U.S. Farm Income Outlook: December 2020
February 9, 2021
Forecast
Randy Schnepf
The U.S. Department of Agriculture (USDA) projects that U.S. farm profitability —as measured
Specialist in Agricultural
by net farm income and net cash income—increased substantially in 2020 from 2019 levels. In
Policy
nominal dollars (not adjusted for inflation), both income measures are projected to attain their

highest levels since 2013. Net farm income (calculated on an accrual basis) was projected to rise
Stephanie Rosch
43.1% year-over-year in 2020 to $119.6 billion, up $36.0 billion from last year. Net cash income
Analyst in Agriculture
(calculated on a cash-flow basis), was projected at $134.1 billion in 2020, up $24.7 billion or
Policy
22.6% from 2019.

The year-to-year increase in both net farm income and net cash farm income is primarily due to a

substantial increase in direct government payments to a record $46.5 billion in 2020. At this
level, government support payments would account for nearly 39% of net farm income—the highest share since the year
2000, when government subsidies accounted for 46% of net farm income. In contrast with federal direct payments to
producers, farm income from cash sales of crop and livestock products and other farm-related activities were forecasted to
decline by 0.9% in 2020.
The record government farm assistance in 2020 included $12.6 billion from farm programs authorized by the 2018 farm bill
(P.L. 115-334) and $33.9 billion in ad hoc (i.e., authorized outside of omnibus farm legislation) program outlays, including
$3.7 billion from the 2019 Market Facilitation Program (MFP) payments, $5.9 billion from the Paycheck Protection Program
(PPP), and $24.3 billion from the Coronavirus Food Assistance Program (CFAP). If realized, the 2020 government payments
of $46.5 billion would represent a 107.1% increase from 2019’s $22.4 billion in government support, and would nearly
double the previous record of $24.4 billion (nominal dollars) in 2005.
Farm asset values in 2020 were projected at $3.1 trillion, up 1.5% from 2019. Farm asset values reflect farm investors’ and
lenders’ expectations about long-term profitability of farm sector investments. Another measure of the farm sector’s well-
being is aggregate farm debt, which was projected to be at a record $435.2 billion in 2020—up 4.0% from 2019. Both the
debt-to-asset and the debt-to-equity ratios have risen for eight consecutive years as both ratios inch upward toward their long-
run historical averages. At the farm household level, average farm household incomes have been well above average U.S.
household incomes since the late 1990s. However, this advantage derives primarily from off-farm income as a share of farm
household total income.
USDA will continue to fine-tune farm income estimates for 2020 as more and better data become available through 2021.
USDA released its first forecast of U.S. farm income for 2021 on February 5, 2021. Farm prices for corn, soybeans, wheat,
and cotton ended 2020 on an upswing—driven by a declining outlook for carryover stocks and increasing international
demand. Despite this hopeful pattern for commodity prices, the outlook for 2021 farm income remains clouded by several
critical uncertainties. The potential speed at which the economic effects of the Coronavirus Disease 2019 (COVID-19)
pandemic could be abated as vaccination distribution expands nationwide is unknown. This may be critical to when and how
the general economy will recover and consumer demand patterns return to normal. Another uncertainty is whether
agricultural and food supply chains will emerge in a more resilient and responsive form that revives investment and growth at
both the producer and retail levels. Finally, despite the signing of a Phase One trade agreement with China on January 15,
2020, it is unclear how soon—if at all—the United States may resume normal trade with China.
USDA Farm Income Projections as of December 2, 2020
The most recent aggregate national net farm income projections for calendar year 2020 were issued
by USDA’s Economic Research Service (ERS) on December 2, 2020. This is the third of three ERS
forecasts for 2020: the first farm income forecast was announced on February 5, 2020. The second
forecast was released on September 2, 2020.
The first USDA forecast of U.S. net farm income for 2021 occurred on February 5, 2021, and wil be
discussed in a separate report.

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Introduction
The U.S. Department of Agriculture (USDA) periodical y forecasts several economic measures of
the U.S. agricultural sector as an aid to Congress and policymakers who monitor and respond to
the changing health of the U.S. farm sector. From among these economic measures, annual U.S.
net farm income is the most-watched indicator of farm sector wel -being. Net farm income
measures the profitability of U.S. crop and livestock production.1 In a single statistic, it captures
and reflects the entirety of economic activity across the range of production processes, input
expenses, and marketing conditions that have prevailed during the calendar year.2 When national
net farm income is reported together with a measure of the national farm debt,3 the two summary
statistics provide quick and widely referenced indicators of the economic wel -being of the
national farm economy.
USDA also measures and reports net cash income in tandem with net farm income. Net cash
income uses a cash-flow basis to compare cash receipts to cash expenses, while net farm income
uses an accrual basis to include the value of farm production as wel as noncash balance sheet
items, such as capital replacement, implicit rent, home consumption, and other noncash income
and expenses.4
This report discusses the results of the third of three official USDA national farm income outlook
forecasts released for 2020 (see box “ERS’s Annual Farm Income Forecasts” in the Appendix)
by USDA’s Economic Research Service (ERS).5 This release of December 2, 2020, provided the
most comprehensive view of annual net farm income for the year because harvests were close to
completion for most crops, and a substantial share of the harvested crops already had been sold.
However, USDA wil continue to fine-tune farm income estimates for 2020 as more and better
data become available through 2021. This report’s Appendix has a discussion of how the
December forecast aligns with prior forecasts from earlier in 2020.
USDA Forecasts Higher Farm Income in 2020
U.S. farm profitability—as measured by net farm income and net cash income—was projected to
increase substantial y in 2020 from 2019 levels. In nominal dollars (not adjusted for inflation),
both measures were projected to attain their highest level since 2013. Net farm income was
projected to rise 43.1% year-over-year in 2020 to $119.6 bil ion, up $36.0 bil ion from last year
(Table 1). Net cash income (calculated on a cash-flow basis) was projected at $134.1 bil ion in
2020, up $24.7 bil ion or 22.6% from 2019.

1 See the box “Measuring Farm Profitability” in the Appendix for definitions of net farm income and its companion net
cash incom e.
2 T he Appendix includes supporting tables and charts that provide additional details on the Economic Research
Service’s (ERS’s) farm income forecast.
3 For example, the debt-to-asset or debt-to-equity ratios are discussed in “ Farm Finances: Assets, Debt, and Equity.”
4 A major difference between the two measures of net income is their different treatment of unsold harvested crops. Net
farm income includes a crop’s value after harvest , even if it remains in on-farm storage. In contrast, net cash income
includes a crop’s value only when it is sold. T hus, crops placed in on -farm storage are included in net farm income but
not net cash income. Net cash income tends to be more stable on a year -to-year basis than net farm income, as farm
households will adjust their sales from on-farm inventories to meet both farm business and household cash -flow needs.
5 USDA, ERS, “Webinar: Farm Income and Financial Forecasts, December 2020 Update,” December 2, 2020, at
https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/webinars-on-forecast-highlights/.
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Table 1. Annual U.S. Farm Income ($ Billions) Since 2017, Including 2020 Forecasts

2019 to 2020
Item
2017
2018
2019
2020F

Difference Change (%)a
Cash Income Statement

1. Cash receipts
370.4
371.4
369.7
366.5

-3.2
-0.9%
Cropsb
194.9
195.1
193.7
200.2

6.5
3.3%
Livestock
175.6
176.3
176.0
166.3

-9.7
-5.5%
2. Government paymentsc
11.5
13.7
22.4
46.5

24.0
107.1%
PLC-ARCd
7.0
3.2
3.0
6.1

3.1
106.3%
Marketing loan benefitse
0.0
0.0
0.0
0.2

0.2
2,154.8%f
Conservation
3.8
4.0
3.8
3.8

0.0
0.4%
Disaster and emergencyg
0.7
0.9
1.4
2.2

0.8
54.0%
Al otherh
0.0
5.6
14.5
34.1

19.6
135.3%
3. Farm-related incomei
31.2
29.1
34.7
34.1

-0.6
-1.8%
4. Gross cash income (1+2+3)
413.2
414.2
426.9
447.1

20.2
4.7%
5. Cash expensesj
311.9
311.4
317.5
313.0

-4.5
-1.4%
6. NET CASH INCOME
101.3
102.8
109.4
134.1

24.7
22.6%
Farm Income Statement

7. Total gross revenuesk
413.2
414.2
426.9
447.1

20.2
4.7%
8. Non-money incomel
18.3
19.1
18.4
19.5

1.2
6.3%
9. Inventory adjustment
-6.0
-8.2
-12.9
-3.4

9.5
-73.4%
10. Total gross income
425.4
425.1
432.3
463.2

30.9
7.1%
11. Total production expensesm
350.4
343.8
348.7
343.6

-5.2
-1.5%
12. NET FARM INCOME
75.1
81.3
83.6
119.6

36.0
43.1%
Source: Congressional Research Service (CRS) using data from USDA, Economic Research Service (ERS), “Farm
Income and Wealth Statistics: U.S. and State Farm Income and Wealth Statistics,” updated as of December 2,
2020. NA = not applicable.
Notes: F = forecast.
a. Change represents year-to-year projected change between 2019 and the December 2 forecast for 2020.
b. Includes Commodity Credit Corporation loans under the farm commodity support program.
c. Government payments reflect payments made directly to al recipients in the farm sector, including
landlords. The nonoperator landlords’ share is offset by its inclusion in rental expenses paid to these
landlords and thus is not reflected in net farm income or net cash income.
d. PLC = Price Loss Coverage. ARC = Agriculture Risk Coverage.
e. Includes loan deficiency payments, marketing loan gains, and commodity certificate exchange gains.
f.
In 2020, USDA made Marketing Assistance Loan (MAL) payments of $169 mil ion compared with $7 mil ion
in 2019.
g. Includes payments made under the Wildfire and Hurricane Indemnity Program (WHIP).
h. Includes ad hoc programs such as the Market Facilitation Program (MFP), Coronavirus Food Assistance
Program (CFAP), and the cotton ginning cost-share program, as wel as the biomass crop assistance
program, milk income loss, and other miscel aneous payments.
i.
Income from crop insurance indemnities, custom work, machine hire, agritourism, forest product sales, and
other farm sources.
j.
Excludes depreciation and perquisites to hired labor.
k. Total gross revenue (#7) is the same as gross cash income (#4).
l.
Value of home consumption of farm products plus the imputed rental value of operator and hired labor
dwel ings.
m. Cash expenses (#5) plus depreciation and perquisites to hired labor.
The year-to-year increase in both net farm income and net cash farm income is due to record
government payments of $46.5 bil ion in 2020. At this level, government support payments
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U.S. Farm Income Outlook: December 2020 Forecast

account for nearly 39% of net farm income—the highest share since the year 2000, when
government subsidies accounted for 46% of net farm income.
In contrast to federal direct payments, farm income from cash sales of crop and livestock products
(-0.9%) and other farm-related activities (-1.8%) were forecasted to decline from 2019.
Additional y, sales from on-farm inventories from prior years’ crops are expected to make a
smal er contribution to net cash income in 2020 than in 2019 (Table 1). The 2020 net cash
income forecast of $134.1 bil ion included $3.4 bil ion in sales from on-farm inventories. In 2019,
sales of on-farm crop inventories contributed $12.9 bil ion to net cash income.
When adjusted for inflation and represented in 2019 dollars (Figure 1), both the net farm income
and net cash income for 2020 were projected to be above their average values since 1940 of $88.5
bil ion and $101.4 bil ion, respectively. The net farm income forecast for 2020 was the third
highest in inflation-adjusted terms since 1973.
Figure 1. U.S. Farm Sector Inflation-Adjusted Income, 1940-2020F

Sources: CRS using data from USDA, ERS, “2020 Farm Sector Income Forecast,” December 2, 2020. Al values
are adjusted for inflation using the chain-type gross domestic product (GDP) deflator, where 2019 = 100. Bureau
of Economic Analysis (BEA), real GDP chained dol ars (accessed December 11, 2020), coupled with projections
from the Congressional Budget Office, July 2020. Values for 2020 are forecasts.
For historical perspective, both net cash income and net farm income achieved inflation-adjusted
peaks three times since 1940: first, in the late 1940s when U.S. exports were flowing into war-
torn Europe; second, in the mid-1970s when oil and commodity markets experienced surges in
prices; and final y, during the 2011-2014 period when prolonged widespread drought impacted
U.S. crop yields and reduced available supplies.
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Farm Sector Revenues
Farms earn revenue from three principal sources: cash receipts from crop and livestock
production activities; government direct payments; and other on-farm activities.
Cash Receipts for Crop and Livestock Production
Cash receipts for crop and livestock production in 2020 were projected to be down 0.9% relative
to 2019 (Table 1). Crop receipts were forecasted to increase by $6.5 bil ion in 2020, but these
gains were more than offset by a forecast decline of $9.7 bil ion for livestock receipts.
Table 2. U.S. Farm Sector Cash Receipts from Production of Commodities
Share
Share
Change:
Commodities
All
Suba
2017
2018
2019
2020F
2019 to 2020

———————$ Bil ion——————
$ Bil ion
%
Row Crops
31.1%
59.1%
115.2
117.7
115.0
114.9
-0.2
-0.1%
Corn
12.3%
23.4%
45.6
48.6
49.4
46.9
-2.5
-5.1%
Soybeans
10.4%
19.8%
38.5
37.0
34.2
36.8
2.6
7.5%
Wheat
2.3%
4.5%
8.7
9.5
8.7
8.6
-0.1
-1.0%
Cotton
2.0%
3.9%
7.6
7.5
7.2
6.6
-0.6
-7.8%
Hay
1.7%
3.3%
6.4
6.9
7.6
7.8
0.2
2.9%
Rice
0.7%
1.2%
2.4
2.5
2.8
2.7
0.0
-0.6%
Peanuts
0.4%
0.7%
1.4
1.5
1.1
1.2
0.2
14.4%
Other row cropsb
1.2%
2.3%
4.6
4.1
4.2
4.3
0.1
2.5%
Specialty Crops
21.5%
40.9%
79.7
77.4
78.7
85.3
6.6
8.4%
Fruits and nuts
8.3%
15.7%
30.6
29.2
28.8
33.4
4.6
16.1%
Vegetables/Melons
5.5%
10.5%
20.5
18.5
18.9
19.6
0.7
3.7%
Al other cropsc
8.1%
15.4%
30.0
31.0
32.0
33.1
1.1
3.5%
Total Crops
53%
100%
194.9
195.1
193.7
200.2
6.5
3.3%
Livestock Products

Cattle and calves
18.1%
38.1%
66.9
67.0
66.2
62.3
-4.0
-6.0%
Hogs
5.7%
12.0%
21.0
20.9
22.0
20.9
-1.1
-5.1%
Al dairy
10.2%
21.6%
7.9
35.2
40.5
40.4
-0.1
-0.2%
Poultry and eggs
11.6%
24.4%
42.8
46.2
40.4
35.8
-4.6 -11.4%
Other livestockd
1.9%
3.9%
6.9
6.9
6.9
7.0
0.1
1.2%
Total Livestock
47%
100%
175.6
176.3
176.0
166.3
-9.7
-5.5%
GRAND TOTAL
100%
na
370.4
371.4
369.7
366.5
-3.2
-0.9%
Source: CRS using data from USDA, ERS, “Farm Business Income,” December 2, 2020.
Notes: F = forecast.
a. Sub = Subcategory. There are two subcategories: “total crops” and “total livestock.”
b. Other row crops include other feed grains, hay, and minor oilseeds.
c. Al other crops include sugar beets, sugarcane, hops, mint, mushrooms, and other miscel aneous crops.
d. Other livestock includes aquaculture, sheep and lambs, honey, mohair, wool, pelts, and other miscel aneous
animal products.
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U.S. Farm Income Outlook: December 2020 Forecast

For row crops, cash receipts were forecasted to decline by 0.1%, with the bulk of the decline
coming from sales of corn, cotton, and wheat (Table 2). USDA forecasts higher prices for corn,
cotton, and wheat for the 2020-2021 marketing year (Table A-2); however, 2020 cash receipts
also include sales for the 2019-2020 marketing year, which had relatively lower prices for these
commodities. For specialty crops, cash receipts were forecasted to increase by 8.4%, the bulk of
the increase coming from sales of fruits and nuts.
With respect to livestock production, cash receipts were forecasted to be lower for poultry and
eggs (-11.4%), for cattle and calves (-6.0%), for hogs (-5.1%), and for dairy (-0.2%). These
declines are driven by declines in market prices (Table A-2), as domestic production of beef,
pork, broilers, and dairy were forecasted to increase in 2020 relative to 2019 levels (Table 10).
Government Payments
USDA projected government direct payments to U.S. farmers and landowners at a record $46.5
bil ion in 2020. If realized, the $46.5 bil ion would be the largest annual federal subsidy outlay to
the agricultural sector on record in both nominal and inflation-adjusted dollars.6 Furthermore, it
accounted for 39% of net farm income (Figure 2)—the largest share since 2000, when
government payments of $23.2 bil ion (nominal dollars) accounted for 46% of net farm income.7
Figure 2. Net Farm Income by Source, 1996-2020F

Source: CRS using data from USDA ERS, “2020 Farm Sector Income Forecast,” December 2, 2020. Sources of
net farm income, expressed as percentage shares (right-hand side), are for 2020. Values for 2020 are forecasts.

6 Indirect subsidies, such as crop insurance premium subsidies, are not included in the $46.5 billion subsidy total.
7 T he government share of net farm income peaked at 65.2% in 1984 during the height of the farm crisis of the 1980s.
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U.S. Farm Income Outlook: December 2020 Forecast

The record government farm assistance in 2020 included $12.6 bil ion from traditional farm
programs authorized under the 2018 farm bil (P.L. 115-334)8 and $33.9 bil ion from ad hoc
programs—authorized outside of traditional farm omnibus legislation in response to the
Coronavirus Disease 2019 (COVID-19) pandemic, as wel as continuing support for trade-related
market disruptions.9 If realized, the federal subsidies of $46.5 bil ion would represent a 107.1%
increase from 2019’s $22.4 bil ion in government support and would easily surpass the previous
record farm subsidy outlay of $24.4 bil ion (nominal dollars; $31.4 bil ion in 2019 dollars) in
2005 (Table 1 and Figure 3).
Figure 3. U.S. Government Farm Support, Direct Outlays, 1996-2020F

Source: CRS using data from USDA ERS, “2020 Farm Sector Income Forecast,” December 2, 2020. Al values
are adjusted for inflation using the chain-type GDP deflator, where 2019 = 100. Values for 2020 are forecasts.
Government payments as percentage shares (right-hand side) are for 2020.
Notes: Data are on a calendar-year basis and reflect the timing of the actual payment. “Direct Payments”
include production flexibility contract (PFC) payments enacted under the 1996 farm bil and fixed direct
payments (DP) of the 2002 and 2008 farm bil s. “Price-Contingent” outlays include loan deficiency payments,
marketing loan gains, countercyclical payments (CCP), Average Crop Revenue Election (ACRE), Price Loss
Coverage (PLC), Agriculture Risk Coverage (ARC), the dairy Margin Protection program (MPP), and Dairy
Margin Coverage (DMC) payments. “Conservation” outlays include CRP payments along with other
conservation program outlays. “Ad Hoc and Permanent Disaster Assistance” is divided into payments under the
2018 and 2019 Market Facilitation Programs (MFP), Paycheck Protection Program (PPP), both rounds of the
Coronavirus Food Assistance Program (CFAP), Market Loss Assistance (MLA), and “Disaster Assistance”
programs, each of which is identified with a different blue pattern. “Disaster Assistance” is an aggregate category

8 CRS Report R45730, Farm Commodity Provisions in the 2018 Farm Bill (P.L. 115 -334).
9 See CRS Report R45310, Farm Policy: USDA’s 2018 Trade Aid Package; CRS Report R45865, Farm Policy:
USDA’s 2019 Trade Aid Package; CRS Report R46395, USDA’s Coronavirus Food Assistance Program: Round One
(CFAP-1); and CRS Report R46645, USDA’s Coronavirus Food Assistance Program : Round Two (CFAP -2).
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U.S. Farm Income Outlook: December 2020 Forecast

that includes supplemental crop and livestock disaster payments and other emergency payments to the
agriculture sector, such as payment made under the Wildfire and Hurricane Indemnity Program (WHIP).
“Miscel aneous” outlays include payments under the cotton ginning cost-share, biomass crop assistance, peanut
quota buyout, milk income loss contract, tobacco transition, and other miscel aneous payment programs.
Traditional Farm Revenue-Support Programs
Historical y, direct government farm program payments have included a mixture of support but
have come primarily from programs authorized by omnibus farm legislation.10 These programs
have included the payments listed below.
 Direct payments (decoupled payments based on historical planted acres),11 which
were terminated by the 2014 farm bil (P.L. 113-79).
 Price-contingent payments (both coupled and decoupled program outlays linked
to market conditions) include the benefits available under the Marketing
Assistance Loan (MAL) program, the Agriculture Risk Coverage (ARC) and
Price Loss Coverage (PLC) programs, and the Dairy Margin Coverage (DMC)
program. Payments under price contingent programs were projected at $6.3
bil ion in 2020—including $5.0 bil ion for PLC, $1.1 bil ion for ARC, $184
mil ion for DMC, and $169 mil ion for MAL.12
 Conservation programs include al conservation programs operated by USDA’s
Farm Service Agency and the Natural Resources Conservation Service that
provide direct payments to producers. Conservation payments were forecasted at
$3.8 bil ion for 2020, unchanged from 2019.13
 Agricultural disaster assistance includes payments under the four permanent
disaster assistance programs—the Livestock Indemnity Program (LIP), Livestock
Forage Program (LFP), Tree Indemnity Program (TIP), and Emergency
Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP)—
as wel as payments under emergency supplemental programs (described
below).14 Outlays under the four permanent disaster assistance programs were
projected at $543 mil ion in 2020.
 Other miscel aneous legislatively authorized payment programs include the
biomass crop assistance program, peanut quota buyout, milk income loss,
tobacco transition, and other miscel aneous programs. Miscel aneous program
outlays were projected at $29 mil ion in 2020.

10 Government farm payments do not include premium subsidies or indemnities paid under the federal crop insurance
program—indemnity payments are included as “ farm-related income.” Also, government payments do not include
USDA loans, which are listed as a liability in the farm sector’s balance sheet.
11 Decoupled means that payments are not linked to current producer behavior and, instead, are based on some other
measure outside of the producer’s decisionmaking sphere, such as historical acres planted to program crops.
Decoupling of payments is intended to minimize their influence on producer behavior.
12 For details, see CRS Report R43448, Farm Commodity Provisions in the 2014 Farm Bill (P.L. 113 -79); and CRS
Report R46561, U.S. Farm Policy: Revenue Support Program Outlays, 2014 -2020.
13 CRS Report R45698, Agricultural Conservation in the 2018 Farm Bill.
14 Fiscal year payments generally involve outlay commitments incurred during the previous crop year. For example,
FY2019 disaster assistance payments are primarily related to disasters for crops that were grown and harvested in 2018.
For information on available farm disaster programs, see CRS Report RS21212, Agricultural Disaster Assistance.
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U.S. Farm Income Outlook: December 2020 Forecast

Ad Hoc and Emergency Supplemental Payments
Since 2018, ad hoc programs initiated by the Trump Administration, outside of traditional farm-
bil authorities, have played an increasingly important role in supporting farm incomes.15 These
include the Market Facilitation Program (MFP) payments to offset retaliatory tariff damages
(2018-2020) and the Coronavirus Food Assistance Program (2020) in response to the COVID-19
pandemic.
In addition, Congress has frequently authorized emergency supplemental crop and livestock
disaster payments—but outside of omnibus farm legislation—that have targeted the agricultural
sector in response to natural disasters, such as the Wildfire and Hurricane Indemnity Program
(WHIP). Most of the $2.2 bil ion in agricultural disaster and emergency payments projected for
2020 were expected to come from WHIP Plus, enacted through the Disaster Relief Act of 2019
(P.L. 116-20).16
The 2018 and 2019 MFPs—initiated by USDA using authority under the CCC Charter Act of
1938—represented USDA’s attempt to provide “trade-damage” payments to U.S. producers in
response to retaliatory tariffs by other countries, including China.17 Payments under the two
MFPs were expected to total $23.1 bil ion spread over 2018 to 2020.18 On September 9, 2020,
USDA announced a new MFP-like program—referred to as the Seafood Trade Relief Program
(STRP)—valued at $530 mil ion targeted U.S. seafood products that had been affected by
retaliatory tariffs.19 However, seafood is not included as part of ERS farm income forecasts. In
addition, no further MFP payments have been announced for 2021 by either the Trump
Administration or the current Biden Administration.
The surge in federal subsidies in 2020 was driven by large ad hoc payments made under three
Trump Administration-initiated programs: $3.7 bil ion in remaining payments under the 2019
MFP, $5.9 bil ion from the Paycheck Protection Program (PPP), and $24.3 bil ion from two
rounds of payments under the Coronavirus Food Assistance Program (CFAP1 and CFAP2). The
PPP and CFAP programs were designed to address COVID-19-related damages that occurred
during 2020.
With respect to CFAP, USDA al ocated $16 bil ion in funding for the first round (CFAP1) and up
to an additional $14 bil ion for the second round (CFAP2).20 As of December 28, 2020, $10.5
bil ion of CFAP1 and $13.0 bil ion of CFAP2 funding had been dispersed.

15 Previous historically important ad hoc programs have included the Market Loss Assistance (MLA) payments for
relief of low commodity prices (1998-2001) and the Cotton Ginning Cost -Share program (2016 and 2018).
16 CRS In Focus IF11539, Wildfires and Hurricanes Indemnity Program (WHIP).
17 USDA initiated the two trade aid packages with up to $28 billion of financial support designed to partially offset the
negative price and income effects of lost commodity sales to major markets. T he 2018 trade aid package was valued at
up to $12 billion (see CRS Report R45310, Farm Policy: USDA’s 2018 Trade Aid Package), and the 2019 trade aid
package was valued at up to $16 billion (see CRS Report R45865, Farm Policy: USDA’s 2019 Trade Aid Package).
18 T he projected $8.6 billion in 2018 Market Facilitation Program (MFP) payments include $5.1 billion in 2018 and
$3.5 billion in 2019. T he projected $14.5 billion in 2019 MFP payments were expected to occur as $10.8 billion in
2019 and $3.7 billion in 2020.
19 USDA, “ USDA Supports U.S. Seafood Industry Impacted by Retaliatory T ariffs,” press release, September 9, 2020,
at https://www.usda.gov/media/press-releases/2020/09/09/usda-supports-us-seafood-industry-impacted-retaliatory-
tariffs.
20 For details, see CRS Report R46395, USDA’s Coronavirus Food Assistance Program: Round One (CFAP-1); and
CRS Report R46645, USDA’s Coronavirus Food Assistance Program : Round Two (CFAP -2).
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Additional y, farmers are projected to receive additional income for COVID-19-related damages
from the Smal Business Administration’s (SBA’s) PPP, authorized under the CARES Act (P.L.
116-136). USDA expected that $5.9 bil ion of $7.3 bil ion of PPP loans to agriculture-related
enterprises would be forgiven and counted as farm income in 2020.21 The December 2020
COVID-19 relief package—contained as Division N within the omnibus Consolidated
Appropriations Act, 2021 (P.L. 116-260)—includes new funding for a third round of CFAP ($11.2
bil ion) and for a second round of PPP support ($284 mil ion).22
Income from Other On-Farm Activities
Income from other on-farm activities includes crop insurance indemnities, custom work, machine
hire, agritourism, and other farm sources of income (Table 3). Net farm income also includes an
imputed measure of the rental value of farm dwel ings, which is not included in net cash farm
income.
Income from other on-farm activities was forecasted to increase by $0.5 bil ion or 1% in 2020 as
compared with 2019. The bulk of the increase is due to forecast increases in the imputed rental
value of farm dwel ings, which were forecasted to increase by $1.1 bil ion. Indemnities from
federal crop insurance were forecasted to decline by $0.4 bil ion; however, the declines in
indemnities from federal crop insurance were forecasted to be more than offset by gains in
indemnities from nonfederal crop insurance policies.
Table 3. Income from Other On-Farm Activities
Change:
Farm-related Income
2017
2018
2019
2020F
2019 to 2020

——————$ Bil ion——————
$ Bil ion
%
Forest products sold
0.7
0.7
0.6
0.6
0.0
1%
Gross imputed rental value of farm dwel ings
17.9
18.7
17.9
19.0
1.1
6%
Machine hire and custom work
4.6
3.9
4.1
4.0
-0.1
-3%
Federal commodity insurance indemnities
5.2
6.2
10.2
9.8
-0.4
-4%
Non-federal commodity insurance indemnities
1.9
1.4
2.1
2.6
0.5
25%
Net cash rent received by operator landlordsa
2.3
2.1
2.3
2.3
0.0
2%
Other farm incomeb
16.4
14.8
15.4
14.7
-0.7
-4%
Total
49.1
47.8
52.6
53.1
0.5
1%
Source: CRS using data from USDA, ERS, “Farm Business Income,” as of December 2, 2020.
Notes: The total from this table equals the summation of rows #3 and #8 from Table 1 adjusted for double
counting (e.g., the imputed value of home consumption of farm products counted in cash receipts).
a. Net cash rent received by operator landlords excludes income from land rented under crop -share
agreements. Income from land rented under crop-share agreements is included in income from cash
receipts (Table 2).
b. Income from agritourism, recreational activities, and other farm sources.

21 For information on the Paycheck Protection Program (PPP) loan forgiveness, see CRS Report R46397, SBA
Paycheck Protection Program (PPP) Loan Forgiveness: In Brief.
22 John Newton, “What’s in the New COVID-19 Relief Package for Agriculture?,” Market Intel, American Farm
Bureau Federation, December 22, 2020; and Jacqui Fatka, “ PPP changes in COVID Relief Bill Offer More Aid for
Farmers,” Feedstuffs, December 31, 2020.
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Farm Sector Expenses
Overal , cash expenses for production of farm commodities were forecasted at $313 bil ion in
2020, down $4.5 bil ion or 1% from 2019 (Table 4). Expenses for livestock and poultry
purchases (-7%), interest payments (-25%), and fuel and oil (-14%) were projected to decline.
These declines were partial y offset by increases in expenses for labor (+2%), property taxes and
fees (+8%), fertilizer and lime (+5%), and net rent to landlords (+6%).
Projected reductions in expenditure for interest payments, livestock and poultry purchases, and
fuel and oil purchases partial y reflect reductions in the prices of these items from 2019 to 2020.
For example, average interest rates for interest-bearing debt held by the U.S. Treasury declined
from 2.4% in December 2019 to 1.7% in November 2020, reflecting the lower interest rate
environment general y.23 Prices for crude oil, gasoline, diesel, and heating oil declined from 2019
to 2020, reflecting the impact of COVID-19-related declines in global demand for these
commodities.24 Price declines for livestock and poultry in 2020 (Table A-2) also link to declines
in prices for breeding stock as a result of COVID-19-related disruptions in normal operations of
meatpacking and livestock processers.
Table 4. U.S. Farm Sector Cash Expenses
Change:
Expenses
2017
2018
2019
2020F
2019 to 2020F

————————- $ Bil ion————————
$ Bil ion
%
Feed purchased
54.5
53.8
59.4
59.7
0.2
0%
Labor
35.8
33.8
34.7
35.3
0.6
2%
Livestock and poultry purchases
27.4
29.2
28.7
26.7
-1.9
-7%
Fertilizer and lime
22.0
23.2
22.3
23.5
1.1
5%
Seed
22.5
21.9
21.2
21.3
0.0
0%
Net rent to landlords
19.3
16.8
18.1
19.1
1.0
6%
Pesticides
15.8
15.4
15.5
15.5
0.0
0%
Interest
17.5
19.4
19.7
14.7
-5.0
-25%
Property taxes and fees
12.7
12.7
13.3
14.3
1.0
8%
Fuel and oil
12.8
13.2
13.2
11.3
-1.9
-14%
Electricity
5.8
6.1
5.7
5.8
0.0
0%
Other expensesa
65.8
65.8
65.5
65.8
0.3
0%
Total
311.9
311.4
317.5
313.0
-4.5
-1%
Source: CRS using data from USDA, ERS, “Farm Income and Wealth Statistics: Net Cash Income,” as of
December 2, 2020.
Notes:
a. Other expenses exclude maintenance for operator dwel ings and landlord capital consumption.

23 U.S. Department of theTreasury, T reasuryDirect, “Average Interest Rates on U.S. T reasury Securities,” at
https://www.treasurydirect.gov/govt/rates/avg/avg.htm.
24 U.S. Energy Information Administration, Short Term Energy Outlook, December 8, 2020, at https://www.eia.gov/
outlooks/steo/report/prices.php.
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USDA does not forecast the extent to which these production expenses vary by farm typology,
commodity specialization, or region.25 For example, most farms benefit from lower fuel and oil
prices; however, only operations that purchase livestock and poultry benefit from declines in the
prices of these commodities.26
Similarly, many farm operations may hold farm debt and therefore benefit from lower interest
payments on that debt. The median household debt holdings for residential, intermediate, and
commercial farms in 2019 were $90,025, $84,697, and $496,275, respectively.27 If this pattern
were maintained for 2020, then commercial farms likely received the largest share of benefits
from lower interest payments on debt holdings.
Farm Finances: Assets, Debt, and Equity
Farm asset values and debt levels were projected to reach record levels in 2020—asset values at
$3.1 tril ion (+1.5% year-over-year) and farm debt at $435.2 bil ion (+4.0%)—pushing the
projected debt-to-asset ratio up to 13.9%, the highest level since 2002 (Table 5).
Table 5. Balance Sheet of the U.S. Farming Sector
2017
2018
2019
2020F
2019 to 2020F
Share
Change
Change
Category
%
—————$Billions—————
$Billions
%
Assets
100.0%
3,005.9
3,026.7
3,075.2
3,120.6
45.5
1.5%

Real estate
82.1%
2,472.8
2,510.2
2,546.0
2,569.4
23.4
0.9%
Machinery/vehicles
8.8%
272.3
271.0
279.0
287.3
8.4
3.0%
Financial assets
2.9%
81.1
72.6
87.5
108.9
21.4
24.5%
Animals and products
3.7%
107.1
97.1
99.2
92.6
-6.6
-6.6%
Crop inventory
1.9%
56.8
59.7
49.6
48.6
-1.0
-2.1%
Purchased inputs
0.6%
15.8
16.1
13.9
13.8
-0.1
-0.7%
Debt
100.0%
390.4
402.0
418.6
435.2
16.6
4.0%
Real estate
60.2%
236.2
245.7
266.8
283.0
16.2
6.1%
Non-real estate
39.8%
154.2
156.3
151.8
152.1
0.4
0.2%
Equity
100.0%
2,615.5
2,624.7
2,656.6
2,685.4
28.9
1.1%
Debt-to-asset ratio

13.0%
13.3%
13.6%
13.9%
0.3%
2.4%
Debt-to-equity ratio
14.9%
15.3%
15.8%
16.2%
0.4%
2.8%
Source: CRS using data from USDA, ERS, “Assets, Debt, and Wealth,” as of December 2, 2020.
Notes: Data for 2020 are USDA forecasts.

25 Robert A. Hoppe and James M. MacDonald, Updating the ERS Farm Typology, USDA, ERS, EIB-110, April 2013.
26 See “Farm Business Income by Location, Commodity Specialization ” for a discussion of farm businesses by
specialization.
27 See “Farm T ype Varies by Gross Sales and On-Farm Share of Income” for definitions of residential, intermediate,
and commercial farm businesses. Household debt statistics are from USDA, ERS, “Farm Household Income and
Characteristics,” Principal farm operator household finances by ERS farm typology, 2019, December 2, 2020, at
https://www.ers.usda.gov/webdocs/DataFiles/48870/table02.xlsx?v=7167.6.
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U.S. Farm Income Outlook: December 2020 Forecast

The values of financial assets (+24.5%), machinery and vehicles (+3.0%), and real estate (+0.9%)
were forecasted to increase from 2019 to 2020, while the values of animals and products (-6.6%),
crop inventories (-2.1%), and purchased inputs (-0.7%) were forecasted to decline in 2020.
Increases in values for real estate and machinery and vehicles may reflect increasing prices,
increasing inventories held, or both.28 The values of inventories of crops and livestock declined in
part because farmers were holding less inventory for a number of commodities relative to
previous years (see, for example, Figure 7 for corn, soybeans, wheat, and cotton).
Debt held by the U.S. agricultural sector also was forecasted to increase in 2020 to $435.2 bil ion
(up 4%), both for real estate (+6.2%) and non-real estate (+0.9%) loans. These increases likely
reflect the lower cost of holding debt—historical y low interest rates have reduced the cost of
holding more debt.29 Increases in farm asset values were forecasted to more than offset increases
in farm debt, leading to a year-on-year increase in farm equity of 1.1%. The debt-to-asset and
debt-to-equity ratios both were forecasted to increase in 2020 (the eighth consecutive year of
increase in both ratios); however, both ratios are stil low relative to their long-term historical
averages (Figure 4).
Figure 4. Farm Sector Debt-to-Asset and Debt-to-Equity Ratios, 1960-2020

Source: CRS using data from ERS, “2020 Farm Sector Income Forecast,” December 2, 2020. 2020 values are
forecasts.
Notes: Both the farm debt-to-asset and debt-to-equity ratios peaked in the 1980s during the farm loan crisis.

28 For example, in the Corn Belt, land prices and farm equipment holdings increased in 2020 relative to 2019. David
Oppendahl, AgLetter: Novem ber 2020, Federal Reserve Bank of Chicago, AgLetter no. 1990, November 2020, at
https://www.chicagofed.org/publications/agletter/2020-2024/november-2020.
29 For example, Corn Belt average loan rates from commercial agricultural lenders for operating loans, feeder cattle,
and real estate declined by 1.06 percentage points, 0.98 percentage points, and 0.64 percentage points for July, August,
and September 2020, respectively, as compared with the same period in 2019. Oppendahl, AgLetter: Novem ber 2020.
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Annual bankruptcy filings declined for farmers and fishermen between September 30, 2019, and
September 30, 2020; however, the rate of the decline was smal er than for al bankruptcy filings
overal (Table 6).
Loan delinquency rates at commercial banks remained below the long-run average for 2010-2020
for real-estate loans and less than 1% above the long-run average for 2010-2020 for non-real-
estate loans.30 Delinquency rates for the Farm Credit System institutions declined on a year-over-
year basis from 0.30% in September 2019 to 0.28% in September 2020.31
Although individual farms may be experiencing elevated levels of farm financial stress, the
evidence from farm bankruptcy filings and loan delinquencies suggests that the total number of
individual farms experiencing financial stress may be on par with recent historical levels.
Table 6. Bankruptcy Rates for Selected Businesses, 2019-2020
12-months ending
12-months ending
Bankruptcy Type
September 30, 2019
September 30, 2020
% Change
Al Chapters
776,674
612,561
-21.1%
Chapter 12 (for farmers and fishermen)
580
571
-1.6%
Source: CRS using data from United States Courts, “Statistics & Reports,” Table F-2 Bankruptcy Filings for
September 30, 2019, and September 30, 2020, at https://www.uscourts.gov/statistics/table/f-2/bankruptcy-filings/
2020/09/30.
Average Farm Household Income
Farm households may earn income from their farm businesses as wel as from off-farm sources—
for example, if members of the household work off-farm jobs or the farm’s asset portfolio
includes financial assets that have increased in value during the year.
 Average farm household income was forecasted at $132,558 in 2020, up 7.4%
from 2019, with increases in on-farm income (+54.0%) offsetting decreases on
off-farm income (-2.5%) (Table 7).
 About 25% ($33,460) of total farm household income in 2020 was projected to
be from farm production activities (including government payments), while the
overwhelming majority, 75% ($99,098), was earned off the farm.
Lower off-farm income for farm households in 2020 may be an indicator of lower incomes for
rural populations more general y during the COVID-19 pandemic, as farm households and other
rural households general y participate in the same labor market. However, counties where
employment is concentrated in farming may have experienced lower unemployment rates than
counties where employment is concentrated in other sectors of the economy (e.g., mining,
manufacturing, recreation).32 This suggests that the decline in off-farm income forecast for farm
households may be less than the decline in incomes for rural households in general.

30 CRS calculations using data from the Federal Reserve Bank of Kansas City, Commercial Bank Call Report Data,
December 4, 2020, at https://www.kansascityfed.org/~/media/files/publicat/research/indicatorsdata/agfinance/
call_report_data_historical_data_q3_2020.xlsx .
31 Hal Johnson, Farm Credit System Condition and Performance as of September 30, 2020 , Farm Credit
Administration, Office of Examination, at https://www.fca.gov/template-fca/about/
2020DecQuarterlyReportonFCSCondition.pdf.
32 John Cromartie et al., Rural America at a Glance: 2020 Edition, USDA ERS, EIB-221, at https://www.ers.usda.gov/
publications/pub-details/?pubid=100088.
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Table 7. Average Annual Income per U.S. Household, Farm Versus All, 2015-2020
($ per household)
Change

2015
2016
2017
2018
2019
2020
2019-2020
Average U.S. farm income by source (nominal dollars)

On-farm income
54.0%

24,740
24,731
21,842
18,425
21,730
33,460
Off-farm income
-2.5%

95,140
93,187
89,747
93,786
101,638
99,098
Total farm income
7.4%

119,880
117,918
111,589 112,210
123,368 132,558
Average U.S. farm income by source (share as a %)

On-farm income

21%
21%
20%
16%
18%
25%
54.0%
Off-farm income

79%
79%
80%
84%
82%
75%
-2.5%
Total farm income

100%
100%
100%
100%
100%
100%
7.4%
Avg. U.S. HH income

79,263
83,143
86,220
90,021
98,088
NA
NA
Farm household income as a share of U.S. average household income

Share (%)

151%
142%
129%
125%
126%
NA
NA
Source: CRS using data from ERS, “Farm Household Income and Characteristics,” Principal farm operator
household finances, data set updated as of December 2, 2020.
Notes: HH = household; NA = not available. Data for 2020 are USDA forecasts.
USDA does not forecast average annual income by farm typology.33 However, in 2019, off-farm
income accounted for more than 90% of average farm household income for residential and
intermediate farms and more than 20% of average farm household income for commercial
farms.34 If this pattern was maintained for 2020, then average farm household income more likely
increased year-over-year for the largest farm business category—commercial farms—than for
smal er residential and intermediate farms.
U.S. Total vs. Farm Household Average Income
Since the late 1990s, farm household incomes have surged ahead of average U.S. household
incomes (Figure 5). In 2019 (the last year for which comparable data were available), the average
farm household income of $123,368 was about 26% higher than the average U.S. household
income of $98,088 (Table 7).

33 See “Farm Income by Farm T ype, Specialization, Region.”
34 See “Farm T ype Varies by Gross Sales and On-Farm Share of Income” for definitions of residential, intermediate,
and commercial farm businesses. On- and off-farm income statistics are from USDA, ERS and National Agricultural
Statistics Service (NASS), Principal farm operator household finances, by farm type, 2019 , Agricultural Resource
Management Survey, data as of December 2, 2020.
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U.S. Farm Income Outlook: December 2020 Forecast

Figure 5. Average Farm Household Compared with Average U.S. Household Income

Source: ERS, “2020 Farm Sector Income Forecast,” December 2, 2020. Al values are adjusted for inflation using
the chain-type GDP deflator, 2019 = 100; BEA. Values for 2020 are forecasts.
Farm Income by Farm Type, Specialization, Region
The U.S. farm sector is vast and varied. It supplies a wide array of markets for food, animal feed,
fuel, fibers, and forestry products in the United States and abroad. It encompasses production
activities relating to traditional field crops (such as corn, soybeans, wheat, and cotton) and
livestock and poultry products (including meat, dairy, and eggs), as wel as fruits, tree nuts, and
vegetables. In addition, U.S. agricultural output includes greenhouse and nursery products, forest
products, custom work,35 and other farm-related activities. The intensity and economic
importance of each of these activities, as wel as their underlying market structure and production
processes, vary regional y based on the agroclimatic setting, market conditions, and other factors.
As a result, farm income and rural economic conditions may vary substantial y across the United
States.
As seen in the previous section, measures of farm household income, which include income
earned on and off of the farm, provide a view into the welfare of farm households and the rural
economy. In contrast, measures of farm business income provide a view into the profitability of
crop and livestock production.36 Both types of metrics may be useful to policymakers in
understanding the extent of COVID-19-related impacts on the farm sector and on the aggregate
supply of food, feed, fuel, fibers, and forestry products for U.S. and international markets.

35 Custom work involves performing machine operations for another landowner in exchange for a set fee or rate.
36 ERS forecasts farm business income and farm household income.
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Farm Type Varies by Gross Sales and On-Farm Share of Income
Net farm income and net cash farm income are measures of profitability of the sec tor overal .
However, the profitability of any individual farm can depend on the type of farm business and
scale of production of the operation. Additional y, some farms may derive limited income from
their farm operations because their operators work primarily in off-farm activities.
USDA reports average net cash farm income (NCFI) for al U.S. farms as wel as for specific
categories of farms based on farm ownership, gross value of sales, and farm typology (Table 8).
 Farm Ownership. USDA distinguishes between family farms—operations
where the majority of the business is owned by an operator and individuals
related to the operator—and nonfamily farms where an operator and persons
related to the operator do not own a majority of the business. Family farms
account for more than 97% of al U.S. farms.
 Gross Value of Sales. USDA classifies farm operations into five categories based
on gross sales value. The largest category consists of the more than 80% of U.S.
farms earning less than $100,000 in gross sales.
 Farm Typology. USDA classifies farms into three types based on the farm
operator’s primary occupation and the farm’s gross cash income—residence
farms, intermediate farm businesses, and commercial farm businesses.
o Residence farms—farms operated by those whose primary occupation is
something other than farming and where the operation reports gross cash
farm income of under $350,000.
o Intermediate farm businesses—farming is the operator’s primary
occupation; the operation reports gross cash farm income of under $350,000.
o Commercial farm businesses—the farming operation reports gross cash
farm income of over $350,000.
USDA’s Agricultural Resource Management Survey (ARMS) data for 2019 indicate that
approximately 10% of U.S. farms are commercial farm businesses, 38% are intermediate farm
businesses, and the remaining 52% are residence farms (Table 8).37 According to ERS, farm
businesses account for fewer than half of U.S. farms but contribute more than 90% of the farm
sector’s value of production and hold most of its assets and debt.38

37 For more information on the Agricultural Resource Management Survey (ARMS) survey, see USDA, NASS,
“ARMS,” at https://www.nass.usda.gov/Surveys/Guide_to_NASS_ Surveys/Ag_Reso urce_Management/.
38 USDA, ERS, “Farm Sector Income and Finances: Farm Business Income,” as of December 2, 2020, at
https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/farm-business-income/.
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Table 8. Average Net Cash Farm Income for All Farms by Sales Class and Typology

All Farmsa
2017
2018
2019
2020F
2019 to 2020F
Farm
Change
Change
Characteristics
Share %
—————$1,000 per farm—————
$1,000
%
All farms
100.0%
39.0
35.5
38.0
51.8
13.8
36.3%
Family farms
97.6%
35.2
31.9
32.6
45.2
12.6
38.7%
Farms by gross sales value

$1,000,000 or more
3.9%
657.7
624.2
677.5
858.4
180.9
26.7%
$500,000 - 999,999
3.5%
183.1
196.9
174.5
239.7
65.2
37.4%
$250,000 - 499,999
4.4%
92.6
94.3
98.5
132.8
34.3
34.8%
$100,000 - 249,999
6.5%
47.3
35.9
40.4
58.5
18.1
44.8%
Less than $100,000
81.8%
-0.3
-2.4
-1.5
0.8
2.3
153.3%
Farm typology

Farm businessesb
47.9%
81.6
76.8
78.8
104.5
25.7
32.6%
Commercial farmsc
10.4%
333.5
325.9
336.9
435.8
98.9
29.4%
Intermediate farmsd
37.6%
9.8
6.9
7.5
13.0
5.5
73.3%
Residence farmse
52.1%
0.3
-1.2
0.5
3.4
2.9
580.0%
Source: USDA, ERS, “Farm Business Income,” as of December 2, 2020.
Notes: F = forecast. Net cash farm income does not include off-farm income. The category “Al farms”
encompasses family farms (97.6% of total farms) and nonfamily farms (2.4% of total farms, not displayed on the
table). The total shares of al farms by gross sales value sum to 100%. The category “Farm Typology” encompasses
farm businesses (47.9% of total farms) and resident farms (52.1% of total farms). Farm businesses can be subdivided
into commercial farms (10.4% of al farms) and intermediate farms (37.6% of al farms). The average net cash
income for al farms wil be approximately equal to the weighted sum of average net cash income for farm
businesses and residence farms, with differences possible due to rounding errors.
a. USDA estimated 2,015,068 farms in the United States in 2019, including 1,967,617 (97.6%) family farms.
b. Farm businesses are farms that have annual gross cash farm income of at least $350,000 or smal er
operations in terms of gross sales but where farming is reported as the operator’s primary occupation.
c. Commercial farm business operations are farms with gross cash farm income of over $350,000.
d. Intermediate farm business operations are farms with gross cash farm income < $350,000 but where
farming is reported as the operator’s primary occupation.
e. Residence farms are smal farms (with annual gross cash farm income less than $350,000) operated by those
whose primary occupation is something other than farming.
For U.S. farms overal , average NCFI was forecasted to increase 36.3% in 2020 to $51,800 per
farm from $38,000 in 2019. Average NCFI was also forecasted to increase for every category of
farm (i.e., gross sales value and typology), with the largest increase in dollar terms reported for
the largest-scale operations.
 Average NCFI for farms with gross sales value of $1,000,000 or more was
forecasted to increase by $180,900 from 2019 to 2020 (in nominal dollars), or an
increase of 26.7%, while farms with smal er gross sales were forecasted to have
smal er year-over-year increases in average nominal NCFI but with larger
percentage changes.
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 Similarly, commercial farm business were forecasted to have greater absolute
increases in average NCFI from 2019 to 2020 than either intermediate farm
businesses or residence farms.
 Although the largest operations (commercial farms) were forecasted to have the
largest year-over-year increase in average NCFI in nominal dollars (+$98,900),
smal er farm operations (intermediate and residence farms) were forecasted to
have larger increases in percentage terms.
USDA analyses of farms in 2016 and 2017 indicated that beginning farmers, limited resource
farm households, and social y disadvantaged farmers tended to operate smal er farms and, as a
result, earned less income from on-farm activities compared with farms that were not operated by
beginning, limited resource, or social y disadvantaged farmers.39 If this pattern was maintained in
2020, it suggests that farms operated by beginning, limited resource, or social y disadvantaged
farmers likely received a smal er year-over-year increase in farm income compared with farms
whose operators did not fal into any of those categories.
Farm Business Income by Location, Commodity Specialization
In addition to forecasting average NFCI for farms based on gross farm sales, USDA forecasts
average NFCI for farm businesses by region and by commodity specialization. USDA’s regions
divide the continental United States into areas that contain similar types of farms and similar
physiographic, soil, and climate traits (Figure 6).40 USDA determines commodity specialization
for farm businesses where at least 50% of the value of production derives from a particular
commodity. However, farm businesses often produce multiple commodities, so average NFCI
statistics should not be interpreted as resulting solely from the production and sale of the
commodity highlighted as the commodity specialization.
USDA forecasted average NFCI to increase for farm businesses in al regions of the United States
in 2020 (Table 9 and Figure 6). The three regions forecasted to gain the most from 2019 to 2020
in dollar terms were the Fruitful Rim, Northern Great Plains, and Mississippi Portal, which also
were forecasted to be the regions with the highest average NFCI for farm businesses. The three
regions forecasted to gain the most from 2019 to 2020 in percentage terms were the Mississippi
Portal (+42.8%), the Northern Great Plains (+41.7%), and the Basin and Range (+40.9%).
USDA forecasted average NFCI to increase from 2019 to 2020 for farm businesses that specialize
in wheat, corn, soybeans, cotton, specialty crops, and certain other commodity crops (Table 9).
The three commodity specializations with the largest increases in dollar terms were cotton,
specialty crops, and wheat. The three commodity specializations with the largest increases in
percent terms were wheat, cotton, and soybeans. USDA also forecasted average NFCI to increase
from 2019 to 2020 for farm business that specialize in most types of livestock production—
poultry being the exception (Table 9). The livestock specializations with the largest increases in

39 According to USDA ERS, beginning farmers are defined as farmers who have materially and substantially
participated in the operation of any farm or ranch for 10 years or less. Lim ited-resource farm households are defined as
households with low farm sales and low household incomes for two years. Socially disadvantaged farm ers are defined
as operators who belong to a group whose members have been subject to racial, ethnic, or gender prejudice because of
their identity as members of the group without regard to their individual qualities. See USDA, ERS, “ Beginning,
Limited Resource, Socially Disadvantaged, and Female Farmers,” at https://www.ers.usda.gov/topics/farm-economy/
beginning-limited-resource-socially-disadvantaged-and-female-farmers/.
40 For a description of the ERS resource regions, see ERS, Farm Resource Regions, Agricultural Information Bulletin
no. 760, September 2000.
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dollar terms were dairy and hogs, and the largest increases in percentage terms were other
livestock and cattle and calves.
Table 9. Average Net Cash Income for Farm Businesses by Region and Commodity

All Farms
2017
2018
2019
2020F
2019 to 2020F
Farm
Change
Change
Characteristics
Share %
—————$1,000 per farm—————
$1,000
%
Farm Businesses
47.9%
81.6
76.8
78.8
104.5
25.7
32.6%

Resource regiona

Heartland
10.8%
109.8
110.8
102.5
130.5
28.0
27.3%
Northern Crescent
6.8%
66.3
62.4
59.2
79.0
19.8
33.4%
Northern Great Plains
2.5%
109.5
101.0
113.4
160.7
47.3
41.7%
Prairie Gateway
6.6%
68.9
63.7
76.7
101.9
25.2
32.9%
Eastern Uplands
5.9%
13.6
13.8
32.6
39.5
6.9
21.2%
Southern Seaboard
5.5%
47.9
30.5
36.3
49.0
12.7
35.0%
Fruitful Rim
5.4%
165.0
149.9
149.9
202.5
52.6
35.1%
Basin and Range
2.8%
52.2
71.8
39.6
55.8
16.2
40.9%
Mississippi Portal
1.6%
97.3
88.1
103.4
147.7
44.3
42.8%
Commodity Specialization: Crops

Wheat
0.5%
82.3
102.3
107.3
160.5
53.2
49.6%
Corn
5.1%
139.1
171.8
143.3
190.9
47.6
33.2%
Soybeans
2.1%
98.8
76.4
77.6
110.5
32.9
42.4%
Cotton
0.3%
259.4
190.2
252.3
366.8
114.5
45.2%
Specialty cropsb
4.3%
222.6
189.1
196.4
262.2
65.8
33.5%
Other cropsc
11.4%
67.1
65.2
56.8
80.4
23.6
41.5%
Commodity Specialization: Livestock

Cattle and calves
16.3%
23.1
23.0
19.6
27.9
8.3
42.3%
Hogs
0.5%
288.6
249.0
341.6
386.7
45.1
13.2%
Poultry
1.8%
96.2
105.5
141.6
139.1
-2.5
-1.8%
Dairy
1.8%
269.3
215.8
260.6
333.3
72.7
27.9%
Other livestockd
3.9%
12.8
5.7
12.2
17.8
5.6
45.9%
Source: CRS using data from USDA, ERS, “Farm Business Income,” as of December 2, 2020.
Notes: F = forecast. Commodity specialization is determined by a farm business having at least 50% of the value
of production from a particular commodity. Farm businesses often produce multiple commodities, so average
net cash farm income statistics should not be interpreted as resulting solely from the production and sale of the
commodity highlighted as the commodity specialization.
a. For a description of the ERS resource regions, see Figure 6 and accompanying notes.
b. Specialty crops include fruits and tree nuts, vegetables, and nursery and greenhouse products.
c. Al remaining crops not listed, including feed grains (sorghum, barley, and oats), peanuts, sunflower, minor
oilseeds, rice, pulse crops, tobacco, sugar, and other miscel aneous crops.
d. Al other livestock not listed, including eggs, aquaculture, sheep and lambs, honey, mohair, wool pelts, and
other miscel aneous animal products.
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U.S. Farm Income Outlook: December 2020 Forecast

Figure 6. Farm Business Average Net Cash Farm Income by Resource Region
2020F compared with 2019

Source: CRS using data from USDA, ERS, “Farm Business Income,” as of December 2, 2020.
Notes: F = forecast. For a description of the ERS resource regions, see USDA ERS, Farm Resource Regions,
Agriculture Information Bul etin no. 760, September 2000.
Sources of Revenue for Commercial and Residential Farms
Individual farms vary widely in the share of revenue they derive from each of the three potential
sources—cash receipts, government payments, and other farm income sources. USDA does not
forecast the extent to which these sources vary by farm typology, commodity specialization, or
region.
Because farm programs provide benefits for specific commodities and producers, the importance
of government payments as a percentage of net farm income varies by crop and livestock sector
specialization and by region. For example, the USDA direct payment programs CFAP1 and
CFAP2 were forecasted to make a large contribution to government payments in 2020.41 As of
December 27, 2020, the largest shares of CFAP1 and CFAP2 payments had been paid to
producers of cattle and corn; thus, it is likely that farms that specialize in corn and/or cattle
benefited more from increases in government payments in 2020 than farms that specialize in
other types of commodities.42

41 See “Government Payments” section.
42 See CRS Report R46395, USDA’s Coronavirus Food Assistance Program: Round One (CFAP-1); and CRS Report
R46645, USDA’s Coronavirus Food Assistance Program : Round Two (CFAP-2).
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Summary of 2020 Farm Income Forecast
The global COVID-19 pandemic disrupted normal operations of markets for a number of
agricultural products in the United States and abroad and continues to disrupt operations for
markets for some commodities in 2021. Despite these disruptions, production of most agricultural
commodities and total farm sector income increased in 2020 on a year-over-year basis. In
addition, USDA’s farm income forecasts improved with each successive forecast throughout the
year (Table A-1).
Three key reasons for why farm sector income may have increased in 2020 include the following:
1. Government payments increased. Government payments increased by over
100% from 2019 to 2020, constituting the highest levels of government payments
on record, the largest share of total farm sector income in more than 30 years, and
exceeding the amount of revenue lost from reductions in the value of agricultural
output in 2020.
2. Reductions in income from farm cash receipts were smaller than initially
expected. Although prices for many agricultural commodities declined by more
than 5% during the first two quarters of the year, some of these commodities saw
full price recoveries by the end of 2020. Because some farmers were able to
delay sales of certain commodities by holding crops in storage until later in 2020,
the overal impact of early price declines on farm income was less than would
have occurred if the price declines had persisted through the end of the year.
3. Reductions in farm production expenses in 2020 partially offset the decline
in output values. COVID-19-related disruptions to global markets for fuel and
credit al owed farmers to benefit from lower prices for fuel and oil to run their
farm operations and from lower interest payments on debt.
World trade also impacted farm income in 2020. China’s purchases of agricultural commodities,
although less than the levels specified under the U.S.-China Phase One trade agreement,
contributed to the price recovery of some commodities in late 2020. Farmers also received the
final tranche of MFP payments in 2020, along with CFAP payments, which contributed to the
total amount of income attributable to government payments. The United States-Mexico-Canada
Agreement (USMCA) was signed in 2020; however, its effects on farm income are expected to be
modest and to accrue mostly to dairy and poultry.43
Even though national farm income increased in 2020, the impact of COVID-19 varied at the
individual farm level and was severe for some farms and commodity sectors. USDA’s national
forecasts do not reflect changes to the range of incomes that individual farms received in 2020.
2020 Year in Review for Farm Sector
Several major economic and policy events have occurred since 2018 that helped to shape the U.S.
farm income outlook for 2020. These include the U.S.-China trade dispute and subsequent Phase
One trade agreement between the two countries, as wel as the COVID-19 pandemic and several
federal direct payment programs targeting affected producers in response to these events. In
addition, the year 2020 saw three major weather events that impacted the U.S. agricultural sector:
wet spring conditions in the upper Midwest that resulted in a second year of large prevent-plant
acres; an unprecedented derecho wind storm through the heart of the Corn Belt that damaged

43 CRS Report R45661, Agricultural Provisions of the U.S.-Mexico-Canada Agreement.
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several mil ion acres of prime cropland; and a late-season drought across the western Corn Belt.
Final y, China began making large-scale purchases of U.S. corn and soybeans in the third and
fourth quarter of the year. These and other important events of 2020 are briefly reviewed here.
State of the U.S. Agricultural Sector Heading into 2020
Corn, soybeans, wheat, and cotton are the four largest commercial crops produced annual y in the
United States in terms of area harvested, volume of output, and value (Table 2).44 Since 2015,
these four commodities have experienced relatively strong growth in output, helping to build
stockpiles through the 2018 season, while upland cotton saw its end-of-year stocks surge in 2019
(Figure 7). The outlook for abundant supplies relative to demand for these four major
commodities contributed to weak commodity price outlook heading into 2020.
In 2018, the U.S.-China trade dispute emerged as an impediment to trade and contributed to lower
soybean prices.45 The U.S.-China trade dispute led to declines in U.S. farm exports to China—a
major market for U.S. agricultural products—in 2018 and 2019 and added to market uncertainty
in 2020. The difficulties associated with the trade dispute were exacerbated in 2018 when U.S.
farmers produced a record soybean harvest of 4.4 bil ion bushels, which resulted in both record
end-of-year stocks and a record stocks-to-use ratio (22.9%). The record soybean harvest
combined with the sudden loss of the Chinese soybean market kept downward pressure on U.S.
soybean prices through 2019 and into early 2020.
In 2019, U.S. producers encountered extremely wet conditions in the spring that delayed planting
of major row crops in many regions of the country and resulted in a record 19.6 mil ion acres
prevented from being planted.46 The reduction in planted acres, primarily for corn and soybeans,
coupled with unfavorable weather during the fal harvests, resulted in below-average yields and
an unexpectedly smal er crop in 2019.47 Despite a smal er crop and lower stocks in 2019, the
reduction in U.S. soybean exports to China prevented a price recovery that year.
In response to the U.S.-China trade dispute, USDA used its authority under the Commodity
Credit Corporation (CCC) Charter Act48 to initiate successive direct payment programs in 2018
and 2019—referred to as Market Facilitation Programs (MFPs)—to partial y offset the
commodity price effects of the trade dispute on U.S. producers.49 As of November 23, 2020,
USDA had paid out a combined $23.1 bil ion under the two MFP programs.50

44 T he U.S. hay crop exceeds the U.S. cotton crop in area, volume, and value but is less commercially traded a nd is
used primarily by the livestock sector. In recent years, two specialty crops—grapes and almonds—have rivaled cotton
for fourth place in terms of the value of production, depending on market prices and production.
45 CRS Report R45929, China’s Retaliatory Tariffs on U.S. Agriculture: In Brief.
46 CRS Report R46180, Federal Crop Insurance: Record Prevent Plant (PPL) Acres and Payments in 201 9.
47 CRS Report R46132, U.S. Farm Income Outlook: November 2019 Forecast.
48 CRS Report R44606, The Commodity Credit Corporation (CCC).
49 T he 2018, MFP was authorized by Agriculture Secretary Sonny Perdue at up to $12 billion in financial assistance,
including up to $10 billion in direct payments (see CRS Report R45310, Farm Policy: USDA’s 2018 Trade Aid
Package). T he 2019, MFP was authorized by Secretary Perdue at up to $16 billion in financial assistance, including up
to $14.5 billion in direct payments (see CRS Report R45865, Farm Policy: USDA’s 2019 Trade Aid Package).
50 Data include $8.6 billion under the 2018 MFP and $14.5 billion under the 2019 MFP . See USDA, Farm Service
Agency (FSA), “ MFP,” at https://www.farmers.gov/manage/mfp.
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Figure 7. Stocks-to-Use Ratios and Farm Prices: Corn, Soybeans, Wheat, and Cotton

Source: CRS using data from USDA, World Agricultural Outlook Board, World Agricultural Supply and Demand
Estimates, January 12, 2021. Al values are nominal. Values for 2020 are forecasts, are in dark blue, and are separated
from historical data.
Notes: Stocks-to-use equals the ratio of season-ending stocks relative to the season’s total usage. Data are
reported on a market-year basis—the market year is the 12-month period that begins at harvest time, during which
the harvested crop is either stored or used on farm or sold in the marketplace. For example, for corn and soybeans,
the 2020 market year started on September 1, 2020, and runs through August 31, 2021. Wheat data are on a June-
May market year basis, and upland cotton data are on an August-July market year.
U.S.-China Agree on Phase One Trade Deal in Early 2020
On January 15, 2020, President Trump signed a “Phase One” executive agreement with the
Chinese government on trade and investment issues, including agriculture.51 The agreement was
expected to improve market access for U.S. products into China, including a commitment by
China to import $32 bil ion worth of additional U.S. agricultural products (relative to a 2017 base
of $24 bil ion) over a two-year period. Most observers expected the Phase One agreement to
provide improved opportunity for certain U.S. exporters; however, there is uncertainty over
whether the agreement may lead to a rearrangement of global trading patterns or create new
market demand.

51 CRS In Focus IF11412, U.S.-China Phase I Deal: Agriculture.
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Farmer optimism from the U.S.-China Phase One trade agreement contributed to expectations for
large planted acres in March 2020 (discussed below in “Weather Factors Influence Crop
Outcomes in 2020”).52 The large acreage projections, plus the uncertainty over how quickly
China might restart large-scale imports of U.S. farm products, hindered market price recovery
during the first quarter of 2020. This recovery was also stymied by the emergence of COVID-19
in mid-January 2020.
COVID-19 Pandemic Impacts Food Supply Chain
In mid-January 2020, COVID-19 first appeared in the United States and spread rapidly through
the country. The COVID-19 pandemic produced an aggregate demand shock across the U.S.
economy, including the agricultural sector.53 In particular, the COVID-19 pandemic induced
widespread business closures, massive lay-offs, and 2020 GDP declines (annualized basis)
of -4.8% for the first quarter and -31.7% for the second quarter.54 In August 2020, 24.2 mil ion
persons were unable to work because their employer closed or lost business due to the pandemic,
and the overal U.S. unemployment rate reached 8.4%—up sharply from a seasonal y adjusted
rate of 3.5% in February.55
COVID-19-related lockdowns caused widespread supply chain disruptions that shifted, and in
some cases stopped, the flow of agricultural commodities through the various supply chains and
led to sharp declines in farm prices and considerable market uncertainty. The principal impact on
the U.S. agricultural sector was primarily the result of the COVID-19-related demand shock on
food demand, including institutional, hospitality, and retail (i.e., dine-in restaurant) purchasing.56
The short-run impact was lower farm prices, stock building of grains and oilseeds, and a
temporary backup of unmarketable surpluses of market-ready livestock, poultry, and dairy
products, as wel as perishable fruits and vegetables. Similarly, people canceled travel plans and
many businesses and schools shifted to full-time telework, thus dramatical y reducing
transportation fuel consumption, including of corn-based ethanol (which comprises roughly 10%
of al fuel consumption for cars and light trucks and accounts for roughly 30% of U.S. corn
usage).
Congress and USDA Respond to COVID-19 Pandemic with Large-Scale
Programs
In response to the COVID-19 pandemic, on April 17, 2020, USDA initiated the Coronavirus Food
Assistance Program (CFAP1) valued at $19 bil ion, including $16 bil ion in direct payments to
affected agricultural producers and $3 bil ion for food purchases and distribution.57 As of January
10, 2021, USDA had made $10.6 bil ion in direct payments under CFAP1.58

52 USDA, NASS, Prospective Planting, March 31, 2020.
53 CRS Report R46347, COVID-19, U.S. Agriculture, and USDA’s Coronavirus Food Assistance Program (CFAP).
54 GDP growth estimates are on an annualized basis, from U.S. Bureau of Economic Analysis, “Gross Domestic
Product, 2nd Quarter 2020 (Second Estimate); Corporate Profits, 2 nd Quarter 2020 (Preliminary Est imate),” news
release no. BEA 20-41, August 27, 2020.
55 U.S. Bureau of Labor Statistics, “ T he Employment Situation—August 2020,” USDL-20-1650, September 4, 2020.
56 T odd Hubbs and Scott Irwin, “Crop Markets Suffer Massive Demand Shock from COVID-19,” Economic Impact of
COVID-19 on Food and Agricultural Markets, CAST Commentary, June 2020.
57 For information, see CRS Report R46395, USDA’s Coronavirus Food Assistance Program: Round One (CFAP-1).
58 USDA, Coronavirus Food Assistance Program Data, “CFAP 1.0 Dashboard,” January 10, 2021, at
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On September 18, 2020, USDA announced a second CFAP payment program (CFAP2) with
funding of up to an additional $14 bil ion.59 Signup for CFAP2 began on September 21 and ran
through December 11, 2020.60 As of January 10, 2021, USDA had made $13.1 bil ion in direct
payments under CFAP2.61
The Trump Administration announced several other new programs in response to the COVID-19
pandemic, including $349 bil ion in funding to support the SBA’s lending programs and the new
PPP.62 The PPP provides short-term, low-interest loans that could be forgiven under specified
circumstances to qualifying smal business (including agricultural firms) and nonprofits. As of
August 8, 2020, the PPP had made $7.3 bil ion in potential y forgivable loans to agriculture-
related enterprises.63
The long-run impact of the COVID-19 pandemic wil depend on how quickly the economy
recovers from Depression-level high unemployment and widespread restaurant and retail business
shutdowns. The speed of the vaccination roll out for the COVID-19 pandemic coupled with the
speed of the subsequent business reopening is expected to influence the recovery prospects for
both the U.S. economy and the U.S. agricultural sector.
Weather Factors Influence Crop Outcomes in 2020
The early spring outlook for large crop plantings coupled with the demand-depressing impact of
the COVID-19 pandemic contributed to plunging commodity prices from January 2020 into July.
But, three major weather events—wet spring conditions in the upper Midwest that resulted in a
second year of large prevent-plant acres, an unprecedented derecho wind storm through the heart
of the Corn Belt that damaged several mil ion acres of prime cropland, and a late-season drought
across the western Corn Belt and Plains states—reversed the price decline and contributed to late-
year price increases for several major crops, including corn and soybeans. USDA was slow to
capture the weather-related supply effects in its monthly crop reports, and this resulted in USDA
having to reverse its preliminary optimistic crop outlook. This reversal helped to trigger a strong
upward movement in farm prices starting in mid-August.
The early year market optimism—based on the Administration’s U.S.-China Phase One trade
agreement—contributed to projections in March for large planted acres in 2020, including 97.0
mil ion acres for corn (up 8.1% from 2019), 83.5 mil ion for soybeans (+9.7%), 44.7 mil ion for
wheat (-1.1%), 13.7 mil ion for cotton (unchanged), and 319.1 mil ion total acres planted to
principal crops (+5.4%).64 However, eventual planted acres for major field crops in 2020 were

https://www.farmers.gov/cfap1/data.
59 See CRS Report R46645, USDA’s Coronavirus Food Assistance Program: Round Two (CFAP-2).
60 For more information, see USDA, “ USDA to Provide Additional Direct Assistance to Farmers and Ranchers
Impacted by the Coronavirus,” press release no. 0378.20, September 18, 2020.
61 USDA, Coronavirus Food Assistance Program Data, “CFAP 2.0 Dashboard,” January 10, 2021, at
https://www.farmers.gov/cfap/data.
62 For information on the federal response to the COVID-19 pandemic for different sectors of the U.S. economy, visit
the CRS COVID-19 Resources page at https://www.crs.gov/Resources/coronavirus-disease-2019.
63 T he Small Business Administration (SBA) stopped taking PPP applications on August 8, 2020. Final loan data for
PPP reported here were obtained via a Freedom of Information Act request by an anonymous nongovernmental
organization and shared with CRS.
64 USDA, NASS, Prospective Plantings, March 31, 2020. Principal crops include corn, sorghum, oats, barley, rye,
winter wheat, Durum wheat, other spring wheat, rice, soybeans, peanuts, sunflower, cotton, dry edible beans,
chickpeas, potatoes, sugarbeets, canola, proso millet, all hay, tobacco, and sugarcane but also include double cropped
acres and unharvested small grains planted as cover crops.
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limited by a second year of above-normal prevented planting, estimated at over 10 mil ion acres,
compared with a record 19 mil ion acres of prevented planting acres in 2019.65 By comparison,
from 2000 to 2018, prevented planting averaged 4.1 mil ion acres annual y. In June, when USDA
surveyed farmers for their actual plantings, farmers reported that they had planted 311.9 mil ion
acres to principal crops (up 3.1% from 2019 but down over 7 mil ion acres from the March
survey of intentions). This total included 92.0 mil ion of corn (+2.6%), 83.8 mil ion of soybeans
(+9.7%), 44.3 mil ion of wheat (-2.0%), and 12.2 mil ion of cotton (-11.3%).66
Except for the prevent-planting acreage, most principal crops were planted on time and under
good soil moisture conditions. However, in mid-July, widespread hot, dry conditions set in over
much of the western United States, including portions of the Corn Belt—that is, the Dakotas,
Nebraska, Iowa, and northern Illinois (Figure 4). The poor growing conditions began to
negatively impact yields for corn and soybeans but were slow to impact USDA crop forecasts.
For example, in August, USDA’s initial outlook for 2020 crop production projected a record corn
crop of 15.3 billion bushels and a near-record large soybean crop of 4.4 billion bushels.67
Forecasts for both crops included record yields of 181.8 and 53.3 bushels per acre, respectively,
for corn and soybeans. This initial forecast included declines in market-year average farm prices
(MYAPs) for corn to $3.10 per bushel (-13.9% from 2019) and for soybeans to $8.35 per bushel
(-2.3%) for 2020.
On August 10, 2020, a large derecho storm system plowed through the Midwest.68 Early news
reports suggested substantial damage, including approximately 10 mil ion acres of corn and
soybeans, roughly a third of Iowa’s total cropland, damaged by rain, hail, and wind. Also, starting
in mid-August, China began to make large purchases of U.S. corn and soybeans.69 While much
uncertainty remains about the eventual size of Chinese grain and oilseed imports, market
optimism about Chinese purchases and concerns about weather-related production losses fueled a
rise in commodity prices in the U.S. futures market. The price ral y that began on August 12
pushed soybean prices for the nearby futures contract above $10 per bushel on September 14,
2020, and above $14 per bushel on January 12, 2021.70
Similarly, USDA began to gradual y lower its yield and harvested area projections and to raise its
price projections in successive monthly crop outlook reports starting in September. For example,
in USDA’s September crop report, national corn and soybean yield estimates were reduced to
178.5 and 51.9 bushels per acre, respectively.71 The harvested-corn acreage estimate was lowered
to 83.473 mil ion acres, a reduction of 550,000 acres—al from Iowa. Soybean acres were left
unchanged. MYAPs were revised substantial y upward to $3.50 per bushel for corn and $9.25 per
bushel for soybeans. In November, USDA raised the 2020 corn price forecast to $4.00 per bushel.

65 USDA, FSA, “FSA Crop Acreage Data Reported to FSA, 2020 Crop Year,” September 1, 2020. See a lso CRS
Report R46180, Federal Crop Insurance: Record Prevent Plant (PPL) Acres and Paym ents in 2019 .
66 USDA, NASS, “Acreage,” June 30, 2020.
67 USDA, World Agricultural Outlook Board (WAOB), World Agricultural Supply and Demand Estimates (WASDE),
released August 12, 2020.
68 A derecho is a weather event caused by severe thunderstorms and often characterized by 70 -100 mph straight-line
winds. Krissa Welshans, “Derecho storm causes widespread, significant damage,” Feedstuffs, August 11, 2020.
69 Keith Good, “China Could Become Largest Corn Importer, While Soybean Variables Come Into Focus,” Farm
Policy News, September 10, 2020.
70 Chicago Mercantile Exchange (CME), Soybean Futures Quotes for nearby contracts: t he September 14, 2020, price
is for the November 2020 contract (accessed on September 15, 2020); and the January 12, 2021, price is for the January
2021 contract (accessed on January 14, 2021).
71 USDA, WAOB, WASDE, released September 11, 2020.
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In December, USDA raised the soybean farm price to $10.55 per bushel. In January 2021, USDA
raised both corn and soybean prices to $4.20 per bushel and $11.15 per bushel (up from the
August forecasts of $3.10 and $8.35, respectively).72
Commodity Production and Usage in 2020
New Production of Principal Crops and Livestock
USDA forecasted that production of corn, oats, rice, sorghum, and soybeans would increase in
2020 and that production of barley, cotton, and wheat would decline. Increases in corn, oats, rice,
sorghum, and soybean production are driven by year-over-over increases in acreage planted and
harvested, and higher yields per acre. Declines in wheat and barley production are driven by year-
over-year declines in acreage planted and harvested, and lower yields per acre. Declines in cotton
production are driven by declines in acreage planted and harvested.
Despite short-term COVID-19-related shutdowns to slaughterhouses and meatpacking facilities in
2020, total production of beef, broiler chickens, milk, and pork was forecasted to increase on a
year-over-year basis. However, production of eggs was forecasted to decline on a year-over-year
basis.
Table 10. U.S. Domestic Production of Key Agricultural Commodities
2019 and 2020 crop years
2019
2020F
Change
Commodity
Units
Production
Production
Quantity
Change %
Row Crops

Corn
Mil. Bushels
13,620
14,182
562
4%
Soybeans
Mil. Bushels
3,552
4,135
618
16%
Wheat
Mil. Bushels
1,932
1,826
-106
-5%
Sorghum
Mil. Bushels
341
373
32
9%
Rice
Mil. Hundredweight
185
228
43
23%
Barley
Mil. Bushels
172
165
-7
-4%
Oats
Mil. Bushels
53
65
12
23%
Cotton
Mil. 480 lb Bales
19.9
15.0
-4.9
-25%
Livestock, Dairy, Poultry, and Eggs

Broilers
Mil. Pounds
43,905
44,550
645
1%
Pork
Mil. Pounds
27,638
28,296
658
2%
Beef
Mil. Pounds
27,155
27,158
3
0%
Eggs
Mil. Dozens
9,447
9,258
-189
-2%
Milk
Bil. Pounds
218.4
222.9
4.5
2%
Source: CRS using data from USDA, World Agricultural Supply and Demand Estimates, released January 12, 2021.
Notes: F = forecast values for 2020 production.

72 USDA, WAOB, WASDE, report releases for November 10, 2020, December 10, 2020, and January 12, 2021.
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End-of-Year Crop Inventories for 2020
By December 2020—after taking into account the downward revisions to acres, yields, and
usage—stocks-to-use ratios for corn, soybeans, wheat, and cotton were forecasted to decline in
2020 from 2019 (Figure 7). Declining stocks-to-use ratios for corn and soybeans primarily reflect
increasing sales to China from both inventories carried over from prior year harvests, as wel as
from new crop production. Increases in corn sales to China helped to offset lost demand for corn
for ethanol production, which paral eled the short-term declines in U.S. gasoline sales related to
the COVID-19 pandemic. Declining stocks-to-use for wheat primarily reflects increasing
domestic demand for wheat. Declining stocks-to-use for cotton primarily reflects decreasing year-
over-year production and COVID-19-related declines in global demand.
Early 2021 Developments
Two recent developments—U.S. corn and soybean farm prices projected at the highest levels in
six years (Figure 7) and China’s resurgent interest in buying U.S. corn and soybeans—generated
substantial optimism in the U.S. farm sector heading in 2021.73 Furthermore, if dry weather
patterns persist in key South American corn and soybean production zones, they could further
tighten global supplies and support U.S. farm prices.
USDA’s first projection of U.S. farm income for 2021 was released on February 5, 2021.74 Early
farm income estimates rely primarily on trends for crop yields and commodity demand from both
domestic and international markets. Despite the initial optimism, the U.S. agricultural picture for
2021 is clouded by several major uncertainties related to potential weather and trade
developments.
 First, as of early 2021, much of the western United States, including much of the
western Corn Belt, remains mired in a prolonged drought that developed in late
summer of 2020 (Figure 8).
On the positive side, dry conditions al ow for early field work activity in the
spring and often contribute to greater-than-expected plantings; however, they also
signal potential yield loss and above-normal acreage abandonment if
precipitation patterns do not return to normal during the crop growing season.
The potential extent of weather-related effects on planted acres in 2021 wil not
be known until spring planting is completed—most likely not before June 2021,
while the effect on yields and early crop development is often not known with
certainty until harvest.
 A second uncertainty is the extent to which the COVID-19 pandemic may persist
in 2021 and how quickly a successful vaccination campaign can be achieved.
 Third, also related to the COVID-19 pandemic, is when and how the general
economy wil recover and consumer demand patterns return to normal.
 Fourth, it is not yet known whether agricultural and food supply chains might
resuscitate themselves in a more resilient and responsive form that revives
investment and growth at both the producer and retail ends.
 Final y, despite the signing of a Phase One trade agreement with China, it is
unclear if the United States may resume normal trade with China. Also unknown

73 James Mintert and Michael Langemeier, “Farmer sentiment rises as income prospects improve, concerns about key
policy issues remain,” Purdue/CME Group, Ag Econom y Barom eter, January 5, 2021.
74 USDA farm income projections for 2021 are not covered in this report.
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U.S. Farm Income Outlook: December 2020 Forecast

is whether Chinese large-scale grain purchases in late 2020 and early 2021 could
be one-off events related to the rapid rebuilding of its hog sector following its
collapse from the onset of the African Swine Flu in late 2018.
Figure 8. U.S. Drought Monitor for December

Source: The National Drought Mitigation Center, University of Nebraska-Lincoln, at
https://droughtmonitor.unl.edu/.

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Appendix. Supporting Material on Farm Income
Measuring Farm Profitability
Two different indicators measure farm profitability: net cash income and net farm income.
Net cash income compares cash receipts to cash expenses. As such, it is a cash flow measure representing the
funds that are available to farm operators to meet family living expenses and make debt payments. For example,
crops that are produced and harvested but kept in on-farm storage are not counted in net cash income. Farm
output must be sold before it is counted as part of the household’s cash flow.
Net farm income is a more comprehensive measure of farm profitability. It measures value of production,
indicating the farm operator’s share of the net value added to the national economy within a calendar year
independent of whether it is received in cash or noncash form. As a result, net farm income includes the value of
home consumption, changes in inventories, capital replacement, and implicit rent and expenses related to the farm
operator’s dwel ing that are not reflected in cash transactions. Thus, once a crop is grown and harvested , it is
included in the farm’s net income calculation, even if it remains in on-farm storage.
Key Concepts Behind Farm Income
 Net cash income is general y less variable than net farm income. Farmers can manage the timing of crop and
livestock sales and purchase of inputs to stabilize the variability in their net cash income. For example, farmers
can hold crops from large harvests in on-farm storage to sel in the forthcoming year when output may be
lower and prices higher.
 Off-farm income and crop insurance subsidies, both of which have increased in importance in recent years, are
not included in the calculation of aggregate farm income. Crop insurance indemnity payments are included.
National vs. State-Level Farm Household Data
Aggregate data often obscure or understate the diversity and regional variation that occurs across America’s
agricultural landscape. For insights into the differences in American agriculture, visit the Economic Research
Service (ERS) web pages on “Farm Structure and Organization” and “Farm Household Wel -Being.”75
ERS’s Annual Farm Income Forecasts
ERS releases three farm income forecasts each calendar year. The first forecast general y is released in February as
part of the President’s budget process and coincides with the U.S. Department of Agriculture’s (USDA’s) annual
outlook forum, which convenes toward the end of every February. The initial forecast consists primarily of trend
projections for the year since it precedes most agricultural activity, which occurs later in the spring and summer.
The initial projections rely heavily on assumptions of trend yields and USDA’s baseline forecasts for market
conditions.
ERS’s second farm income forecast is general y released in late August or early September as part of what USDA
refers to as the mid-session budget review. By late August, most planting of major program crops is finished and
crop growing conditions are better known, thus contributing to improved yield estimates. Domestic and
international market conditions and trade patterns also have been established, thus improving forecasts for most
commodity prices and potential farm revenue support outlays. It is not unusual for large variations in farm income
projections to occur between the first and second farm income forecasts.
ERS’s third farm income forecast is general y released in late November (in 2020, it was released on December 2)
and represents a tightening up of the data—preliminary forecasts of planted acres and yields are gradual y replaced
with estimates based on actual field surveys and crop reporting by farmers to USDA. In most years, only smal
variations in farm income estimates occur between the second and third forecasts. The farm income forecast cycle
then begins anew in the succeeding year. However, changes to estimates from previous years continue to occur
for several years as more complete data become available.
This report discusses aggregate national net farm income projections for calendar year 20 20 as reported by ERS
on December 2, 2020,76 which is the third of three USDA farm income forecasts for 2020 (Table A-1).

75 U.S. Department of Agriculture (USDA) Economic Research Service (ERS), “Farm Structure and Organization,” at
http://www.ers.usda.gov/topics/farm-economy/farm-structure-and-organization.aspx; and USDA, ERS, “ Farm
Household Well-Being,” at http://www.ers.usda.gov/topics/farm-economy/farm-household-well-being.aspx.
76 For both national and state-level farm income, see USDA, ERS, “U.S. and State Farm Income and Wealth Statistics,”
http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx.
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Table A-1. USDA Forecasts of U.S. Farm Income in 2020 ($ Billions)
2020:
2020 Forecasts
Feb. to Dec.
Item
2019
2-05-20
9-02-20
12-02-20
(%)a
1. Cash receipts
369.7
384.4
358.3
366.5
-4.7%
Cropsb
193.7
198.6
196.6
200.2
0.8%
Livestock
176.0
185.8
161.7
166.3
-10.5%
2. Government paymentsc
22.4
15.0
37.2
46.5
210.0%
CCP-PLC-ARCd
2.7
3.9
4.8
6.1
56.4%
Marketing loan benefitse
0.0
0.5
0.9
0.2
-60.0%
Conservation
3.8
4.2
4.0
3.8
-9.5%
Ad hoc and emergencyf
1.4
2.5
1.6
2.2
-12.0%
Al otherg
14.5
4.3
25.8
34.1
693.0%
3. Farm-related incomeh
34.7
31.5
33.3
34.1
8.3%
4. Gross cash income (1+2+3)
426.9
430.9
428.8
447.1
3.8%
5. Cash expensesi
317.5
321.3
313.5
313.0
-2.6%
6. NET CASH INCOME
109.4
109.6
115.2
134.1
22.4%
7. Total gross revenuesj
432.3
451.3
446.8
463.2
2.6%
8. Total production expensesk
348.7
354.7
344.2
343.6
-3.1%
9. NET FARM INCOME
83.6
96.7
102.7
119.6
23.7%
Source: CRS using data from USDA, ERS, “Farm Income and Wealth Statistics: U.S. and State Farm Income and
Wealth Statistics,” forecasts dated February 5, 2020, September 2, 2020, and December 2, 2020.
Notes:
a. Change represents the change between the initial February 2 forecast and the December 2 forecast for
2020.
b. Includes Commodity Credit Corporation loans under the farm commodity support program.
c. Government payments reflect payments made directly to al recipients in the farm sector, including
landlords. The nonoperator landlords’ share is offset by its inclusion in rental expenses paid to these
landlords and thus is not reflected in net farm income or net cash income.
d. CCP = countercyclical payments. PLC = Price Loss Coverage. ARC = Agricultu re Risk Coverage.
e. Includes loan deficiency payments, marketing loan gains, and commodity certificate exchange gains.
f.
Includes payments made under the Wildfire and Hurricane Indemnity Program (WHIP), as wel as the
Average Crop Revenue Election (ACRE) program, which was eliminated by the 2014 farm bil (P.L. 113-79).
g. Market Facilitation Program (MFP), Coronavirus Food Assistance Program (CFAP), cotton ginning cost-
share, biomass crop assistance program, milk income loss, and other miscel aneous payments.
h. Income from crop insurance indemnities, custom work, machine hire, agritourism, and other farm sources.
i.
Excludes depreciation and perquisites to hired labor.
j.
Gross cash income plus inventory adjustments, the value of home consumption, and the imputed rental
value of operator dwel ings.
k. Cash expenses plus depreciation and perquisites to hired labor.
USDA Farm Prices Received Indexes for Selected Commodities
Table A-2 presents the annual average farm price received for several major commodities,
including the USDA forecast for the 2020-2021 marketing year for major program crops and
2021 for livestock products.
In addition, Figure A-1 to Figure A-4 present USDA data on monthly farm prices received for
several major farm commodities—corn, soybeans, wheat, upland cotton, rice, milk, cattle, hogs,
and chickens. The data are presented in an indexed format where monthly price data for year
2010 = 100 to facilitate comparisons.
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U.S. Farm Income Outlook: December 2020 Forecast

Table A-2. U.S. Farm Prices and Support Rates for Selected Commodities Since
2018-2019 Marketing Year
% Chg.
% Chg.
Mkt
2018-
2019-
2020-
19/20-
2021-
20/21-
Commoditya
Unit
Yr.
2019
2020
2021b
20/21
2022b
21/22
LRc
RP
Wheat
$/bu
Ju-My
5.16
4.58
4.85
5.9%
—
—
3.38
5.50
Corn
$/bu
S-Ag
3.61
3.56
4.20
18.0%
—
—
2.20
3.70
Sorghum
$/bu
S-Ag
3.26
3.34
4.70
40.7%
—
—
2.20
3.95
Barley
$/bu
Ju-My
4.62
4.69
4.60
-1.9%
—
—
2.50
4.95
Oats
$/bu
Ju-My
2.66
2.82
2.70
-4.3%
—
—
2.00
2.40
Rice
$/cwt
Ag-Jl
12.60
13.50
13.20
-2.2%
—
—
7.00 14.00
Soybeans
$/bu
S-Ag
8.48
8.57
11.15
30.1%
—
—
6.20
8.40
Soybean Oil
¢/lb
O-S
28.26
29.65
38.50
29.8%
—
—
—
—
Soybean Meal
$/st
O-S
308.28
299.5
390.0
30.2%
—
—
—
—
Cotton, Upland
¢/lb
A-Jl
70.3
59.6
68.0
14.1%
—
—
45-52 none
% Chg.
% Chg.
Livestock Products
CY
2018
2019
2020
19-20
2021
20-21
—
—
Choice Steers
$/cwt
Ja-D
117.12
116.78
108.5
-7.1%
115.5
6.4%
—
—
Barrows/Gilts
$/cwt
Ja-D
45.93
47.95
43.2
-9.9%
49.5
14.6%
—
—
Broilers
¢/lb
Ja-D
97.8
88.6
73.2
-17.4%
81.0
10.7%
—
—
Eggs
¢/doz
Ja-D
137.6
94.0
112.2
19.4%
107.5
-4.2%
—
—
Milk
$/cwt
Ja-D
16.27
18.63
18.30
-1.8%
17.65
-3.6%
—
—
Source: CRS using data from various USDA agency sources as described in the notes below.
Notes: Chg = change, CY = calendar year, LR = loan rate, RP = reference price, bu = bushels, cwt = 100
pounds, lb = pound, st = short ton (2,000 pounds), doz = dozen, Ja-D = January to December, Ju-My = June to
May, S-Ag = September to August, O-S = October to September, A-Jl = August to July.
a. Price for grains and oilseeds are from USDA, World Agricultural Supply and Demand Estimates (WASDE),
released January 12, 2021. “—” = no value. USDA’s out-year 2021-2022 crop price forecasts wil first
appear in the May 2021 WASDE. Soybean and livestock product prices are from USDA, Agricultural
Marketing Service: soybean oil—Decatur, IL, cash price, simple average crude; soybean meal—Decatur, IL,
cash price, simple average 48% protein; choice steers—Nebraska, direct 1,100-1,300 lbs.; barrows/gilts—
national base, live equivalent 51%-52% lean; broilers—wholesale, 12-city average; eggs—Grade A, New
York, volume buyers; and milk—simple average of prices received by farmers for al milk.
b. Data for 2020-2021 are USDA forecasts. Data for 2021-2022 are USDA projections.
c. Loan rates (LRs) and reference prices (RPs) are for the 2020-2021 market year as defined under the 2018
farm bil (P.L. 115-334). The loan rate for upland cotton equals the average market-year-average price for
the two preceding crop years but within the range of 45 cents/lb. and 52 cents/lb. See CRS Report R45525,
The 2018 Farm Bil (P.L. 115-334): Summary and Side-by-Side Comparison.

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U.S. Farm Income Outlook: December 2020 Forecast

Figure A-1. Monthly Farm Prices for Corn, Soybeans, and Wheat, Indexed Dollars

Source: USDA, National Agricultural Statistics Service (NASS), Agricultural Prices, December 30, 2020.
Calculations by CRS.
Notes: Monthly farm prices for the 2010-2020 period have been divided by the annual average price for 2010
and multiplied by 100 such that 2010 = 100. Such price indexing facilitates relative comparisons.
Figure A-2. Monthly Farm Prices for Cotton and Rice, Indexed Dollars

Source: USDA, NASS, Agricultural Prices, December 30, 2020. Calculations by CRS.
Notes: Monthly farm prices for the 2010-2020 period have been divided by the annual average price for 2010
and multiplied by 100 such that 2010 = 100. Such price indexing facilitates relative comparisons.
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U.S. Farm Income Outlook: December 2020 Forecast

Figure A-3. Monthly Farm Prices for All-Milk and Cattle (500+ lbs.), Indexed Dollars

Source: USDA, NASS, Agricultural Prices, December 30, 2020. Calculations by CRS.
Notes: Monthly farm prices for the 2010-2020 period have been divided by the annual average price for 2010
and multiplied by 100 such that 2010 = 100. Such price indexing facilitates relative comparisons.
Figure A-4. Monthly Farm Prices for All Hogs and Broilers, Indexed Dollars

Source: USDA, NASS, Agricultural Prices, December 30, 2020. Calculations by CRS.
Notes: Monthly farm prices for the 2010-2020 period have been divided by the annual average price for 2010
and multiplied by 100 such that 2010 = 100. Such price indexing facilitates relative comparisons.
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U.S. Farm Income Outlook: December 2020 Forecast

Author Information

Randy Schnepf
Stephanie Rosch
Specialist in Agricultural Policy
Analyst in Agriculture Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

Congressional Research Service
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