2024 farm profit forecast indicates downward trend

The U.S. Department of Agriculture’s Economic Research Service, Washington, D.C., has released its 2024 Farm Sector Income Forecast, indicating a downturn in farm sector income following record highs in 2022.  

“Farm families are suffering through the same economic hardships as all families in America,” says Zippy Duvall, American Farm Bureau Federation president. “High inflation is making the food farmers grow more expensive to produce and is cutting into the income farm families rely on to pay bills, provide an education for their children and reinvest in their community. We urge Congress to focus on bringing costs down and passing a new farm bill, both of which will help ensure farmers can continue meeting the needs of a growing nation.” 

The forecast reveals that net farm income is expected to decrease from $185.5 billion in 2022 to $116.1 billion in 2024, a significant reduction of 25.5% from the 2023 level. Similarly, net cash farm income is also projected to fall from $202.3 billion in 2022 to $121.7 billion in 2024. 

In terms of cash receipts, the total is anticipated to drop by 4.2% to $485.5 billion in 2024, with declines in both crop and animal product receipts. Government farm payments are forecasted to decrease by 15.9% to $10.2 billion in 2024, mainly due to lower supplemental and ad hoc disaster assistance. Production expenses are expected to rise by 3.8% to $455.1 billion in 2024, with notable increases in livestock/poultry purchases and labor expenses, while spending on fuels and oils is expected to decline. 

Farm sector equity is projected to increase by 4.7% to $3.74 trillion, with assets also increasing to $4.28 trillion in 2024. However, farm sector debt is expected to rise by 5.2% to $547.6 billion, slightly worsening the debt-to-asset ratio. Working capital is forecasted to decrease by 16.6% in comparison to 2023.