More turnover and production; less income for American farmer

Farm income in the United States is expected to decline by 4.5% ($5.4 billion) this year to $ 113.7 billion. But that's still 15.2% above the 20-year average. Although the turnover in money as well as in quantities produced increases sharply, the final wage decreases slightly due to less government subsidies, higher expenses and inflation. 

Farm net cash income, which more closely tracks farm income and expenditure, will increase by 1.4% ($136.1 billion), which is 13.6% above the 20-year average. But adjusted for inflation, farmers' incomes will fall by 2.1%, mainly due to high production costs and the phasing out of government subsidies for covid pandemic aid, the United States Department of Agriculture (USAD) reported Friday.

Farm net cash income is based on cash receipts from farming, plus government payments and other farming-related income, minus out-of-pocket expenses. Net farm income also takes into account depreciation and changes in inventory values.

Crop revenues are expected to increase by 5.1%, while dairy, livestock and poultry revenues are expected to increase by 8.9%. Government direct payments will decrease from $15.5 billion (in 2021) to $11.7 billion in 2022, the smallest amount since 2015.

Emergency aid for the coronavirus and other forms of ad hoc aid is expected to fall from $19.8 billion in 2021 to $6.2 billion this year. Meanwhile, production costs are expected to rise by 5.1%.

Fertilizer prices alone are expected to be 12% higher this year. Livestock and poultry farmers pay 6.1% more for feed. Labor costs for the hiring of staff are expected to increase by slightly less than 6%.