Soybean field with white house in the distanceUDSA boosted the projected 2021 net farm income by 23% ($22 billion) to $116.8 billion – the highest level seen since 2013. USDA’s Economic Research Service forecasts farm cash receipts to increase by 17.8% ($64.7 billion) to $427.3 billion for the year. Higher commodity prices are driving much of the increase, with USDA noting a $63.3 billion price change for crops and animal products, accounting for nearly 98% of the boost in farm cash receipts. Corn receipts are forecasted to be 52.4% higher at $24.4 billion while soybeans are expected to increase 20.8% to $8.6 billion, both due to higher prices and increased production. Other commodities forecasted for higher 2021 cash receipts include wheat, cattle, hogs, milk and poultry.

However, despite the increase in prices, USDA projects average 2021 farm household income to remain relatively flat at $82,315 for the median household. This is due to the increase in input costs, where USDA pegs overall production costs to rise by 8.3% to $29.8 billion for 2021. Feed for livestock and poultry were the highest drivers of increased costs. Overall, farm debt is expected to increase by 2.9%, but fall 0.8% when adjusted for inflation.

Read more on USDA net farm income predictions for 2021.