The 2003 forecast net value added of $93.2 billion is up $2.4 billion from this year's initial forecast and 25 percent higher than the revised 2002 forecast. The 2003 forecast is 8 percent above the 1993-2002 average. Net value added is a measure of the contribution of agricultural production to national and State economies. It is also a measure of the income earned by stakeholders (participants who contribute resources for a predetermined payment) and investors (participants who contribute resources with the expectation of receiving additional financial rewards for sharing in the risks of production). The 2003 forecast value of crop production is up nearly $10 billion from 2002, with livestock value also higher.
After payments to stakeholders, the residual income is net farm income. It represents a return to those who provide land, labor, capital, and management without any assurance of earnings. For 2003, net farm income is forecast to be $46.2 billion, up 53 percent from 2002.
Average farm operator household income for 2003 is forecast at $65,795, up 7 percent from last year. Increases in crop and livestock receipts and government payments are causing the farm income component of total household income to recover from the year-ago low. Current projections for 2002 suggest that average farm operator household income was less than the previous year. An increase in earnings from off-farm sources was insufficient to offset a reduction in livestock receipts and shifting government payments from 2002 to 2003.
for the full 2003 forecast, go to the Farm Income and Costs Briefing room.
ERS has traditionally estimated income of the farm sector as a whole. Recently, ERS switched to estimating value added for the farm sector and farm households, combining value-added measurement concepts with farm-level production and cost information from the Agricultural Resource Management Survey (ARMS) to develop a value-added account for each farm. For more information, see these reports:
Income, Wealth, and the Economic Well-Being of Farm Households—Using ARMS data, this analysis hinges on a new concept of economic well-being that captures farm household wealth and expenditures in addition to more conventional income measures. The report also addresses pertinent policy issues, such as whether farm households are inherently disadvantaged and how their incomes, wealth, and household expenditures compare with nonfarm households. While the economic well-being of a vast majority of farm households appears favorable in comparison to nonfarm households, between 6 and 21 percent of farm households exhibit difficult circumstances. Many of these households hold wealth in their businesses that could be used to sustain consumption. However, lower income, lower wealth households, many of whom appear to be beginning farmers, have relatively low levels of consumption, low incomes, and few resources to offset any unexpected income shortfall either from farming or elsewhere.
For complete 2003 farm income forecast data, see the farm income data page.
For detailed Standard financial statements (income statement, balance sheet) and financial ratios for various classifications of farms such as farm type, economic class, region, operator age, and farm typology, see the farm financial management data page. Data are for 1996-2001.
For current status and trends in production practices for major crops (corn, soybeans, wheat, and cotton), see the crop production practices data page. Data include annual summaries for field-level data by crop, including: irrigation technology and water use, nutrient use and nutrient management practices, crop residue management practices, pest management practices and pesticide use, and crop seed variety. Data summaries are available for production years 1996-2000.