Farm Income

AAA

DEFINITION of 'Farm Income'

Farm income refers to profits and losses incurred through the operation of a farm. A farm income statement (sometimes called a farm profit and loss statement) is a summary of income and expenses that occurred during a specified accounting period. This period is usually the calendar year for farmers (January 1 - December 31).

BREAKING DOWN 'Farm Income'

In U.S. agricultural policy, farm income can be divided as follows:


Gross Cash Income: the sum of all receipts from the sale of crops, livestock and farm related goods and services, as well as any direct payments from the government.


Gross Farm Income: the same as gross cash income with the addition of non-money income, such as the value of home consumption of self-produced food.


Net Cash Income: the gross cash income less all cash expenses, such as for feed, seed, fertilizer, property taxes, interest on debt, wagers, contract labor and rent to non-operator landlords.


Net Farm Income: the gross farm income less cash expenses and non-cash expenses, such as capital consumption and farm household expenses.


Net Cash Income: a short-term measure of cash flow.

RELATED TERMS
  1. Crop Method

    This method of accounting is available for farmers who do not ...
  2. Adjusted Gross Income - AGI

    A measure of income used to determine how much of your income ...
  3. Profit and Loss Statement - P&L

    A financial statement that summarizes the revenues, costs and ...
  4. Investment Farm

    An agricultural business operation that is purchased and operated ...
  5. Taxable Income

    The amount of income that is used to calculate an individual's ...
  6. Crop Year

    The time period from one year's harvest to the next for an agricultural ...
Related Articles
  1. Forex Education

    Trading The Non-Farm Payroll Report

    Discover how to trade the NFP report without getting knocked out by the irrational volatility it can create.
  2. Fundamental Analysis

    Calculating Return on Net Assets

    Return on net assets measures a company’s financial performance.
  3. Credit & Loans

    What's a Nonperforming Loan?

    A nonperforming loan is any borrowed sum where the borrower has failed to pay scheduled payments for at least 90 days.
  4. Economics

    Understanding Cost of Revenue

    The cost of revenue is the total costs a business incurs to manufacture and deliver a product or service.
  5. Economics

    Understanding Cash and Cash Equivalents

    Cash and cash equivalents are items that are either physical currency or liquid investments that can be immediately converted into cash.
  6. Economics

    Explaining Carrying Cost of Inventory

    The carrying cost of inventory is the cost a business pays for holding goods in stock.
  7. Investing

    How To Calculate Minority Interest

    Minority interest calculations require the use of minority shareholders’ percentage ownership of a subsidiary, after controlling interest is acquired.
  8. Economics

    Explaining Replacement Cost

    The replacement cost is the cost you’d have to pay to replace an asset with a similar asset at the present time and value.
  9. Economics

    How Does National Income Accounting Work?

    National income accounting is an economic term describing the system used by a country to gather data and determine aggregate economic activity.
  10. Investing Basics

    3 Companies That Hate Debt Financing

    Learn how companies such as Chipotle, Bed Bath & Beyond, and Paychex are able to maintain impressive levels of growth without debt financing.
RELATED FAQS
  1. What are some examples of general and administrative expenses?

    In accounting, general and administrative expenses represent the necessary costs to maintain a company's daily operations ... Read Full Answer >>
  2. How do dividend distributions affect additional paid in capital?

    Whether a dividend distribution has any effect on additional paid-in capital depends solely on what type of dividend is issued: ... Read Full Answer >>
  3. Why can additional paid in capital never have a negative balance?

    The additional paid-in capital figure on a company's balance sheet can never be negative because companies do not pay investors ... Read Full Answer >>
  4. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  5. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  6. How often should a small business owner go through a bank reconciliation process?

    Small business owners should go through the bank reconciliation process at least monthly, and many business consultants recommend ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  2. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  3. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  4. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  5. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  6. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!