes after NFI increased by $44.4 billion (42.6%) in 2021 to the highest mark since 2013. NFI is a broader measure of farm sector profitability that incorporates noncash items, including changes in inventories, economic depreciation, and gross imputed rental income. Both cash receipts and expenses are forecast to increase. Cash receipts for farm commodities are projected to rise by $66.3 billion (14.4%) from the previous year to $525.3 billion in 2022, their highest level on record. At the same time, production expenses are expected to increase by $44.4 billion (11.3%) to $437.3 billion in 2022, offsetting some of this income growth.

Additionally, direct Government payments to farmers are projected to fall by $14.3 billion (52.5%) from 2021 to $13.0 billion in 2022, primarily because of lower anticipated USDA and non-USDA payments for Coronavirus (COVID-19) pandemic assistance.