U.S. Department of Agriculture’s Economic Research Service released its annual Farm Sector Income Forecast report for 2023.
Farm sector income is forecast to fall in 2023 after reaching record highs in 2022. Net farm income, a broad measure of profits, reached $182.8 billion in calendar year 2022, increasing $42.4 billion (30.2%) from 2021. In 2023, net farm income is forecast to decrease by $31.8 billion (17.4%) from 2022 to $151.1 billion. Net cash farm income reached $200.4 billion in 2022, increasing $51.1 billion (34.2%) from 2021. It is forecast to decrease by $42.5 billion (21.2%) from 2022 to $157.9 billion in 2023.
In inflation-adjusted 2023 dollars, net farm income is forecast to decrease by $37.9 billion (20.0%) in 2023, and net cash farm income is forecast to decrease by $49.2 billion (23.8%) compared with the previous year. If realized, both income measures would remain above their 2003–2022 averages.
“Today’s farm income forecast for 2023 shows that, while net farm income is expected to drop below the 2022 record high, it is still one of the best years on record for the overall farm sector at $151.1 billion,” said USDA Secretary Tom Vilsack, noting that net cash farm income for 2023 is 15% above average for the last two decades, and farm income over the 2021-2023 period represents the highest level of farm income in the last 50 years.
“Even so, the data shows a majority of farm households rely on off-farm jobs to make ends meet, indicating that the income is not evenly distributed across the farm spectrum,” Vilsack said.
The change in net farm income this year, according to the USDA, is due to overall lower prices for farmers, higher production costs and higher interest rates, and declining government payments since their 2020 record levels.
“A bright spot for farmers is that some production costs, including feed, fertilizer and pesticides, have declined,” he said, adding that his agency is taking those factors into account as they work with Congress on the next Farm Bill into 2024.
