Documentation for the USDA, Economic Research Service Agricultural Resource Management Survey-Based Forecast Models for Farm-Level and Farm Household Income

This report documents the methods used to produce the USDA, Economic Resource Service’s (ERS) forecasts of farm-level average net cash farm income and farm household level median and mean income. These forecasts, released three times per year, provide insights into the financial well-being of farms and the households that operate them. Historical components of the financial indicators are drawn from the annual Agricultural Resource Management Survey (ARMS), a representative cross-section of farms in the 48 contiguous States. Forecasts are generated using models that begin with micro-level data from ARMS and incorporate USDA, ERS sector-level net cash farm income forecasts, along with broader, economy-wide forecasts. These models project changes in two income categories: income from farm operations and off-farm household income. Summary statistics are reported in two USDA, ERS data products: the Farm Income and Wealth Statistics and the Farm Household Income and Characteristics. These forecasts support informed decision-making by farm operators, policymakers, and other agricultural stakeholders by highlighting expected income trends across various farm types, sizes, and specializations, and projected changes in farm household financial well-being.