February 9, 2023

 

US farm income expected to decline in 2023

The US Department of Agriculture's (USDA) Economic Research Service (ERS) said after two strong years of growth, US farm income is expected to decline this year as commodity prices drop and expenses rise, Nebraska Examiner reported.

 

The ERS said inflation-adjusted net cash profits are expected to fall from a record high of US$195.3 billion in 2022 to US$150.3 billion in calendar year 2023, a 22.9% drop.

 

The ERS also projected net farm income to fall to US$136.9 billion, 18.2% below calendar year 2022 levels when adjusted for inflation. Since 1973, 2022 was the best year on record for inflation-adjusted net farm income.

 

They said farm income declines are expected to affect nearly all specialty operations and regions across the US.

 

Carrie Litkowski, senior economist for the ERS, said lower commodity prices are to blame for the decline in net farm cash income and net farm income levels. From calendar years 2022 to 2023, the ERS projected a 4% decrease in commodity cash receipts, equal to US$23.6 billion.

 

Litkowski also said total crop cash receipts are expected to fall by close to 6% beginning in 2022, with corn and soy being the most affected, but adds that cash receipts for both crops will remain relatively high.

 

The economist also discussed the effects of a US$5.4 billion cut in direct government payments to farmers in 2023, to US$10.8 billion. This figure reflects a projected 34.4% decrease in federal spending, which Litkowski attributed to lower payments for USDA pandemic and disaster relief programmes.

 

Total animal cash receipts are expected to fall 8% between calendar years 2022 and 2023. Milk is expected to experience the greatest dollar decline, with cash receipts falling by US$10 billion.

 

Litkowski said milk receipts will fall in 2023 due to lower milk prices.

 

From calendar years 2022 to 2023, dairy and hog farmers are expected to experience the greatest relative decline in animal cash receipts.

 

Cash receipts for eggs are also expected to fall 26% in 2023, compared to 2022.

 

Litkowski said that avian flu has caused egg prices to skyrocket over the last three years, and that the industry will begin to recover from the shocks of these outbreaks this year.

-      Nebraska Examiner