The USDA Economic Research Service’s (ERS) first estimate of 2020 Nebraska net farm income pegged it at $5.3 billion, nearly $1.4 billion or 35 percent higher compared to 2019. It’s the highest income level seen since 2014 (Figure 1). The increase was fueled by higher crop prices, reduced expenses, and a significant increase in government assistance through COVID-19 and trade assistance. Adjustments to 2019 net income also added to the increase in 2020. The USDA lowered the estimate of 2019 income from $4.2 billion to $3.9 billion.
Crop receipts last year were 2 percent higher compared to 2019, or $315 million, mostly due to increased soybean receipts, up 13.5 percent. Livestock receipts were less last year compared to 2019, down 6.8 percent. Receipts for meat animals (cattle, hogs, goats) were off $936 million, but poultry and eggs receipts were up $27 million. Overall, the value of agricultural production was off 1.5 percent. Direct government payments were $1.3 billion higher and accounted for 46 percent of net farm income, significantly higher relative to the previous decade, but not near levels seen in the early 2000s. On the other side of the ledger, farm expenses were down 2.2 percent, or $315 million. Producers spent less on feed purchases, livestock purchases, pesticides, fuel, and storage and transportation in 2020. COVID-19 no doubt played a role in the reduced expenses.
The USDA ERS forecasts U.S. net farm income will increase 19.5 percent this year. Most of the increase is driven by higher corn and soybean receipts, estimated to be 43.6 percent higher. Livestock receipts are projected higher this year too, 16 percent. Farm expenses, too, are projected higher, 7.5 percent, led by increases in feed costs and livestock purchases. Government assistance will be significantly lower with just a minimal amount of COVID-19 relief payments expected. Farm program payments will be few and trade assistance has run its course.
Nebraska net farm income in 2021 is likely to be higher too. UNL Agricultural Economist, Brad Lubben, earlier this year forecast net farm income would near $6 billion. If Nebraska net farm income were to grow by the estimated percentage increase in national farm income, it could surpass $6 billion, a level not seen since 2011 and 2013 when income surpassed $7.0 billion. No doubt producers have a pretty good feel how the year will end up for them. For everyone else, the USDA will provide its estimates next year.
Figure 1. Nebraska Net Farm Income