Economic Activity Driving Farm Profits Even Higher

David Widmar with Agricultural Economic Insights says that while net farm income this year appears similar to last, there are some radical differences.

Widmar explained that 2021 and this year are the second and third strongest years on record for net farm income. “The economic activity of the farm sector has picked up significantly from that revenue component and it has offset the higher production costs and the big decline in government payments,” he says.

Government payments to producers this year are $15 billion less than last by his calculations, which Widmar says has been offset by increased crop (+$8 billion) and livestock (+$43.5 billion) values.

“For producers, this is one of the strongest years in terms of farm profitability that they’re going to see throughout their careers,” Widmar adds.  “This is going to help offset some of the challenges, uncertainties, and stresses that we’re facing from the broader economy.”

According to Widmar, expenses are currently forecast 13 percent higher than in 2021 and likely to remain elevated for the next growing season.

EDITOR’S TAKE:

In case there was any doubt about why we continue to say “farmers/ranchers are going to be your best customers going forward,” perhaps Mr. Widmar’s statement in bold above will provide the answer. It is incredible that despite higher input costs this year, profitability is expected to be “one of the strongest…they’re going to see throughout their careers!” So, if you have any hesitation or doubt about embracing agriculture as a primary sales target, you should ask yourself, why? It’s evident that now is a great time to let farmers and ranchers know about your amazing parts and service departments. It is also the perfect time to put your new and qualified used trucks on AgTruckTrader.com. Also, let’s remember to inform them about AgPack® to help offset their fears about rising input costs in 2023. Do it now!