May 21, 2024

Farm income forecast

Purdue economists share outlook

Michael Langemeier

WEST LAFAYETTE, Ind. — Brady Brewer, host of Purdue Commercial AgCast, sat down with Purdue University agricultural economist Michael Langemeier to discuss the U.S. Department of Agriculture’s latest farm income forecast.

Net farm income is expected to decline by 25%, but remain near the long-run average.

“This decrease in net farm income represents a margin squeeze for most farmers, prompting a heightened focus on efficiency,” Brewer said.

“This entails farmers seeking more efficient inputs and technologies while potentially increasing their reliance on value-added services. Such services, aimed at helping better manage their farm or adding value in some capacity, are likely to gain greater appeal.”

Top Takeaways

Sharp decline in net farm income. The forecast reveals a significant 25.5% decrease in net farm income for 2024 compared to last year — a decline from $156 billion in 2023 to $116 billion in 2024. Gross cash farm income experiences a milder decrease at about 4%, but expenses are up 3.8%.

Return to historical averages. Despite the stark decline, it’s surprising to note the projected net farm income for 2024 aligns closely with the long-term historical averages. This suggests a return to a more typical economic landscape after several years of above-average performance.

Sector-specific impacts. The forecast also highlights varied impacts across different agricultural sectors. While some commodities like beef foresee minimal drops in receipts, others such as feed grains and oilseeds anticipate more significant declines.

Resilient farm balance sheets. U.S. farm balance sheets remain strong, reflecting robust asset values and steady liquidity. While debts have increased, asset values have increased at a faster rate, which has kept balance sheets strong.

A chart shows U.S. farm asset and debt values since 1973.

In A Nutshell

• U.S. net farm income is expected to decline from $156 billion in 2023 to $116 billion in 2024.

• Net farm income in 2024 is similar to the long-run average — $117.2 billion.

• The U.S. farm balance sheet is strong.

• Breakeven prices for corn and soybeans are expected to decline in 2024.

• Net farm income per acre is expected to decrease in 2024 and expected to be well below the long-run average since 2007.

Listen to the complete podcast at http://tinyurl.com/yjayndnm.

Erica Quinlan

Erica Quinlan

Field Editor