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Falling Farm Income Forecast


Corn ready for harvest in fall

Producers should prepare: 2024 won’t be like 2021, 2022, or 2023, according to the USDA farm income forecast. “After the three highest consecutive years on record in 2021-2023, the first farm income forecast of 2024 indicates net farm income this year will return to prior levels,” a statement from U.S. Secretary of Agriculture Tom Vilsack said.                                                        


Headshot of tom vilsack
U.S. Secretary of Agriculture Tom Vilsack. Photo courtesy: USDA.

Vilsack’s statement included praise for the work of producers across the country. “During this period of record farm income, U.S. farmers rose to the occasion by producing strong harvests and increasing commodity stocks while the U.S. economy recovered more quickly and more robustly than that of the global economy from COVID-19.”


But reality lies ahead, Vilsack warned. And that reality will include a handful of factors that will challenge income. “As a result, while we have rebuilt the global supply, we are seeing a decreased demand for U.S. commodities and commodity prices are coming down. At the same time, while some production costs have come down, others, including labor, pesticides, and livestock purchases, have increased,” his statement read.


And this was the way Vilsack’s statement explained what producers could expect in 2024: “This brings us to the slightly below historic levels for farm income forecasted today.”


“Slightly below historic levels” will mean a projected drop in income of 25.5 percent in 2024 compared to 2023. And 2023 is also expected to show a farm income decline of 16 percent. Back-to-back years of income adjustments.


Farm Sector Profits 

  • 2022: $185.6 billion

  • 2023: $155.9 billion

  • 2024: $116.1 billion

(Source: American Farmland Owner calculations based on USDA data.)

 

The USDA reported that the downward trend puts 2024’s expected profits below the average of the previous two decades.


US Net farm income and net cash graph since 2003

                                   

Net Cash Farm Income

  • 2024: $121.7 billion

  • 2003-2022: $141 billion (annual average) 

(Source: USDA calculations.)

 

The USDA 2024 forecast expects cash receipt declines in corn, soybeans, animal/animal product, eggs, turkeys, cattle/calves, and milk. Direct government payments are also expected to drop, while production costs are expected to rise.


In response to the USDA forecast, American Farm Bureau Federation President Zippy Duvall said in a statement, “Farm families are suffering through the same economic hardships as all families in America. High inflation is making the food farmers grow more expensive to produce and is cutting into the income farm families rely on to pay bills, provide an education for their children, and reinvest in their community.”


Duvall added, “We urge Congress to focus on bringing costs down and passing a new farm bill, both of which will help ensure farmers can continue meeting the needs of a growing nation.”



A reminder: Congress failed to pass a new Farm Bill in 2023 and instead temporarily extended the expiring agreement.


Vilsack’s statement pledged support for the agricultural community. “The forecast underscores the critical importance of USDA’s ongoing work to help foster prosperity for producers and the communities they love by supporting an economy that grows from the bottom up and the middle out, and by creating new market opportunities that promote competition in the marketplace that can help combat low prices and high input costs.”

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