According to ERS, both net farm income and net cash income are forecast lower in 2016, for a
third consecutive year of decline. U.S. net farm income is forecast at $71.5 billion in 2016, a drop
of over $9 billion (-12%) from 2015’s level (Figure 1 and Table 1). This represents the lowest net
farm income forecast since 2009 in both nominal and inflation-adjusted dollars (Figure 2).
Measured in cash terms, net cash income in 2016 is also projected lower at $94.1 billion, down
over $14 billion (-13%) from the previous year. Since the record highs of 2013, net farm income
and net cash income have fallen by 42% and 31%, respectively (Figure 1).
These forecasts are preliminary and will depend on both final crop harvests and market
developments. The ongoing drought in California (now in its fifth year) remains of particular
concern since nearly half of U.S. fruit, vegetable, and tree nut production occurs there. Also, the
safety net programs of the 2014 farm bill are expected to make substantial payments as a result of
relatively lower (and declining) commodity prices in 2015 and 2016.