ERS: Net cash farm income falls 3.5 percent in 2024

The Agriculture Department’s Economic Research Service on Tuesday forecast that inflation-adjusted U.S. net cash farm income (NCFI), defined as gross cash income minus cash expenses, to decrease by $5.7 billion (3.5%) to $158.8 billion in 2024.

This would come after NCFI decreased $58.3 billion (26.2%) in 2023 from an all-time high of $222.9 billion in 2022.U.S. net farm income (NFI) is forecast to decrease by $9.5 billion (6.3%) to $140.7 billion in 2024. This reduction follows a drop in NFI of $42.8 billion (22.2%) in 2023 from an all-time high of $193.1 billion in 2022 (after adjusting for inflation).

ERS explained, “Net farm income is a broader measure of farm sector profitability that incorporates noncash items, including changes in inventories, economic depreciation, and gross imputed rental income. Despite these successive declines, if forecasts are realized, NCFI and NFI would remain above their 2004-23 averages in 2024. Among the drivers of decline in these income forecasts, cash receipts for farm commodities are projected to fall by $16.6 billion (3.1%) to $516.9 billion in 2024, primarily because of lower crop receipts. However, over the same period, a $19.2 billion (4.1%) reduction in production expenses is expected to moderate the overall decline.”

ERS provided details on its Farm Sector Income and Finances topic page. Agriculture Secretary Tom Vilsack defended the agriculture sector’s performance during the Biden administration.”

For the fourth year in a row, the American farm sector income forecast remains above the 20-year and 9-year average, indicating the strength and competitiveness of U.S. agriculture even in the face of severe weather events, global market disruptions and continuing recovery from COVID-19 since 2021, and significantly better than the figures during the previous administration, which implemented harmful tariffs that disrupted markets,” Vilsack said in a statement.

Vilsack continued, “Net cash farm income for 2024 is forecast at $158.8 billion, while net farm income is forecast at $140.7 billion. These figures are an upward revision of about $5 billion and $700 million higher than the previous 2024 forecast. Some positives in today’s report include stronger cash receipts for livestock and animal products, lower fertilizer, seed, pesticide, and feed costs, and growing equity in farm operations. However, we are reminded that farm income is not one size fits all, and ERS’ report offers important datapoints as Congress writes the next farm bill.

Regionally, the Heartland and Mississippi River regions are seeing steeper declines than other parts of the country, and specialty crop and row crop farmers will need steady domestic and foreign markets to recover declines in cash receipts. It will be critical that both Congress and USDA take care not to let reactionary trade and government support policies exacerbate the loss of small farms and ranches in the next several years, but rather that they take a targeted approach to policy that reflects the diversity of America’s agriculture sector, helps farmers sustain their operations in the near term and for the next generation, and makes it possible for fewer farm families to rely on off-farm jobs to make ends meet.” In a joint statement, House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., and Sen. John Boozman, R-Ark., ranking member on the Senate Agriculture Committee, said, “Today’s farm income update underscores what Agriculture Committee Republicans in the House and Senate have warned about for two years: America’s farmers and ranchers are in serious trouble, and the outlook remains grim. From 2023 to today, row crop producers alone have lost more than $50 billion, and stand to lose even more next year. Immediate action is required to stabilize the farm economy and prevent a crisis that will only become more costly to address over time.”

Reauthorizing a five-year farm bill with significant improvements to the safety net is critical to restore certainty to our producers. Equally urgent, Congress must provide substantial economic aid to help those hit hardest.

“America’s farmers and ranchers deserve better. It’s time for Congress to deliver on its promises and ensure the future of American agriculture.”

The American Farm Bureau Federation’s Market Intel service said in a report that the ERS forecast “confirms just how tough a year it’s been for American agriculture, with slightly revised projections offering little relief to farmers, who are losing nearly a quarter of their income in two years.”

-The Hagstrom Report