USDA’s latest forecast for US farm income in 2024 paints a less severe decline than initially forecast. The agency now expects net farm income will fall just -4.4% from last year versus its February forecast for a whopping -25% decline However, the outlook varies widely depending on the commodity and, unfortunately, most row crops are not given a rosier forecast.
Falling prices are the main factor weighing down cash receipts for crops. Price effects are forecast to be negative overall for crops but are expected to be positive for animal/animal product receipts. Meanwhile, quantity effects on cash receipts are forecast to be positive for crops and animals/animal products. When grouped by commodity specialization, all farm businesses specializing in crops are forecast to see lower average net cash income in 2024 while those specializing in animal/animal products are forecast to see higher net cash farm income in 2024. Farms specializing in wheat are expected to see the largest percentage decline and those specializing in dairy are expected to see the largest percentage increase relative to 2023.
Overall net farm income, a broad measure of profits, is still forecast to fall in 2024 but at a slower rate than in 2023. After decreasing by -$35.6 billion (-19.5%) from 2022 to $146.5 billion in 2023, net farm income in 2024 is forecast to decrease -$6.5 billion (-4.4%) to $140.0 billion. Adjusting for inflation, net farm income is forecast to decrease -$10.2 billion (-6.8%) in 2024 relative to 2023. Despite this expected decline, net farm income in 2024 would be +15.2% above its 20-year average (2004–23) of $121.5 billion but -27.6% below the 2022 record high in inflation-adjusted dollars.
Net cash farm income is forecast to decrease by -$12.0 billion (-7.2%) to $154.1 billion in 2024. That compares to a decline of -$44 billion (nearly -21%) in 2023. Adjusted for inflation, net cash farm income is forecast to decrease by -$16.3 billion (-9.6%) compared with the previous year. The agency updates its farm income forecasts in February, September and December. The full September update is available HERE. Below are more details.
Crop cash receipts are forecast at $249.0 billion in 2024, a decrease of -$27.7 billion (-10.0%) from 2023 in nominal terms. Combined receipts for corn and soybeans are forecast to fall -$24.6 billion.
- Corn receipts are expected to fall by -$16.0 billion (-20.0%), as lower forecasted prices should outweigh higher quantities sold in 2024.
- Soybean receipts, which are forecast to decrease by -$8.6 billion (-14.6%).
- Wheat receipts are forecast to decrease -$1.6 billion (-12.3%), as lower prices will outweigh higher quantities sold.
- Cotton receipts are forecast to decrease -$1.7 billion (-23.6%) in 2024.
- Hay receipts are expected to fall by -$0.9 billion (-8.9%).
- Sugarcane and Sugarbeet receipts are forecast to decline -$0.7 billion (-30.5%) and -$1.0 billion (-31.9%) respectively in 2024.
- Sorghum receipts are projected to fall -$0.2 billion (-12.7%).
Animal and animal product cash receipts are the real bright spot in the USDA’s September update. Total animal/animal product cash receipts are expected to increase +$17.8 billion (+7.1% in nominal terms) from 2023 to $267.4 billion in 2024. Chicken egg receipts are forecast to see the largest percentage increase among animal/animal product commodities.
- Cattle and calves receipts are expected to increase +$6.6 billion (+6.5%), mainly due to higher prices.
- Hog receipts are expected to show an increase of +$0.7 billion (+2.7%) during the year.
- Milk receipts are expected to increase +$4.3 billion (+9.4%) in 2024, mainly due to higher prices.
- Broiler receipts are expected to be up +$1.8 billion (+4.2%) during the year. However, lower prices and quantities sold are forecast for turkeys in 2024, resulting in a drop of -$2.7 billion (-41.5%) in receipts for that commodity.
- Chicken egg receipts are expected to increase +$6.9 billion (+38.7%) in 2024, also due to higher prices.
Direct government farm program payments forecast at $10.4 billion for 2024, a decrease of -15.1% (-$1.8 billion) from 2023 to 2024. This overall decrease reflects anticipated lower payments from the Dairy Margin Coverage (DMC) program and lower payments from supplemental and ad hoc disaster assistance, particularly from the Emergency Relief Program (ERP).
- Agriculture Risk Coverage (ARC) payments are expected to be $123.3 million in 2024, a decrease of -$147.1 million (-54.4%) from $270.4 million in 2023. Despite the expected decrease in market prices, commodity prices are likely to remain above the levels needed to trigger significant ARC payments.
- Price Loss Coverage (PLC) payments in 2024 are expected to be $1.3 million, a decrease of $6.6 million (83.2 percent) from $7.9 million in 2023.
- Supplemental and ad hoc disaster assistance payments in 2024 are forecast at $6.1 billion, a decrease of -$1.0 billion (-14.1%) from 2023, mostly because of lower expected payments from the Emergency Relief Program.
- The Dairy Margin Coverage Program (DMC) is forecast to make $100.1 million in payments in 2024, which is -$1.1 billion lower than 2023. DMC payments were at a record high of $1.2 billion in 2023 due to lower milk prices.
- Conservation payments from the financial assistance programs of USDA’s Farm Service Agency and Natural Resources Conservation Service (NRCS) are expected to be $4.0 billion in 2024, an increase of +$401.9 million (+11.0%) from the 2023 level.
Production expenses in 2024 are forecast to decline slightly. Farm sector production expenses, including expenses associated with operator dwellings, are forecast at $457.5 billion in 2024, a decrease of -$4.4 billion (-1.0%) compared with their 2023 level. When adjusted for inflation, production expenses are forecast to decrease by -3.4% from 2023 to 2024.
- Feed purchases, the largest single expense category, are forecast at $70.2 billion in 2024, declining by -$9.8 billion (-12.3%) from 2023 level.
- Labor expenses (including both cash labor expenses and noncash employee compensation) are forecast to rise by +$3.4 billion (+6.9%) to $52.2 billion in 2024, compared with 2023.
- Interest expenses (including expense for operator dwellings) are forecast to grow by +$1.8 billion (+6.3% above the 2023 value) to $30.3 billion. This increase reflects both higher total debt levels and higher interest rates in 2024.
- Fertilizer expenses (including lime and soil conditioner expenses) are projected to decline by -$3.5 billion (-9.7% below their 2023 value) to $32.4 billion. This decline is mostly due to reductions in fertilizer prices.
- Pesticide expenses are expected to decline by -$2.3 billion (-10.4% below their 2023 level) to $19.4 billion, mostly due to lower prices.
- Fuel and oil expenses are forecast to decline by -$1.7 billion (-9.6%) in 2024, to $15.9 billion, driven by energy price declines.
