2023 Farm Income Forecast Raises Some Concerns for 2024

The other day, when the Agriculture Department came out with its new 2023 farm income forecast showing a projected 21% decline in net cash income for farmers this year, USDA chief economist Seth Meyer seemed to want to point out the positives in the report, pointing out that the $158 billion net cash number is down from last year’s record high, but it’s still above the long term average. And he said if you take together the net incomes from 2021 ‘22 and ‘23,

This is the three highest consecutive years in the last 50 years.

That’s a nice way to look at it. But Seth told me that he’s a little bit worried about what’s going to happen if 2024 brings farmers another cut in income.

I’m an economist and I’m a worrier. I always worry about these things.

And he gets paid to look into the future and he has to worry about it. So here is the long unedited list of worries from Seth Meyer.

When we look at the kind of the dynamics going forward, I guess what I’m gonna keep an eye out for how are we looking at commodity prices going forward, we look at across the board on commodity prices. With a few exceptions, like cattle, we see prices coming down, right and even cattle. We’ve seen some moves recently, at least in the short run of softening cattle prices after some record highs. So I do again continue to worry about margins that we’ll achieve on the farm. So what does net farm income looks like? In the next estimate we get in February, we’ll get the kind of the first look out and other year. What does it look like in terms of input prices? Again, not growing as fast as was anticipated in the last report, but still growing? We talked about softening commodity prices. Where are we at in terms of margins, and again, even what we attained for farm income, this in 23, what we’re estimating for farm income is down a lot from 2022, but it’s still really good and would be hard to maintain long run. So we might even expect a reversion to something smaller in terms of net farm income. You know, I might even just, from a momentum standpoint, anticipate some further declines. But what does that look like in 2024?

Well, we will get USDA’s first income forecast for 2024 on February 7, mark your new 2024 calendars.