Baseline update for U.S. farm income and the farm balance sheet

ABSTRACT

Record government payments to farmers, tied to COVID-19 relief efforts, support farm income in 2020. If no new government programs are made available, government payments and net farm income both decline sharply in 2021. This report utilizes commodity supply, demand and price projections from the FAPRI-MU baseline update released in August 2020 (FAPRI-MU Report #04-20, available at www.fapri.missouri.edu). Historical farm income figures are from USDA's Economic Research Service, and reflect the revision made in early September 2020 to previous estimates of 2019 farm production expenses and farm income. The baseline estimates reflect policies in place in late August 2020. Based on existing program rules, Coronavirus Food Assistance Program (CFAP) payments are assumed to total $11 billion in 2020. The 2020 farm income estimates also incorporate Market Facilitation Program (MFP) payments associated with 2019 production that were made in the early months of 2020, as well as $5.8 billion in benefits under the Paycheck Protection Program (PPP). Additional support programs may be developed in the future, but they are not included in these baseline projections. This is one source of difference between these estimates and those of the Economic Research Service, which assumed that the full $16 billion allocated to CFAP would be used to make payments in 2020.