U.S. farm income will decline modestly in 2024 and then run at historically high levels in the near term, said the Food and Agricultural Policy Research Institute (FAPRI) think tank at the University of Missouri. Although well above average, net farm income of around $140 billion annually in coming years would be a step down from the record of $183 billion last year.
“Even after the projected decline, and considering the impacts of inflation, the projected levels of real net farm income are still well above pre-pandemic levels,” said FAPRI Director Pat Westhoff. “The projections are a reminder that 2022 was an anomaly. It should not be a surprise that income drops in 2023 and 2024 as some of those temporary factors fade.”
Net farm income was forecast to be $143 billion this year and to $140.4 billion in 2024 due to generally lower crop and livestock prices, according to FAPRI in a six-month update of its March baseline report. Projected net farm income is relatively stable in nominal terms from 2024 through 2027, as small changes in receipts and expenses largely offset each other.
With Congress working on a new farm bill, Westhoff said FAPRI’s detailed estimates of income, expenses, and the financial footing of agriculture probably would be “a useful benchmark when we try to evaluate how particular policy proposals might increase or decrease farm income.”
FAPRI’s estimate of farm income this year was slightly higher than USDA’s $141.3 billion, released at the end of August. The USDA will update its farm income estimate in November and make its first estimate of 2024 farm income in February.
“I would stress that these estimates depend on a very long set of assumptions to arrive at forecasts of income and expenses,” said Westhoff. “Even a modest change in farm receipts or production costs can change the picture dramatically.”
Farm income soared last year under the impetus of strong global demand and supply chain disruptions created by Russia’s invasion of Ukraine. Since 2021, when the world economy began to recover from the pandemic, net farm income has been extraordinarily high. The 10-year average from 2013-2022 is $101.3 billion annually.
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