Farm Income Projected to Tumble

Net farm income in Nebraska in 2024 is projected to tumble to $7.7 billion according to a report by the Rural and Farm Finance Policy Analysis Center at the University of Missouri in collaboration with the Center for Agricultural Profitability at the University of Nebraska. The $1.58 billion decline would mark a 17% fall from 2023. Figure 1 shows a "waterfall" chart outlining the projected changes in net farm income between 2023 and 2024. Last year's income of $9.27 billion is on the left and changes projected to occur this year are shown moving to the right. A decline in crop receipts (-$1.64 billion) is expected to outweigh an increase in livestock receipts (+$1.16 billion). Corn receipts are projected to fall 17% while soybean receipts are expected to decline 22%. The two crops account for 97% of the state's crop receipts. In contrast, cattle receipts, 89% of the state's livestock receipts, are projected to increase $1.09 billion due to higher cattle prices. A $924 million decline in crop insurance indemnities and no change in government payments results in a projected decline in total farm receipts of $1.38 billion or 4%.

Production expenses are projected to rise $602 million led by the costs of purchased livestock, up $1.41 billion to a record $8.58 billion. Cash rents to non-operator landlords are expected to increase $76 million, but feed costs, fertilizer, pesticides, and fuels are expected to decline. The culmination is a projected net farm income for the year of $7.69 billion.

FIGURE 1. CHANGES IN NET FARM INCOME

Source: Plastina, A., Chinn, D., Lubben, B., Dennis, E., McClure, G., Parsons, J., Thompson, E., and C. Walters. "Fall 2024 Nebraska Farm Income Outlook." RaFF Report #12-2024, Division of Applied Social Sciences, University of Missouri - Columbia. October 17th, 2024.

Despite the drop, this year's farm income would be Nebraska's third highest on record if realized (Figure 2). But another decline is expected in 2025. The report projects income will slip to $7.44 billion because of lower crop receipts, government payments, and lower inventory values. Brad Lubben, an agricultural policy specialist with Nebraska Extension and a co-author of the report says, "While Nebraska farm income is expected to decline further in 2025, the state's diversified agricultural base, notably continued strength in its livestock sector, will continue to play a crucial role in mitigating the impacts of lower crop prices and production challenges." A net farm income exceeding $7 billion, though, would still put 2025 among the top six income years, far above 2017 and 2018 when it sunk to nearly $2 billion. More information on the projections can be found at: https://cap.unl.edu/farm-income.

FIGURE 2. NEBRASKA NET FARM INCOME

Source: 2000-2023 from the USDA, Economic Research Service; 2024 estimate from Universities of Nebraska and Missouri.