USDA’s broad measure of profits, net farm income, is forecast to drop 25.5% from 2023. That’s nearly 41% lower than 2022’s record when adjusted for inflation.
USDA forecast net farm income to be $116.1 billion. That’s 1.7% lower than the 20-year average.
Net cash farm income is expected to fall significantly below the long-run average. Net cash income measures cash farm-related income from the year minus cash expenses and excludes changes in inventory, depreciation and rental income from dwellings.
USDA expects net cash farm income to decline by 24.1% from 2023 to $121.7 billion in 2024. That’s 13.7% lower than the 2003-2022 average and 43.2% below 2022. Lower cash receipts, lower direct government payments and higher production expenses all play a role in declining farm incomes.
USDA Secretary Tom Vilsack offered the Administration’s view on why the federal government needs to step and offer more regulation to offset this downturn predicted by the agency’s economists as the U.S. Department of Agriculture’s (USDA) Economic Research Service released its annual Farm Sector Income Forecast report for 2024.
“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. 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. 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. This brings us to the slightly below historic levels for farm income forecasted today.
“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.
“Under the Biden-Harris Administration, USDA has taken unprecedented actions to level the playing field so small and mid-sized farmers can get a fair price for their products, while making billions of dollars in transformative investments through the American Rescue Plan and Inflation Reduction Act to create new markets and new income opportunities for family farmers. USDA will continue to focus its efforts on enhancing economic resiliency and robust price competition, increasing farmers’ and ranchers’ earnings, increasing the ability to compete, and keeping farming viable and rural communities thriving.”