Farm income is expected to decline 4% from 2023. Shown is a corn field in Saunders County, Nebraska, just outside Ashland, in August 2022. (Aaron Sanderford/Nebraska Examiner)
Farm income is forecast to decline 4% in 2024 compared to 2023, largely due to a decline in cash receipts, or gross income, from staple crop sales, according to the December update to the Farm Income Forecast from the United States Department of Agriculture. .
Carrie Litkowski, agricultural income team leader at the USDA Economic Research Service, presented the latest update in a webinar on Tuesday and said the forecast was very similar to the previous version from September.
“But somehow it feels a little more important, as we approach the end of the year, to evaluate the current state of the agricultural economy as a starting point for considering what challenges and opportunities lie ahead for American agriculture, Litkowski said.
Net cash farm income for 2024 is expected to be $158.8 billion, which in inflation-adjusted figures is 3.5% lower than net cash farm income in 2023. However, the forecast shows the 2024 figure to be 9.8% above 20 -yearly average is. net cash farm income, and represents a less gradual decline than that from 2022 to 2023.
Net cash farm income is income minus farm expenses, including government payments, but excluding items such as changes in inventories or economic depreciations, which are reflected in ‘net farm income’ figures.
Sales of agricultural commodities are expected to decline by less than 1 percent overall, as a more than 8% increase in animal and animal product revenues nearly offsets a more than 9% decline in forecast crop yields.
As a result, the net cash income of all farms specializing in crops is expected to be lower this year than last year, but all farms specializing in animals or animal products are expected to have higher net cash farm income than in 2023.
This could mean lower net income for Iowa’s agricultural sector through 2024, as the majority of cash revenues on Iowa farms in 2023 were for corn and soybeans, which are expected to grow by 23% and 14%, respectively, nationally in 2024 valleys. .
Crop yields are expected to decline by 2024, except for vegetables and melons, which are expected to rise. Cash receipts for livestock and animal products are expected to increase by 2024. (Courtesy of USDA)
The data used in the USDA ERS forecasts represents the entire agricultural sector of nearly 2 million farms and ranches. Litkowski said the reports are used to inform policymakers and lenders, and to determine the agricultural sector’s contributions to the U.S. economy.
It is predicted that by 2024, farmers will have less need for additional aid and disaster relief, as well as lower payments to milk margins. That will result in an expected decline of $1.7 billion from 2023 in direct government payments to farmers.
Litkowski said natural disasters such as Hurricanes Helene and Milton have not yet shown up in the data because much of the harvest in the affected areas had already been completed at the time of the hurricanes and no payments have yet been made.
“Natural disasters have the potential to impact farm incomes, and historically they have,” Litkowski said. “Sometimes it just takes time to know the impact.”
USDA also predicts overall lower input costs, especially in the form of fertilizers and pesticides for farmers by 2024. However, other inputs, such as labor, interest rates, and the purchase of livestock and poultry, are expected to have increased.
The average farm income for 2024 is expected to rise to $100,634, which is almost 3% higher, without adjusting for inflation, from 2023. Non-farm income, which represents the majority of income for most farm families, will expected to rise in 2024, after a slight decline over the past three years.
Litkowski clarified that “half of all farms are residential farms” where the owner’s primary occupation is not farming, which typically results in the median farm income being shown as a negative amount.
The forecast will be updated again on February 6, when the department will release its first projections for 2025.
This article first appeared in the Iowa Capital Shippinga sister site to the Nebraska Examiner in the States Newsroom network.
