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. Investment Farm

    An agricultural business operation that is purchased and operated ...
  2. IRS Publication 225 - Farmer's ...

    A document published by the Internal Revenue Service that details ...
  3. Farm Price Index - FPI

    An index that monitors the prices received by farmers for sales ...
  4. Banks For Cooperatives

    Established by the Farm Credit Act of 1933, these regional, privately-owned ...
  5. Content Farm

    Content farming has been likened to the “fast food” of the internet ...
  6. Federal Farm Credit System - FFCS

    In the United States, a network of federally chartered financial ...
Related Articles
  1. Insights

    Smart Farming Technology Storms Silicon Valley

    Silicon Valley may be known for growing tech startups, but now the iconic region is welcoming an entirely new breed of residents, startups focusing on smart farming.
  2. Insights

    How To Invest In Farming Without Owning a Farm

    Investors have a number of ways to get exposure to the agriculture and farming sector besides actually having to buy a farm.
  3. Investing

    Technology: Increasing Indoor Farming's Efficiency

    Indoor farming has gone high-tech. An increasing number of investors are now sitting up and taking notice.
  4. Investing

    Warren Buffett and the Mania of Mr. Market

    The stock market, or Mr. Market as conceptualized by Warren Buffett and Benjamin Graham, is an erratic, moody individual. Discover how to profit from his mania.
  5. Investing

    Understanding the Income Statement

    The best way to analyze a company—and figure out if it's worth investing in—is to know how to dissect its income statement. Here's how to do it.
  6. Investing

    There Are More Ways To Invest In Land Than You Think

    You don't have to have a huge amount of capital to invest in land. You have many other options, including land-related ETFs and ETNs.
  7. Taxes

    Explaining Taxable Income

    Taxable income is the net of gross income and allowable deductions.
  8. Investing

    What Is The Difference Between A Cash Flow Statement And An Income Statement?

    A firm’s cash flow statement measures the sources and uses of its cash. The income statement shows how it is financially performing.
  9. Investing

    Is Net Income The Same As Profit?

    Net income and profit both deal with positive cash flow, but there are important differences between the two concepts.
  10. Small Business

    Three Agriculture Startups Disrupting Monsanto

    Even as technology startups have disrupted other industries, agriculture has remained immune to its effect. But that is about to change.
RELATED FAQS
  1. When do I need to file an IRS Schedule F form?

    If you are a farmer, your farming business may require you to file a Schedule F with the IRS. Read Answer >>
  2. What is the point of agricultural subsidies?

    Read about the historical origins of agricultural subsidies, and find out why the government spends hundreds of billions ... Read Answer >>
  3. What is the difference between gross income and earned income?

    Being able to distinguish between earned income and gross income is an important tool in preparing for and filing your individual ... Read Answer >>
  4. What is the difference between gross profit, operating profit and net income?

    Learn about the relationship between gross profit, operating profit and net income and how these financial concepts are calculated. Read Answer >>
  5. What is the difference between operating income and gross profit?

    Learn more about the difference between operating income and gross profit, two accounting figures that appear on a company's ... Read Answer >>
  6. What is the difference between comprehensive income and gross income?

    Learn the specifics of both comprehensive income and gross income, how they are legally defined, and the primary difference ... Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center