Elevated farm production expenses and weakening crop and livestock prices have negatively affected 2023 farm incomes, a trend expected to worsen in 2024. The Economic Research Service reveals that net farm income, a broad measure of farm profitability, is expected to fall by $42B, or 23% from 2022, to $141B. Cash receipts from the sales of crops and livestock are projected to fall by a combined $23B to $513B. Notedly, of the projected $23B decline in farm cash receipts, more than $20B are price-related whereas less than $4B are related to production declines.
Meanwhile, total farm production expenses are up $29B from 2022, and by over $100B since 2020, driven mostly by spikes in interest rates, fuel, labor, fertilizer and chemical costs. Congress’ recently passed extension of the 2018 farm bill should be accompanied by further investment in farm safety net and risk management tools, given forecasts. Said tools must involve advanced supply chain data analytics.