ERS projects higher crop receipts and lower government payments
The Agriculture Department’s Economic Research Service said Wednesday that it forecasts cash receipts for all commodities to increase $10.1 billion (2.7%) to $384.4 billion (in nominal terms) in 2020 while government payments decrease.
The increase will come from animal and animal product sales. Total animal/animal product receipts are expected to increase $8.2 billion (4.6%) following growth in receipts for hogs, milk, cattle/calves and poultry/eggs.
Total crop receipts are expected to be largely unchanged, increasing $1.9 billion or 1% from 2019 levels in nominal terms but declining 0.9% when adjusted for inflation.
Direct government farm payments are forecast to decrease $8.7 billion (36.7%) to $15 billion in 2020 (in nominal terms), with the decrease caused by lower anticipated payments from the Market Facilitation Program.
ERS said net cash farm income is forecast to decrease $10.9 billion (9%) to $109.6 billion in 2020, relative to the 2019 forecast. Net farm income, a broader measure of profits, is forecast to increase $3.1 billion (3.3%) from 2019 to $96.7 billion in 2020.
The divergence in annual changes between the two measures of net income is because the net cash farm income forecasts include $14.7 billion in cash receipts from the sale of crop inventories in 2019 and $0.5 billion in 2020, contributing to the 2020 decline in net cash farm income. Net farm income excludes those sales from inventories as it measures production in the year in which it occurred, not the year in which it was sold.