A recently released economic forecast by the United States Department of Agriculture predicts a significant $6.5 billion hit to farmers’ net incomes in 2024. When adjusted for inflation, the decline in profits is closer to $10.2 billion compared to 2023. Senior economist Carrie Litkowski highlighted the expected decline in farm incomes, largely due to a decrease in cash receipts from commodity sales, which are expected to drop by $9.8 billion or 2%.
The decline in profits is primarily driven by a sharp drop in the prices of corn, soybeans, and other commodity crops. Farm businesses in the Arkansas delta region are expected to see some of the largest income declines, with a 21% decrease projected. Despite reaching a high in 2022, farm incomes dropped by nearly 20% in 2023 and are expected to continue declining in 2024, though at a lower rate than initially projected.
The Department of Agriculture now forecasts a 4% decline in farm incomes, lower than the 24% decline projected in February. The improved outlook is attributed to an increase in animal product sales and decreases in production expenses. In the updated forecast, the Department of Agriculture expects a $17.8 billion increase in animal product sales, leading to smaller average income declines than previously anticipated.
Overall, farmers are facing significant income challenges in 2024 due to lower crop prices and decreased cash receipts, particularly in regions heavily reliant on commodity row crops. The Department of Agriculture is closely monitoring the situation and providing updated forecasts to guide farmers through this challenging period.
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Photo credit arktimes.com
