Farmers across the country are set to make less money this year, marking an end to a record-breaking streak, according to the U.S. Department of Agriculture. The 2024 Farm Sector Income Forecast showed net farm income — profits after operating expenses — is expected to decrease 25.5% to $116 billion, compared to $155.9 billion in 2023.
Specifically, farm cash receipts are set to decrease by 4.2% from 2023; total crop receipts are expected to decrease by 6.3%; total animal/animal product receipts are projected to drop 1.9%; and receipts for eggs, turkeys, cattle/calves and milk are also forecast to dip relative to 2023.
“After the three highest consecutive years on record in 2021-2023, the first farm income forecast of 2024 indicates net farm income this year will return to prior levels,” Agriculture Secretary Tom Vilsack said in a statement. “While some production costs have come down, others, including labor, pesticides, and livestock purchases, have increased. This brings us to the slightly below historic levels for farm income forecasted today.”
Some of the reasons for the decrease, according to the USDA, include lower commodity prices, lower direct government payments and higher production expenses.
The report says commodity prices are expected to decrease by $21.2 billion from 2023 to 2024. Both crop and animal product sales are expected to decrease for corn, soybeans, eggs, turkeys, cattle and milk.
The USDA forecasts total production expenses will increase 3.8% year over year to $455 billion in 2024. Livestock and poultry purchases, as well as labor expenses, are projected to increase the most. The agency said spending on fuels/oils is set to decline compared to 2023.
Inflation is still elevated. The consumer price index, generally accepted as the inflation rate, sat at 3.4% in December. While much of the inflation is due to shelter, electricity and gas became more expensive, while prices for transportation services rose 9.7% year over year.
AJ Wormuth, owner of Half Full Dairy in Central New York, told Spectrum News 1 that prices for everything have increased — except milk. The local New York news outlet calculated that the decline in projected profits represents an average of $72,000 for every farm in the U.S.
Also contributing to dented farm profits are direct government farm payments, which the USDA said are set to drop by $1.9 billion in 2024, compared to the previous year. That’s largely due to less supplemental and ad hoc disaster assistance, according to the agency.
“With government supplemental program payments, such as the Emergency Relief Program, decreasing it’s clear that farmers are in a tough spot. The cost of doing business as a farmer is outpacing consumer appetite for spending,” Ali Cox, CEO and founder of agriculture-focused marketing agency Noble West, told Agriculture Dive.
The USDA’s forecast comes as congressional negotiations over the farm bill continue. House Democrats advocate funding for food assistance and climate programs, as Republicans aim to reallocate money from the Inflation Reduction Act to other farm priorities.