Net farm income for 2024 is forecast to drop, according to the U.S. Department of Agriculture’s first farm income report for the year.
Net farm income will reach $116.1 billion, a decrease of $39.8 billion (25.5%) compared to 2023 in nominal dollars (not adjusted for inflation). This follows a forecast decrease of $29.7 billion (16%) from 2022 to $155.9 billion in 2023. After adjusting for inflation, net farm income is forecast to decrease $43.1 billion (27.1%). With this expected decline, net farm income in 2024 would be 1.7 percent below its 20-year average (2003–22) of $118.2 billion and 40.9% below the record high in 2022 in inflation-adjusted dollars.
“After the three highest consecutive years on record in 2021-2023, the first farm income forecast of 2024 indicates net farm income this year will return to prior levels,” said USDA Secretary Tom Vilsack, who added that recent records were due in part to U.S. farmers producing strong harvests and increasing commodity stocks while the U.S. economy recovered more quickly than the global economy from COVID-19.
“As a result, while we have rebuilt the global supply, we are seeing a decreased demand for U.S. commodities and commodity prices are coming down,” he said. “At the same time, while some production costs have come down, others, including labor, pesticides, and livestock purchases, have increased. This brings us to the slightly below historic levels for farm income forecasted today.”
Also contributing to lower forecast net income in 2024 are lower direct government payments and higher production expenses. Direct government payments are forecast to fall by $1.9 billion (15.9%) from 2023 to $10.2 billion in 2024. According to USDA, the decrease is expected largely because of lower supplemental and ad hoc disaster assistance in 2024 relative to 2023. Meanwhile, total production expenses, including operator dwelling expenses, are forecast to increase by $16.7 billion (3.8%) to $455.1 billion in 2024. Livestock/poultry purchases and labor expenses are expected to see the largest increases in 2024 compared to 2023.
Cash receipts from the sale of agricultural commodities are forecast to decrease by $21.2 billion (4.2%) from 2023 to $485.5 billion in 2024. Total crop receipts are expected to decrease by $16.7 billion (6.3%) from 2023, led by lower receipts for corn and soybeans. Total animal/animal product receipts are expected to decrease by $4.6 billion (1.9%), following declines in receipts for eggs, turkeys, cattle/calves, and milk.
Median total farm household income is forecast to have increased to $99,523 in 2023. That is a nominal increase of 4.3% (a 0.7% increase after inflation) between 2022 and 2023. In 2024, median total farm household income is expected to decrease to $99,445, a nominal decrease of 0.1% (a 2.2% drop after inflation) between 2023 and 2024.
Farm households typically receive income from farm and off-farm sources such as pensions, investment income, or wages and salary from an off-farm job. Median farm income earned by farm households is forecast to have improved in 2023 to -$542 from -$849 in 2022. It is forecast to decrease to -$1,198 in 2024. Many farm households primarily rely on off-farm income. Median off-farm income in 2023 is forecast at $84,224, an increase of 3.8% (0.2% after inflation) from $81,108 in 2022. Median off-farm income in 2024 is forecast to increase to $86,555, an increase of 2.8% from 2023 (0.6% after inflation). Since farm and off-farm income are not distributed identically for every farm, median total income will generally not equal the sum of median off-farm and median farm income.
