The farm sector profits are forecast to fall this year, but the outlook is not as bleak now as it was in February, that according to the latest data from USDA Economic Research Service. Carrie Litkowski is a senior economist and program leader in the Farm Economy Branch and breaks down the numbers.

”Specifically net cash farm income for calendar year 2024 is forecast to fall $12 billion or about 7% relative to 2023, and net farm income is forecast to fall $6.5 billion, or 4.4%.”

She says much of the decline in farm revenue follows cash receipts.

“Commodity sales are expected to decrease $9.8 billion or almost 2%. Also, direct government payments to farmers are forecast to decrease 1.8 billion or 15%.”

However, Litkowski says a drop in farm costs will offset those declines to a degree.

“Total production expenses, or the costs that farmers incur, are forecast to decrease $4.4 billion, or almost 1%. This decline is helping to moderate somewhat the overall decline in net income.”

Farm gate receipts will also take a hit in 2024.

“Average net cash farm income is forecast to decrease 8.9% in 2024, and lastly, for those households that operate a farm, median total household income is forecast to increase 1.7% to $99,683 in 2024.”

Litkowski highlights the difference between the February and September projections.

“We looked at the projections from the August was the which shows much stronger prices for most of the animal commodities, and we revised our forecast so that now we’re expecting animal and animal product receipts to increase. Now we increase almost $18 billion in fact. The other factor for the revision between the two releases are that in February, we were saying that production expenses would increase, but now we’re saying in total that production expenses are going to decrease.”

She says the difference is based on six months of data showing feed prices dropping.