Net Farm Income in 2024 Forecast to Be Down 25% from Last Year

 On Feb. 7, USDA released the first insights into net farm income expectations for 2024. The latest report anticipates a decrease from 2023’s forecast of $155 billion to $116 billion – a drop of nearly $40 billion, or 25.5%, and the largest recorded year-to-year dollar decrease in net farm income. The decline marks the second consecutive drop since record-high farm income levels in 2022 ($185.5 billion). When adjusted for inflation, net farm income, a broad measure of farm profitability, is expected to decrease 27%, or $43 billion, from 2023. If realized, 2024 net farm income would be below the 20-year average (2003-2022) in inflation-adjusted dollars. A $21 billion expected drop in cash receipts for agricultural goods and a $17 billion expected increase in production expenses explain 95% of the forecast decline.

Direct government payments are estimated to decrease by $1.9 billion, or 16%, between 2023 and 2024 to slightly over $10 billion and about 9% of net farm income. This marks the fourth consecutive annual decrease in government payments for producers since the peak of the COVID-19 pandemic in 2020 and would represent the lowest value since 2014, even without adjusting for inflation..more