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2008 Farm Income Forecast

Net Farm Income Is Forecast To Be $86.9 Billion in 2008

Net farm income is forecast to be $86.9 billion in 2008, little changed from the record $86.8 billion farmers are estimated to have earned in 2007, and 42 percent above the 10-year average of $61.1 billion.

Net cash income, at $90.7 billion, is forecast to be $3.3 billion (4 percent) above 2007 and 33 percent above its 10-year average of $68 billion. Net cash income is projected to rise more than net farm income because of the carryover of 2007 crops, which are being sold in 2008.

The story for 2008 is twofold, with a large increase in the value of crop production that is offset by rising production costs for the farm sector. The value of crop production, at $181 billion, is forecast to exceed the 2007 record by $30 billion, or 20 percent. Income performance will not be the same across all farms. In 2008, current commodity and input forecasts indicate that incomes will likely be lower for cotton, specialty crop, and livestock operations. Unlike the situation for grains and oilseeds, receipts on these farms are not expected to rise enough from 2007 levels to offset increases in expenses.

Farm Operator Household Income in Perspective

Average farm operator household income is forecast to be $86,798 in 2008, up less than 1 percent from the 2007 estimate. This contrasts with a 2006-07 increase in farm operator household income of 6.1 percent. The slight increase in the forecasted 2008 income is the result of an increase in off-farm income that just barely compensated for the decline in farm income. Average farm household income from farm sources is forecast to be $5,900 in 2008 (down more than 30 percent from the 2007 estimate); off-farm income is forecast to be $80,897 (up 4.2 percent).

The average share of farm household income from farm sources is forecast to be 7.3 percent in 2008, compared with 10.0 percent in 2007. The long-term trend has farm operator households increasing their reliance on off-farm income. Approximately, 70 percent of farm operator households have either an operator or spouse of an operator working at an off-farm job. Only for the households that operate the largest 8 percent of farms (with sales of $250,000 or more) is average farm income greater than off-farm income in a typical year.

Get the forecast for farm household income.