2022 Net Farm Income Could Top $8 Billion
All signs point to another year of strong farm income for Nebraska farmers and ranchers when the final numbers are tallied. The USDA Economic Research Service projects record farm income for the nation’s producers collectively. And projections last fall by Center for Agricultural Profitability at the University of Nebraska (UNL) and the Rural and Farm Finance Policy Analysis Center at the University of Missouri show net farm income in Nebraska will top $8 billion (Figure 1). While slightly lower than 2021 farm income, if realized, 2022 would mark the second consecutive year net farm income in Nebraska topped $8 billion.
The robust income stems from higher receipts. Crop and livestock receipts are projected to be $2.3 billion and $2.4 billion above 2021 levels, respectively. Crop insurance indemnities are also expected to be larger due to drought. Drought reduced last year’s corn production 16 percent and soybean production 19 percent compared to 2021 but higher prices in 2022 are expected to offset the production losses resulting in greater receipts. Crop producers did not go unscathed from the drought though—Nebraska Farm Bureau estimates the drought could have reduced the value of the corn, soybean, and wheat crops over $2 billion compared to what might have been. Drought also impacted cattle producers forcing many ranchers to liquidate part of their herds, retain fewer heifers, or move calves into feedlots earlier than planned, which along with higher prices contributed to higher receipts for cattle producers.
On the other side of the ledger higher expenses and less government payments should partially mitigate the increased receipts. Feed costs, projected by UNL and the University of Missouri to be $1.2 billion higher, and fertilizer expenses, projected $1 billion higher, drive the cost increases. Adding it all up, net farm income last year is expected to be the second highest on record in Nebraska, nearly 4 times greater than 2017. Strong results given the “odd” year.
Figure 1. Nebraska Net Farm Income
Source: USDA, Economic Research Service, 2000-2021; 2022 projection from UNL Center for Agricultural Profitability and University of Missouri Rural and Farm Finance Policy Analysis Center.
