09/19/2024 | News release | Distributed by Public on 09/19/2024 06:56
Sept. 19, 2024
Contact: Courtney Perrett,[email protected]
Photo by Kyle Spradley
COLUMBIA, Mo. - United States net farm income in 2024 was $137 billion, falling slightly below the United States Department of Agriculture 's (USDA) September forecast and $9 billion lower than the 2023 figure, according to the latest update of the annual U.S. farm income and consumer food price report by The Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. Further declines in income are projected in 2025 as some moderation in production expenses and high cattle prices are not enough to offset the impact of lower crop prices.
Pat Westhoff, FAPRI director, notes that these lower projections should be viewed with the appropriate context of historical farm finance conditions.
"When adjusted for inflation, we anticipate the decline in farm income between 2022 and 2025 to be $67 billion," said Westhoff. "However, despite a 35% drop, inflation-adjusted net farm income remains above the levels we experienced from 2015 to 2020."
FAPRI's projections indicate a $32 billion drop in 2024 crop receipts (due to lower prices for many grains, oilseeds and other field crops) while livestock receipts see a healthy $19 billion increase with higher cattle prices. Overall farm production expenses are expected to decline in 2024 after seeing increases in 2022 and 2023. Looking ahead, farm income is projected to decline further in 2025, with a modest recovery in 2026.
For the third straight year, payments under the price loss coverage (PLC) and agriculture risk coverage (ARC) programs will be below $1 billion in 2024. The fall in crop prices since 2022 sees payments under these programs rise to $5 billion in 2025 and 2026.
"From the consumer perspective, we're also anticipating a slowdown in food inflation," said Westhoff. "Our projections indicate a rate of 2.2% in 2024, dropping down to 1.6% in 2025."
The U.S. farm income and consumer food price report incorporates commodity supply, demand and price projections from the center's August baseline update, as well as USDA's Economic Research Service (ERS) farm income data, to generate estimates. Taken together, these reports form an overview of the agriculture and food sector and the key drivers of farm incomes:
These reports also provide projections related to government programs, biofuel production and use, land value rates and additional insights into consumer food prices.
"FAPRI's baseline projections implement plausible assumptions, given current conditions, to help agriculture stakeholders understand what they could expect in the next few years," Westhoff said. "Reports like the various baseline updates can be used as benchmarks to evaluate agricultural policy changes or how other economic drivers can impact agricultural markets and farm finance conditions."
Additional insights from the August baseline update and the farm income report href="https://fapri.missouri.edu/our-publications/">MU College of Agriculture, Food and Natural Resources
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