According to the December update of the U.S. Department of Agriculture’s farm income prediction, farm revenue is expected to have dropped 4% from 2023 to 2024, primarily due to a decline in cash receipts, or the gross income from the sale of commodity crops.
In a webinar on Tuesday, Carrie Litkowski, the USDA Economic Research Service’s farm income team leader, provided the most recent update, stating that the prediction was quite comparable to its prior September version.
However, as the year draws to a close, it seems a little more crucial to assess the farm economy’s current situation as a foundation for thinking about potential obstacles and prospects for American agriculture, Litkowski said.
According to projections, net cash farm income in 2024 will be $158.8 billion, which is 3.5% less than net cash farm income in 2023 when adjusted for inflation. However, according to the prediction, the 2024 figure is 9.8% higher than the 20-year average for net cash farm income and shows a less steady fall than the 2022–2023 figure.
The difference between the farm’s income and its expenses, including government payments, is known as net cash farm income. This figure does not include items like changes in inventories or economic depreciations.
According to USDA, Idaho’s net farm income in 2023 was $2.9 billion.
The over 8% gain in animal and animal product receipts almost balances the over 9% decline in predicted crop receipts, resulting in a less than 1 percent total decline in the sale of agricultural commodities.
The net cash income of all farm businesses that specialize in crops is therefore expected to be lower this year than last, while the net cash income of all farm businesses that specialize in animals or animal products is expected to be greater than it was in 2023.
Since corn and soybeans accounted for the majority of cash receipts on Iowa farms in 2023 and are expected to decline nationally by 23% and 14%, respectively, in 2024, this could result in lower net cash revenue for the farming industry in regions like Iowa.
Nearly 2 million farms and ranches, including roughly 22,600 farms in Idaho, are included in the data utilized in the USDA ERS projections. According to Litkowski, the reports are used to determine the agricultural sector’s contributions to the U.S. economy and to advise lenders and policymakers.
Hurricanes and other natural disasters may have an impact on farm income.
Farmers are expected to require less catastrophe and supplemental aid in 2024, and their dairy margin payments will also decline. As a result, direct government subsidies to farmers are expected to drop by $1.7 billion from 2023.
Because most of the harvesting in the impacted areas had already been finished at the time of the hurricanes and payments had not yet been made, Litkowski said natural disasters like hurricanes Helene and Milton had not yet appeared in the data.
According to Litkowski, natural calamities have historically had an impact on farm income. Sometimes, understanding the effects simply takes time.
Additionally, USDA projects lower input costs overall in 2024, mainly for farmers’ feed fertilizers and insecticides. However, it is anticipated that other inputs, such as labor, mortgage rates, and the acquisition of animals and poultry, have gone up.
Without accounting for inflation, the median farm income for 2024 is predicted to rise to $100,634, about 3% more than that of 2023. After modestly declining over the previous three years, off-farm income—which accounts for the largest portion of income for the majority of on-farm families—is expected to rise in 2024.
Litkowski explained that half of all farms are residential farms, meaning that farming is not the owner’s primary activity. As a result, the median farm income usually seems to be negative.
When the agency releases its initial 2025 forecasts on February 6, the forecast will be adjusted once again.
Christina Lords, editor-in-chief of the Idaho Capital Sun, contributed to this article.
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