The Agriculture Department's latest Farm Income Forecast projects net farm income will fall this year amid higher production expenses, lower cash receipts and declining direct government payments.
USDA's Economic Research Service expects net farm income to drop to $151.1 billion in 2023, a 17.4% decrease from 2022 in nominal dollars (not adjusted for inflation). After adjusting for inflation, net farm income is expected to decrease by $37.9 billion, a drop of 20%.
The agency expects cash receipts from agricultural commodity sales will decline more than $25.2 billion in 2023 to $509.6 billion. Crop receipts are expected to decrease by $12.1 billion, while animal product returns are projected to drop by $13 billion.
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Expected decreases in supplemental and ad hoc disaster aid are forecast to cause a $3.5 billion dip in government payments for farmers, the report said. At the same time, total production expenses are projected to increase by $14.9 billion.
Agriculture Secretary Tom Vilsack said the expected drop in farm income “stands to reason” due to record incomes in 2022.
That year, Vilsack said, “was the best year in farming in the history of the United States and the last three years are the best three years of farm income for net cash farm income ever.”
Jacqui Fatka contributed to this report.
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