[Agriculture Fact Book 98]

Net Farm Income by State

Many of the 50 States experienced a recovery in net farm income in 1996 from the substantial declines of the prior year. In 1995, net farm income was down substantially in most States and particularly in the Corn Belt, Northern Plains, and the Southern Plains regions. A decrease in the value of crop output, compared to 1994's record harvest, accounted for most of the lower income in the Corn Belt and Northern Plains, while higher production expenses appear to be more responsible for the income change in the Southern Plains Region. In 1996, net value- added from production in the agricultural sector rose by $2.1 billion in Iowa, the most of any State. This was an increase of 45 percent, but seven additional States had percentage increases of at least that much: Missouri (89%), Illinois (61%), South Dakota (60%), North Dakota (59%), Minnesota (59%), Indiana (46%), and Nebraska (45%). Nationally, cash receipts from sales of corn, soybeans, hogs, and milk were each up by more than $2 billion in 1996 and are among the leading commodities in these eight States, with the exception of North Dakota. Located in the country’s bread basket and geographically contiguous, the eight States accounted for 55 percent of the $15.6 billion increase in U.S. net farm income accruing to producers. Producers in North and South Dakota also benefitted from increased wheat sales.

California continues to lead the Nation in cash receipts and farm income by substantial amounts, reflecting both its substantial land mass and its commodity mix, which is heavily weighted towards commodities with high value of production per acre. California’s net farm income in 1996 rebounded to $5.6 billion, up from $4.6 billion in 1995. Iowa with $4.0 billion, representing a gain of $1.8 billion, earned the second largest net farm income in 1996. Two additional States earned more than $3 billion in net farm income in 1996--North Carolina ($3.4) and Nebraska ($3.1), and five more States exceeded $2 billion--Texas, Illinois, Minnesota, Georgia, and Arkansas. In contrast, in 1995, only four States topped the $2 billion mark-- California ($4.6), North Carolina ($2.7), Texas ($2.5), and Iowa ($2.2).

Florida, Kansas, and Washington round out the top dozen States in 1996 ranked by net farm income. These dozen States accounted for more than 60 percent of the Nation’s net farm income. Of these States, only Florida failed to achieve a higher net farm income in 1996 than in the previous year. Collectively, net farm income for the top 12 States in 1996 was $9.6 billion above 1995. Illinois and Washington entered the top 12 grouping in 1996, displacing Kentucky and Ohio which had been ninth and twelfth in the 1995 ranking. Missouri, Illinois, Indiana, and Minnesota more than doubled their net farm income in 1996 over that earned in the previous year. An extensive set of value-added\farm income tables for States dating from 1949 is available on the ERS World Wide Web site (www.ers.usda.gov).

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