Economic Tidbits

Net Farm Income Hits Record

The USDA Economic Research Service (ERS) reports net farm income in Nebraska in 2021 was $8.045 billion, a record exceeding the previous high of $7.49 billion set in 2011. Last year’s increase, 35 percent, marked the fourth consecutive year of gains and resulted from surging crop and livestock receipts. Crop receipts last year were up 23 percent over 2020, totaling $13.4 billion, and livestock receipts were up 16 percent, equaling $12.9 billion. Crop receipts exceeded livestock receipts for just the fifth time over the past 22 years. Nebraska’s gross farm receipts, $29.7 billion, were the third-highest in the nation following California and Iowa. Combined, the three states accounted for one quarter of U.S. farm receipts.

Figure 1. Nebraska Net Farm Income

 Source: NEFB graphic based on USDA Economic Research Service data

The higher receipts, though, were partially offset by significantly higher expenses. Feed expenses increased nearly 27 percent compared to 2020. Fertilizer expenses were up 24 percent. Fuel and oil expenses were up 37 percent. And marketing, storage, and transportation costs were 33 percent higher. In total, expenses tallied around $20 million, an increase of roughly 21 percent over 2020.

What does 2022 have in store regarding farm income? The ERS projects U.S. net farm income this year will grow 5 percent. Again, receipts are expected to push income higher. Crop receipts are forecast to increase 15 percent and livestock receipts 28 percent. The ERS projects total production expenses will rise 18 percent. But it’s hard to foresee Nebraska farm income following in the footsteps of U.S. farm income. Drought-reduced yields, storm damage, higher input costs, short hay/forage supplies, and higher feed costs will dampen income prospects. Expect this year’s farm income for the state to be less than last year, but still well above the average of $4.9 billion over the past decade.

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