9 Farm Financial Statistics to Know for 2022
While this year is forecast not to exceed the farm profits of 2021, it should still be well above average.
U.S. net farm income, a broad measure of farm profitability, is currently forecasted at $113.7 billion, down 4.5%, according to USDA’s most recent Farm Sector Income Forecast, released Feb. 4.
That is 15% above the 2001-2020 average of $98.7 billion when adjusted for inflation.
“The outlook for agricultural economy in the United States remains solid,” says Cortney Cowley, economist for the Federal Reserve Bank of Kansas City. “But a sharp increase in production costs is weighing on expectations for 2022.”
$113.7 billion: Net farm income, a broad measure of farm profitability, is currently forecasted at $113.7 billion, down 4.5%, or $5.4 billion, from 2021. If realized, this would represent the first drop in net farm income after two consecutive years of gains.
3.5%: For 2022, the rate of return on assets is projected at less than 3.5%. The rate of return in agriculture has been less than 6% for eight consecutive years and is in stark contrast to the 10%-to-16% returns experienced from 2010 to 2012.
57%: Direct government payments are forecast to decrease by $15.5 billion, a whopping 57%, between 2021 and 2022.
$20.1 billion: Production expenses, including operator dwelling expenses, are forecasted to increase by $20.1 billion, or 5%, reaching $411.6 billion in 2022, the highest production costs farmers have ever faced.
$467.4 billion: During 2022, U.S. farm sector debt is projected to increase $13 billion, or nearly 3%, to a record $467.4 billion.
$311.9 billion: Nearly 67% of farm debt is in the form of real estate debt, as for the land to grow crops and raise livestock. Real estate debt is projected to increase $10.2 billion to a record-high $311.9 billion, largely due to an increase in land values across the country.
14%: USDA expects the debt-to-asset ratio to be over 14% for 2022, which would be the highest since 2002, meaning farmers have increased their borrowing.
$93 billion: Working capital is projected to fall by $3.1 billion, or 3.3%, to $93 billion, which is the first decline since 2016.
$88,234: Median total farm household income is forecast to be relatively flat in 2021 at $83,311 and increase to $88,234 in 2022.
Crowley spoke at USDA’s 2022 Agricultural Outlook Forum this week. Read more coverage:
USDA Anticipates 92 Million Acres of Corn, 88 Million Acres of Soybeans
