USDA recently raised its forecast for U.S. net cash income to $85.3 billion in 2010, up $16.1 billion (23.3 percent) from 2009, and $13.4 billion above its 10-year average of $71.8 billion.
While many focus on net farm income, most observers focus on net cash income as a much more accurate barometer of U.S. agriculture. USDA noted the following relative to net farm income versus net cash income: "Net farm income reflects income from production in the current year, whether or not sold within the calendar year; net cash income reflects only the cash transactions occurring within the calendar year. Net farm income is a measure of the increase in wealth from production, whereas net cash income is a measure of solvency, or the ability to pay bills and make payments on debt."
As for net farm income, USDA's forecast is $77.1 billion in 2010, up $14.9 billion (24 percent) from 2009.
The 2010 forecast is $12.3 billion above the average of $64.8 billion in net farm income earned in the previous 10 years. The $77.1 billion forecast for 2010 remains the fourth largest amount of income earned in U.S. farming. According to USDA, "The top five earnings years have occurred since 2004, attesting to the profitability of farming this decade. Farm income exceeded $80 billion in 2004 and 2008 and topped $70 billion in 2005 and 2007."
In a teleconference highlighting the farm income forecast and the U.S. export forecast, both of which were updated, Agriculture Secretary Tom Vilsack credited the stronger performance forecast for U.S. agriculture in 2010 to the 2008 farm bill and efforts by the Obama administration to move the economy forward.
He also lauded the "hard work" and productivity of U.S. agriculture as another factor helping to bring an income recovery. U.S. agriculture entered the recession "with little debt and that has helped us to survive," Vilsack said. "I am hopeful that agriculture is leading the way to an economic recovery."
Vilsack said farm household income is also forecast to rise by 5.8 percent in 2010, something he said was key since that includes the impact of off-farm income. "Off farm income is up 3.3 percent," he noted, "a rate faster than the general economy." He reasoned that is why rural areas have recovered faster than non-rural areas in terms of the employment picture.
