USDA’s latest Farm Income Forecast shows bad news for farmers. The Economic Research Service forecasts that farm income will decrease by 25 percent in 2024.
Danny Munch, an economist with the American Farm Bureau Federation, explains what the report says about the farm economy.
“It measures net farm income, a broad measure of farm profitability, and the latest report anticipates a decrease from 2023 numbers of $155 billion to $116 billion in 2024. That’s a 40 billion – or 25 percent drop year-over-year, and the largest recorded year-to-year dollar decrease in net farm income on record.”
Munch says there are two main drivers behind the income drop.
“A $21 billion expected decline in cash receipts, so what farmers are receiving price-wise for their crops and livestock, and a $17 billion increase in production expenses, reaching a record level of $455 billion spent on production expenses expected for 2024.
Munch says this report emphasizes the need for the new farm bill to be finished this year.
“Farmers utilize many programs within the farm bill, including ARC, PLC, and Dairy Margin Coverage, as well as the risk management options to help buffer against cost increases or volatile markets and increases in production expenses. So, when we see a decrease or an expected decrease in farm income of this magnitude, it’s really important that these safety nets are available to farmers to make sure that we have a secure domestic food supply.”
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Source: NAFB News Service