February 29, 2024

Interpretive Summary: 2024 Farm Sector Income Forecast is published

2024 Farm Sector Income Forecast is published 

By: Sydney Sheffield 

The United States Department of Agriculture’s (USDA) Economic Research Service (ERS) has published the 2024 Farm Sector Income Forecast report. This annual report measures, forecasts, and explains indicators of economic performance for the U.S. farm sector and farm businesses by resource region and commodity specialization. The net farm income for 2024 is forecasted to fall by 26% from the previous year. 

“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,” said USDA Agriculture Secretary Tom Vilsack. “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.” 

Net farm income reached $185.5 billion in 2022. After decreasing by $29.7 billion (16%) from 2022 to a forecast of $155.9 billion in 2023, net farm income in 2024 is forecast to decrease further from the 2023 level by $39.8 billion (26%) to $116.1 billion. Net cash farm income reached $202.3 billion in 2022. After decreasing by $41.8 billion (21%) from 2022 to a forecast of $160.4 billion in 2023, net cash farm income is forecast to decrease by $38.7 billion (24%) to $121.7 billion in 2024.

Direct Government farm payments are forecast at $10.2 billion in 2024, a $1.9 billion (15.9%) decrease from 2023. Direct Government farm payments include Federal farm program payments paid directly to farmers and ranchers but exclude USDA loans and insurance indemnity payments made by the Federal Crop Insurance Corporation (FCIC). This decline is largely because of lower supplemental and ad hoc disaster assistance to farmers and ranchers in 2024 compared with 2023.

Farm sector equity is expected to increase by 4.7% ($166.2 billion) from 2023 to $3.74 trillion in 2024 in nominal terms. Farm sector assets are forecast to increase 4.7% ($193.2 billion) to $4.28 trillion in 2024 following expected increases in the value of farm real estate assets. Farm sector debt is forecast to increase 5.2% ($27.0 billion) to $547.6 billion in 2024. Debt-to-asset levels for the sector are forecast to worsen slightly from 12.73% in 2023 to 12.78% in 2024. Working capital is forecast to fall 16.6% in 2024 relative to 2023.

Total animal/animal product cash receipts are expected to decrease by $4.6 billion (1.9% in nominal terms) from 2023 to $239.8 billion in 2024. While receipts for most major animal/animal products are projected to fall, receipts for hogs and broilers are expected to remain relatively unchanged.

“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,” said Vilsack. 

Check out the full report here.