The Agriculture Department is forecasting that net farm income will decline sharply this year on lower revenue from crops and livestock and production expenses that remain historically high.
USDA’s Economic Research Service estimated Tuesday that net farm income will total $136.9 billion in 2023, a decline of 15.9% from 2022 but still 26.6% above the 20-year average for farm earnings when adjusted for inflation.
Another measure of farm earnings, net cash farm income, is estimated to fall 20.7% to $150.6 million this year following an increase of 27% in 2022.
Net cash farm income, which more closely tracks with farmers’ cash flow, is based on cash receipts from farming, plus government payments and other farm-related income, minus cash expenses. Net farm income also factors in depreciation and changes in inventory values.
USDA’s projected net cash farm income for this year would be 15.4% above the 20-year average when adjusted for inflation.
Cash receipts from the sale of agricultural commodities are expected to fall by $23.6 billion, or 4.3%, from 2022 after reaching a record high of $543.4 billion last year.
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Crop sales are expected to decline by 3.1% from last year, led by lower revenue for soybeans and corn. Receipts for corn are expected to fall from $89.4 billion in 2022 to $85.8 billion this year, while soybean sales are projected to drop from $63.7 billion to $58.5 billion. Revenue for cotton also is expected to be lower in 2023.
Revenue from livestock and poultry and their products is expected to decrease by 5.7%.
Meanwhile, cash expenses for farmers are expected to rise 3.3% in 2023 after skyrocketing more than 19% in 2022.
Farmers are expected to spend $42.2 billion on fertilizer this year, slightly less than the $43.7 billion they spent in 2022 but far more than the $32.4 billion in 2021.
USDA forecasts direct government payments will fall by $5.4 billion, or 34.4%, this year without the ad hoc supplemental and disaster payments that producers received in 2022.
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