Net Farm Income Highest Since 2015

The USDA Economic Research Service estimates 2019 Nebraska net farm income rose $1.6 billion to $4.2 billion, a 61 percent increase compared to 2018 and the highest income level since 2015 when it equaled $4.8 billion (Figure 1). Last year’s increase was fueled by an increase in government assistance, $435 million, and a decline in expenses of slightly more than $1 billion. Direct government payments in 2019 accounted for 27 percent of net farm income for the second consecutive year (Figure 2).

Crop receipts last year were 4 percent higher, or $353 million, compared to 2018 due to increased receipts for feed grains, up 8 percent. Oil crop receipts, mostly soybeans, were off 4 percent. Livestock receipts were largely the same as the prior year, down 0.37 percent. Overall, the value of agricultural production in the state did not change compared to 2018 at $22.5 billion. Producers spent less on feed purchases, crop inputs, storage and transportation, and rent paid to non-operator landlords. They spent more on machine hire and custom work, contract labor, irrigation, and seed purchases.

What’s in store for farm income this year? It’s anyone’s guess. Crop and livestock receipts should be lower compared to last year given drop in prices due to COVID-19. Costs for fuel and transportation might be lower, but feed costs could be higher due to changing rations and irrigation costs higher due to drier conditions. COVID-19 relief payments mean government assistance should be higher. Some projections suggest government assistance could account for more than 35 percent of farm income this year. No doubt producers already have a good idea how the year will end up for them. For everyone else, the USDA will provide 2020 income estimates for the state next September.

Figure 1. Nebraska Net Farm Income

Source: USDA, Economic Research Service

Figure 2. Government Payments as a Share of Net Farm Income

Source: USDA, Economic Research Service