Commodities and Futures News

US farm incomes to fall sharply in 2024 as crop prices plunge -USDA

2024.02.07 14:57


© Reuters. FILE PHOTO: Corn crops are seen being harvested from inside a farmer’s mix in Eldon, Iowa U.S. October 5, 2019. REUTERS/Kia Johnson//File Photo

By P.J. Huffstutter

CHICAGO (Reuters) – U.S. farm incomes are forecast to fall sharply for a second consecutive yr, as direct authorities funds shrink, manufacturing prices surge and rising provides of grains and oilseeds ship crop prices plunging to multi-year lows, the U.S. Department of Agriculture reported on Wednesday.

Declining revenue could lead on to a ripple impact throughout the agricultural economic system in a presidential election yr, as producers turn into extra cautious about making massive asset purchases such as new equipment or land.

Net farm revenue – which is a broad measure of profitability in the agricultural economic system, in accordance to the company – is forecast to hit $116.1 billion in 2024 in nominal {dollars}, down 25.5% or almost $40 billion from a yr earlier.

This follows a virtually $30 billion drop in web farm revenue in 2023, down from a report excessive in 2022, in accordance to the company’s newest knowledge.

When adjusted for inflation, web farm revenue in 2024 is forecast to fall by $43.1 billion, or 27.1%, in contrast with a yr earlier.

As incomes fall, manufacturing bills are rising, as are producers’ whole farm money owed. These are forecast to have jumped 5% between 2022 and 2023, and estimated to improve one other 5.2% in 2024, in accordance to USDA knowledge.

Total bills, together with operator dwelling bills, are seen 3.8% larger in 2024 over 2023. Livestock and poultry purchases, and labor bills are anticipated to see the biggest will increase in 2024, in contrast to the earlier interval, USDA mentioned.

U.S. Senator John Boozman (R-Ark.), rating member of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, mentioned the newest knowledge spotlight the necessity for bolstering help packages in the Farm Bill.

“Our current farm safety net is not equipped to handle the challenges our farmers are facing,” he mentioned in a press release.

Direct authorities funds are forecast to fall by 15.9% in 2024, to $10.2 billion, largely due to decrease supplemental program funds and advert hoc catastrophe help packages.

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