USDA ERS - Farm Sector Income Forecast (2024)

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U.S. Department of Agriculture, Economic Research Service. (2024, September 5). 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 it fell in 2023. Net farm income, a broad measure of profits, reached $182.0 billion in calendar year 2022 in nominal dollars. After decreasing by $35.6 billion (19.5 percent) from 2022 to $146.5 billion in 2023, net farm income in 2024 is forecast to decrease $6.5 billion (4.4 percent) to $140.0 billion. Net cash farm income reached $210.1 billion in 2022. After decreasing by $44.0 billion (20.9 percent) from 2022 to $166.1 billion in 2023, net cash farm income is forecast to decrease by $12.0 billion (7.2 percent) to $154.1 billion in 2024.

In inflation-adjusted 2024 dollars, net farm income is forecast to decrease by $10.2 billion (6.8 percent) from 2023 to 2024, and net cash farm income is forecast to decrease by $16.3 billion (9.6 percent) compared with the previous year. If realized, both measures in 2024 would remain above their 2004–23 averages (in inflation-adjusted dollars).

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

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 $9.8 billion (1.9 percent) from 2023 to $516.5 billion in 2024 in nominal dollars. Total crop receipts are forecast to decrease by $27.7 billion (10.0 percent) from 2023 levels to $249.0 billion following lower receipts for corn and soybeans. Conversely, total animal/animal product receipts are projected to increase by $17.8 billion (7.1 percent) to $267.4 billion in 2024. Receipts for eggs, cattle/calves, milk, and broilers are forecast to rise relative to 2023.

• Direct Government farm payments are forecast at $10.4 billion in 2024, a $1.8 billion (15.1 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). This 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 $4.4 billion (1.0 percent) from 2023 to $457.5 billion in 2024. Feed, fertilizer (including lime and soil conditioners), and pesticide expenses are expected to see the largest declines 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 5.3 percent ($186.1 billion) from 2023 to $3.68 trillion in 2024 in nominal terms. Farm sector assets are forecast to increase 5.2 percent ($207.9 billion) to $4.22 trillion in 2024 following expected increases in the value of farm real estate assets. Farm sector debt is forecast to increase 4.2 percent ($21.8 billion) to $540.8 billion in 2024. Debt-to-asset levels for the sector are forecast to improve modestly from 12.93 percent in 2023 to 12.81 percent in 2024. Working capital is forecast to fall 4.2 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 $23.3 billion (4.3 percent) from 2023 to $516.5 billion in 2024. Crop cash receipts are projected to decline $34.7 billion (12.2 percent) during the year, while animal/animal product cash receipts are expected to increase by $11.4 billion (4.5 percent).

Crop Receipts Projected To Fall in 2024

Crop cash receipts are forecast at $249.0 billion in 2024, a decrease of $27.7 billion (10.0 percent) from 2023 in nominal terms. Combined receipts for corn and soybeans are forecast to fall $24.6 billion, but vegetable and melon receipts are expected to increase.

Cornreceipts are expected to fall by $16.0 billion (20.0 percent), as lower forecasted prices should outweigh higher quantities sold in 2024. Lower prices in 2024 should also outweigh growth in quantities sold forsoybeanreceipts, which are forecast to decrease by $8.6 billion (14.6 percent).Falling prices and quantities sold are expected to pull cottonreceipts $1.7 billion (23.6 percent) lower in 2024.Wheatreceipts are forecast to decrease $1.6 billion (12.3 percent), as lower prices will outweigh higher quantities sold. Receipts forhayare also expected to fall by $0.9 billion (8.9 percent).

Vegetable and meloncash receipts are expected to increase $2.5 billion (9.8 percent) in 2024 while receipts forfruits and nutsare expected to fall by $0.5 billion (1.9 percent) during the year.Ricereceipts are projected to grow by $0.3 billion (7.2 percent), while receipts forbarleyare forecast to decline $0.1 billion (13.0 percent).Receipts for sugarcane and sugarbeets are forecast to decline $0.7 billion (30.5 percent) and $1.0 billion (31.9 percent) respectively in 2024. Sorghumreceipts are also projected to fall $0.2 billion (12.7 percent).

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 $17.8 billion (7.1 percent in nominal terms) from 2023 to $267.4 billion in 2024. Chicken egg receipts are forecast to see the largest percentage increase among animal/animal product commodities.

Milkreceipts are expected to increase $4.3 billion (9.4 percent) in 2024, mainly due to higher prices. Cash receipts fromcattle and calvesare expected to increase $6.6 billion (6.5 percent), also due to higher prices. Projected growth in quantities sold should lead to an increase of $0.7 billion (2.7 percent) in hogreceipts during the year.

Cash receipts forchicken eggsare expected to increase $6.9 billion (38.7 percent) in 2024, due to higher prices. Rising prices and quantities sold are expected to drive broilerreceipts $1.8 billion (4.2 percent) during the year. However, lower prices and quantities sold are forecast forturkeysin 2024, resulting in a drop of $2.7 billion (41.5 percent) in receipts for that commodity.

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 decomposed into two separate effects: 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 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 $9.8 billion in 2024, with an estimated negative price effect of $19.1 billion, and a projected positive quantity effect of $7.9 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 $10.4 billion for 2024, a decrease of 15.1 percent ($1.8 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 assistancepayments in 2024 are forecast at $6.1 billion, a decrease of $1.0 billion (14.1 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 paymentsfrom the financial assistance programs of USDA's Farm Service Agency and Natural Resources Conservation Service (NRCS) are expected to be $4.0 billion in 2024, an increase of $401.9 million (11.0 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 theAgriculture Risk Coverage (ARC)andPrice Loss Coverage (PLC)programs are forecast to decline, with a decline in payments from both programs. The ARC program provides income support payments when actual crop revenue declines below a specified level. ARC payments are expected to be $123.3 million in 2024, a decrease of $147.1 million (54.4 percent) from $270.4 million in 2023. Despite the expected decrease in market prices, commodity prices are likely to remain above the levels needed to trigger significant ARC payments. The PLC program provides income support payments when the effective price of a covered commodity falls below its effective reference price. PLC payments in 2024 are expected to be $1.3 million, a decrease of $6.6 million (83.2 percent) from $7.9 million in 2023.

• TheDairy Margin Coverage Program (DMC)is forecast to make $100.1 million in payments in 2024, which is $1.1 billion lower than 2023. DMC payments were at a record high of $1.2 billion in 2023 due to lower milk prices.

See data table on Government payments.

Production Expenses Forecast To Decline Slightly in 2024

Farm sector production expenses, including expenses associated with operator dwellings, are forecast at $457.5 billion in 2024. The expenses are forecast to decrease by $4.4 billion (1.0 percent), compared with their 2023 level. When adjusted for inflation, production expenses are forecast to decrease by 3.4 percent from 2023 to 2024.

See data tables on production expenses.

Spending on feed, labor, and livestock/poultry purchases are expected to represent three of the largest categories of spending in 2024. Feed purchases, the largest single ex­pense category, are forecast at $70.2 billion in 2024, declining by $9.8 billion (12.3 percent) from 2023 level. However, labor expenses (including both cash labor expenses and noncash employee compensation) are forecast to rise by $3.4 billion (6.9 percent) to $52.2 billion in 2024, compared with 2023. Livestock and poultry purchases are projected to grow by $5.2 billion (12.0 percent) to $48.1 billion in 2024.

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

• Interest expenses (including expense for operator dwellings) are forecast to grow by $1.8 billion (6.3 percent above the 2023 value) to $30.3 billion. This increase reflects both higher total debt levels and higher interest rates in 2024.

• Fertilizer expenses (including lime and soil conditioner expenses) are projected to decline by $3.5 billion (9.7 percent below their 2023 value) to $32.4 billion. This decline is mostly due to reductions in fertilizer prices.

• Pesticide expenses are expected to decline by $2.3 billion (10.4 percent below their 2023 level) to $19.4 billion, mostly due to lower prices.

• Fuel and oil expenses are forecast to decline by $1.7 billion (9.6 percent) in 2024, to $15.9 billion, driven by energy price declines.