2024 Farm Sector Income Forecast

Courtesy of the USDA Economic Research Service

U.S. Department of Agriculture, Economic Research Service. (2024, December 3). Farm sector income & finances: Farm sector income forecast.

After reaching record highs in 2022, farm sector income is forecast to fall in 2024 but at a slower rate than in 2023. Net farm income, a broad measure of profits, reached $181.9 billion in calendar year 2022 in nominal dollars. After decreasing by $35.3 billion (19.4 percent) from 2022 to $146.7 billion in 2023, net farm income is forecast to decrease $6.0 billion (4.1 percent) to $140.7 billion in 2024. Net cash farm income reached $210.1 billion in 2022. After decreasing by $49.4 billion (23.5 percent) from 2022 to $160.7 billion in 2023, net cash farm income is forecast to decrease by $1.8 billion (1.1 percent) to $158.8 billion in 2024.

In inflation-adjusted 2024 dollars, net farm income is forecast to decrease by $9.5 billion (6.3 percent) from 2023 to 2024. Net cash farm income is forecast to decrease by $5.7 billion (3.5 percent) from 2023 to 2024. If realized, both measures in 2024 would remain above their 2004–23 averages (in inflation-adjusted dollars).

See all forecast and estimate data on farm income and wealth statistics or see a summary of the forecasts in the table U.S. farm sector financial indicators, 2017–2024F.

Note: In the text below, year-to-year changes in the major aggregate components of farm income are generally discussed in nominal dollars, although cases are noted where the change is reversed using inflation-adjusted dollars.

Summary Findings

Overall, farm cash receipts are forecast to decrease by $4.0 billion (0.8 percent) from 2023 to $516.9 billion in 2024 in nominal dollars. Total crop receipts are forecast to decrease by $25.0 billion (9.2 percent) from 2023 levels to $246.2 billion following lower receipts for corn and soybeans. Conversely, total animal/animal product receipts are projected to increase by $21.0 billion (8.4 percent) to $270.6 billion in 2024. Receipts for cattle/calves, eggs, milk, broilers, and hogs are forecast to rise relative to 2023.

Direct Government farm payments are forecast at $10.6 billion in 2024, a $1.7-billion (13.6 percent) decrease from 2023. Direct Government farm payments include Federal farm program payments paid directly to farmers and ranchers but exclude U.S. Department of Agriculture (USDA) loans and insurance indemnity payments made by the Federal Crop Insurance Corporation (FCIC). The forecast decline is largely because of lower Dairy Margin Coverage Program payments and supplemental and ad hoc disaster assistance to farmers and ranchers in 2024 compared with 2023.

Total production expenses, including those associated with operator dwellings, are forecast to decrease by $8.0 billion (1.7 percent) from 2023 to $453.9 billion in 2024. Spending on feed is expected to see the largest decline in 2024 while livestock/poultry purchases are expected to see the largest dollar increase relative to 2023.

Farm sector equity is expected to increase by 5.2 percent ($181.9 billion) from 2023 to $3.68 trillion in 2024 in nominal terms. Farm sector assets are forecast to increase 5.1 percent ($205.4 billion) to $4.22 trillion in 2024 following an expected increase in the value of farm real estate assets. Farm sector debt is forecast to increase 4.5 percent ($23.5 billion) to $542.5 billion in 2024. Debt-to-asset levels for the sector are forecast to improve modestly from 12.93 percent in 2023 to 12.86 percent in 2024. Working capital is forecast to fall 6.9 percent in 2024 relative to 2023.

Total Cash Receipts Forecast To Decline for Second Straight Year in 2024

Total inflation-adjusted cash receipts are forecast to fall $16.6 billion (3.1 percent) from 2023 to $516.9 billion in 2024. Crop cash receipts are projected to decline $31.6 billion (11.4 percent) during the year, although animal/animal product cash receipts are expected to increase by $15.0 billion (5.9 percent).

Crop Receipts Projected To Fall in 2024

Crop cash receipts are forecast at $246.2 billion in 2024, a decrease of $25.0 billion (9.2 percent) from 2023 in nominal terms. Combined receipts for corn and soybeans are forecast to fall $23.5 billion, however, vegetable and melon receipts are expected to increase.

Corn receipts are expected to fall by $16.6 billion (20.8 percent), as lower forecasted prices should outweigh higher quantities sold in 2024. Lower prices in 2024 should also outweigh growth in quantities sold for soybean receipts, which are forecast to decrease by $6.9 billion (12.3 percent). Falling prices and quantities sold are expected to pull cotton receipts $1.9 billion (26.9 percent) lower in 2024. Wheat receipts are forecast to decrease $0.8 billion (7.0 percent), as lower prices will likely outweigh higher quantities sold. Rice receipts are projected to grow by $0.2 billion (4.5 percent), behind rising quantities sold. Receipts for hay are expected to decline by $0.8 billion (8.1 percent).

Vegetable and melon cash receipts are expected to increase by $1.7 billion (6.7 percent) in 2024 and receipts for fruits and nuts are expected to fall by $0.6 billion (2.1 percent) during the year. Receipts for sunflower are forecast to decline $0.3 billion (39.9 percent) in 2024.

See data on value of crop production (in the value added table) and crop cash receipts.

Growth in Animal/Animal Product Receipts Forecast in 2024

Total animal/animal product cash receipts are expected to increase $21.0 billion (8.4 percent in nominal terms) from 2023 to $270.6 billion in 2024. Chicken egg receipts are forecast to see the largest percentage increase among animal/animal product commodities.

Milk receipts are expected to increase $5.3 billion (11.5 percent) in 2024, mainly due to higher prices. Cash receipts from cattle and calves are expected to increase $7.3 billion (7.2 percent), also primarily due to higher prices. Growth in prices and quantities sold are likely to lead to an increase of $1.5 billion (5.7 percent) in hog receipts during the year.

Cash receipts for chicken eggs are projected to increase $7.0 billion (39.4 percent), due to rising prices in 2024. Rising prices and quantities sold are expected to drive broiler receipts $2.5 billion (5.9 percent) higher during the year. However, turkey receipts are forecast to drop $2.8 billion (43.3 percent) in 2024, following expected lower prices and quantities sold.

See data on value of animal/product production (in the value added table) and animal/product cash receipts.

Lower Prices Drive Cash Receipts Decline in 2024

To better understand the factors underlying the forecast change in annual receipts from 2023 to 2024, the change was broken down into two effects: (1) a “price effect” projecting the change in cash receipts associated with holding the quantity sold constant at 2023 levels and allowing prices to change to forecast 2024 levels; and (2) a “quantity effect” holding prices constant from 2023 and quantities changing to forecast 2024 levels. In 2024, falling prices are projected to have negative effects on cash receipts, while rising quantities sold should have positive effects. Overall, cash receipts are forecast to decrease $4.0 billion in 2024, with an estimated negative price effect of $26.2 billion, and a projected positive quantity effect of $20.9 billion. In addition, a net increase of $1.3 billion in cash receipts is from forecasts for commodities for which price and quantity effects cannot be separately determined. Quantity effects on cash receipts are forecast to be positive for crops and animals/animal products. Price effects are forecast to be negative overall for crop cash receipts but are expected to be positive for animal/animal product receipts.

Direct Government Farm Payments Forecast To Decrease in 2024

Direct Government farm program payments are those made by the Federal Government directly to farmers and ranchers with no intermediaries. Typically, most direct payments to farmers and ranchers are administered by the USDA using the Farm Bill or related authorities. Direct payments can also come from supplemental programs authorized by the U.S. Congress. Government payments do not include Federal Crop Insurance Corporation (FCIC) indemnity payments (listed as a separate component of farm income) and USDA loans (listed as a liability in the farm sector’s balance sheet). Direct Government farm program payments are forecast at $10.6 billion for 2024, a decrease of 13.6 percent ($1.7 billion) from 2023 to 2024. This overall decrease reflects anticipated lower payments from the Dairy Margin Coverage (DMC) program and lower payments from supplemental and ad hoc disaster assistance, particularly from the Emergency Relief Program (ERP).

Supplemental and ad hoc disaster assistance payments in 2024 are forecast at $5.6 billion, a decrease of $1.5 billion (21.6 percent) from 2023, mostly because of lower expected payments from the Emergency Relief Program. Since 2020, supplemental and ad hoc disaster assistance has represented the largest category of direct Government payments.

Conservation payments from the financial assistance programs of USDA’s Farm Service Agency and Natural Resources Conservation Service (NRCS) are expected to be $4.4 billion in 2024, an increase of $806.9 million (22.2 percent) from the 2023 level. The increase in conservation payments is due to a marginal increase in Conservation Reserve Program enrolled acres, an increase in payments from NRCS programs, and some expected payments from the Inflation Reduction Act funds allocated for USDA’s conservation programs.

Farm bill commodity payments under the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs are forecast at $461.0 million (an increase of 70.5 percent relative to the previous year) and $1.9 million (a decrease of 75.8 percent), respectively. The ARC program provides income support payments when actual crop revenue declines below a specified level. The PLC program provides income support payments when the effective price of a covered commodity falls below its effective reference price.

The Dairy Margin Coverage Program (DMC) is forecast to make $80.9 million in payments in 2024, which is $1.1 billion lower than in 2023. DMC payments were at a record high of $1.2 billion in 2023 due to lower milk prices.

Production Expenses Forecast To Decline in 2024

Farm sector production expenses, including expenses associated with operator dwellings, are forecast at $453.9 billion in 2024. This is a decline of $8.0 billion (1.7 percent), compared with 2023 levels. When adjusted for inflation, production expenses are forecast to decrease by 4.1 percent from 2023 to 2024.

Spending on feed, labor, and livestock/poultry purchases are expected to represent the three largest categories in 2024. Feed purchases, the largest single expense category, are forecast at $69.5 billion in 2024, declining by $10.5 billion (13.2 percent) from 2023. However, labor expenses (including both cash labor expenses and noncash employee compensation) are forecast to rise by $3.0 billion (6.1 percent) to $51.8 billion in 2024, compared with 2023. Livestock and poultry purchases are projected to grow by $4.4 billion (10.2 percent) to $47.4 billion in 2024. Note that no adjustments for inflation are made.

Several other expense categories are forecast to notably change in 2024, compared with their 2023 levels:

Fertilizer expenses (including lime and soil conditioner expenses) are projected to decline by $3.0 billion (8.4 percent below their 2023 value) to $32.8 billion. This decline is mostly due to reductions in fertilizer prices.
Pesticide expenses are expected to decline by $2.3 billion (10.7 percent below their 2023 level) to $19.3 billion, mostly due to lower prices.
Fuel and oil expenses are forecast to decline by $2.0 billion (11.3 percent) in 2024, to $15.6 billion, driven by declining energy prices.

California Ag Today2024-12-05T14:06:53-08:00December 5th, 2024|

Better Year for Western Cotton Growers

Western Cotton Growers See Market Improvement

By Patrick Cavanaugh, Farm News Director

Cotton growers throughout California and the West fared better this year compared to last year in terms of prices and exports, as reported at the Calcot, Ltd. 89th Annual Meeting last week in Tempe, Arizona. Jarral Neeper president and CEO of the Bakersfield-based Calcot, Ltd., the cotton marketing cooperative representing growers in California, Arizona, New Mexico, and Texas, announced, “Last year we produced about 13M bales. We should be a hair over 16M this year.”

California Cotton, Merced County

Neeper estimated, “We’re going to go from about 10.2 million bales in exports to 11.5 million based on a review of our historical shares of the marketplace and the world, the foreign production/consumption gap, our historical shares of filling that gap, and how much we should export.”

“One year ago at this time, cotton prices were at a very low $0.61 per pound,” said Neeper. “The market eventually fell. Prices rallied a little bit, and then fell down to $0.55. Then, the last month of the crop year, we had this unforeseen $0.10 rally—almost $0.12 rally.

In cotton marketing where there are highs and lows, Neeper acknowledged, you can’t always sell high; you have to sell when you can. “As a cooperative, in order to make progress payments to your membership, you do have to sell cotton and turn it into cash.”

“The cotton futures look good,” Neeper said, “even better for the coming year. We’re sitting at roughly $0.70 a pound, about ten cents higher than a year ago. And, generally, California cotton growers tend to get a $0.05 to $0.10 premium per pound because of our growing additions and high quality lint.”

Neeper believes the future of Calcot, Ltd. is “terrific.” He added, “89 years and still going strong; we’re looking for another 89 years.”

California Ag Today2016-10-05T13:14:34-07:00October 5th, 2016|

USDA, Microsoft Innovation Challenge Winners

Open Data from USDA, Microsoft Cloud Technology Strengthen Food Supply Through “Innovation Challenge” Winners

Agriculture Secretary Tom Vilsack and Microsoft officials announced the winners of the USDA, Microsoft Innovation Challenge late last month in which contestants used USDA agriculture production open data to develop online tools that can help make the American food supply more resilient in the face of climate change.

“In yet another example of how public and private resources can be leveraged together to address significant global concerns, the winners of the USDA-Microsoft Innovation Challenge have used open government data to create an impressive array of innovative tools to help food producers and our communities prepare for the impacts of climate change and ensure our nation’s ability to provide plentiful, affordable food,” said Agriculture Secretary Tom Vilsack. “For more than 100 years, USDA has compiled data on the farm economy, production, and the health of crops around the country, and it is exciting to see such modern, useful tools spring from these information sources.”

The Challenge was created in support of the President’s Climate Data Initiative, which aims to harness climate data in ways that will increase the resilience of America’s food system. USDA provided contestants with more than 100 years of crop and climate data through Microsoft Azure, Microsoft’s cloud computing platform.

“Combining the advantages of cloud computing resources with the government’s desire to provide open access to public data is likely to transform scientific research and business innovation,” said Dr. Daron G. Green, deputy managing director of Microsoft Research. “Microsoft’s partnership with the USDA evidences how public-private partnership can stimulate new applications, explore novel scenarios and, in this case, work towards a more resilient and sustainable food production.”

A total of $63,000 in cash and prizes were awarded, with winners selected from more than 346 registrants and 33 submissions from around the world.

The award recipients and their projects, are:

Grand Prize, Open Source Application Award, and Best Visualization in Time or Space Award recipient: Farm Plenty, submitted by George Lee of San Francisco, Calif. This application allows farmers to analyze USDA data about crops grown within five kilometers of their farms to make informed decisions about their own crop choices.

Second Prize and Open Source Application Award recipient: Green Pastures, submitted by Khyati Majmudar of Mumbai, India. This comprehensive dashboard interface allows a farmer to visualize production, economic, livestock, and commodity data from NASS, ERS, ARMS, and other sources at scales from national to local, including information on farmers’ markets.

Third Prize recipient: What’s Local, submitted by Benjamin Wellington of Landscape Metrics LLC in Brooklyn, N.Y. This tool analyzes the resources that are required to produce agricultural outputs by using data from the Census of Agriculture in a way that allows urban population centers to connect with farmers in their area.

Honorable Mention: Open Source Application Award, and Best Student-Made Award recipient: Farm Profit Calculator, submitted by Fernando Napier and Matt Pedersen of Lincoln, Neb. Farmers can use this mobile phone application to compare their input costs (fertilizer, seed, fuel, etc.) to regional averages, and find financial efficiencies where their costs are above the norm.

Honorable Mention recipient: Croptrends, submitted by Chaiyawut Lertvichaivoravit and Ta Chiraphadhanakul of Thousand Eyes in San Francisco. This useful tool can be used for viewing spatial and temporal trends in crop production and yield by county for the entire United States by using NASS data.

Popular Choice Award recipient: VAIS, submitted by Ken Moini of Thallo Tech in Nashville, Tenn. This tool uses NASS data for the entire United States to provide a unique approach to visualizing crowd-sourced pricing data.

Large Organization Recognition Award recipient: Farmed, submitted by Bryan Tower of Applied Technical Systems in Silverdale, Wash. This tool allows farmers to view crop conditions in their area by using VegScape data from NASS combined with local weather data.

USDA is an active founding member of the Global Data Partnership through the memberships of both the U.S. Government Open Data and the Global Open Data for Agriculture and Nutrition (GODAN) initiatives. USDA is helping pave the way for coordinating global efforts to make agriculture and nutrition data open. USDA’s Open Data Catalog is the authoritative source of publicly available USDA data.

Since 2009, USDA has invested in and advanced innovative and transformative initiatives to solve societal challenges and ensure the long-term viability of agriculture. USDA’s integrated research, education, and extension programs, supporting the best and brightest scientists and extension personnel, have resulted user-inspired, groundbreaking discoveries that are combating childhood obesity, improving and sustaining rural economic growth, addressing water availability issues, increasing food production, finding new sources of energy, mitigating climate variability, and ensuring food safety. To learn more about USDA’s impact on agricultural science, visit www.usda.gov/results.

California Ag Today2016-05-31T19:24:13-07:00February 2nd, 2016|