USDA’s Latest Farm Income Data Looks Brighter Than Early 2024 Numbers

USDA–Economic Research Service (ERS) has released updated projections for 2024 farm income, and though it’s still anticipated to decline, the outlook doesn’t look quite as dim as it did earlier this year.

The new numbers show net cash farm income for the 2024 calendar year will fall $12 billion, which is about 7% down from 2023, and net farm income will fall $6.5 billion or 4.4%. This is compared to projections released in February of this year that suggested net farm income would fall 26%.

“There are a lot of factors going on here, but to me, the primary ones are that the revisions reflect expectations that animal and animal product cash receipts will increase while production expenses will fall,” says USDA–ERS economist Carrie Litkowski. “This is largely due to the incorporation of new data.”

Litkowski shares the primary cause for the fall in 2024 farm income comes from commodity prices. Cash receipts or sales are expected to decrease by $27.7 billion. When combined with the inventory adjustment for crops, the value of crop production is forecast to decrease $25.6 billion from 2023. The largest decline comes from corn and soybeans, though wheat producers are expected to have a nearly 50% decline in average net cash farm income in 2024.

USDA ERS Row Crop Cash Receipt Projections 9-5-24 (USDA ERS)

But it’s not all bad news for crop farmers. Fertilizer expenses are expected to fall almost 10%.

Better News in Livestock

The outlook for livestock producers is more positive. Total animal and animal product receipts are expected to increase by $17.8 billion, or 7.1%, with the main driver coming from egg prices.

“Receipts for eggs are perhaps the biggest story here, in that they are forecast to see the largest increase in 2024 at 35%, or about $6 billion. Eggs alone account for a little more than half of the total increase in animal and animal product receipts,” Litkowski says. “Back in February, we did not anticipate that egg prices were going to increase as much as they have. That’s due to supply restraints we’re seeing related to the avian flu.”

Dairy farm businesses can expect to see the largest increase in average net farm income at 47.2%. Litkowski attributes this to higher milk receipts and lower expenses in 2024.

Farm businesses specializing in hogs are forecast to have an 11% increase but remain low relative to prior years. Beef farm businesses are projected at a 9.7% increase and poultry will see an 11.7% increase.

USDA ERS Livestock Cash Receipt Projections 9-5-24 (USDA ERS) These operations should see big savings in feed as well, with an anticipated decline of 12%.

Household Income Remains Unchanged

Total farm household income is projected to increase 1.7% in 2024 to $99,683. However, when inflation is taken into consideration, Litkowski says she categorizes it as “relatively unchanged”.

“1.7% is less than the expected rate of inflation in 2024, so it’s really more like a decline of 0.7% in real dollars,” she explains.

The Big Picture

While this year’s income projections may have producers concerned about their bottom line, USDA–ERS stresses the importance of looking at the numbers with the past 20 years in mind.

“The farm sector balance sheet is projected to remain strong,” Litkowski says. “Net farm income fell 22% from 2022 to 2023, and in 2024 net farm income is forecast to fall nearly 7%. Even with these expected declines, both crop and livestock sectors in 2024 are forecast to remain above their 20-year-average.”

EDITOR’S TAKE:

This latest data/forecast is very good news for agriculture across the country. Although some regions may benefit more or less than others, the big picture is now predicted to be much less devastating than earlier forecasts. With expenses expected to continue declining and land prices remaining strong, then both the net farm income and the farm balance sheet will be much better than expected back in February. This is especially true for livestock (beef and pork) and dairy producers. Assuming this forecast plays out at years end, farmers/ranchers will be looking to lower those tax bills. Many of them will be looking for that new truck or SUV. So be sure to keep farmers/ranchers at the top of your prospect list, put your inventory on AgTruckTrader.com® and let them know about all the exclusive rebates and discounts offered through AgPack®.