Economic Tidbits

Drop in Farm Income Projected

Nebraska net farm income this year is projected to be $6.0 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. If accurate, income will decline $1.2 billion from projections for 2023 income, projected at $7.2 billion, a 9 percent increase over 2022 and the fourth highest on record (Figure 1). This year’s projected income, while off 17 percent from last year, would still be the sixth highest on record if it comes to fruition.

FIGURE 1. NEBRASKA NET FARM INCOME

Source: USDA Economic Research Service, 2000-2022; Projections for 2023-2024 from Rural and Farm Finance Policy Analysis Center at the University of Missouri and Center for Agricultural Profitability at the University of Nebraska-Lincoln.

Figure 2 shows a “waterfall” chart with details of projected changes in components of net farm income for 2023 and 2024. Receipts in 2023 are projected to rise due to higher livestock receipts (+$2.9 billion) which offset lower crop receipts (-$2.5 billion). Production expenses last year are projected to be higher ($2.4 billion). Other positive changes, largely growth in inventory, result in a projected $600 million increase in income compared to 2022. For 2024, crop receipts and livestock receipts are both projected to decline due to lower crop prices and fewer cattle sold. Production expenses are forecast to decline $1.0 billion, and the net is an expected income loss of $1.2 billion relative to 2023.

FIGURE 2. PROJECTED CHANGES IN NEBRASKA NET FARM INCOME, 2023 & 2024

The income projections are evidence of the volatility agricultural producers face when managing their operations. Fortunately, producers entered 2024 in a relatively strong financial position to better weather the projected income decline. Producers, though, might want to prepare for incomes at levels to this year’s for the foreseeable future. The projections suggest Nebraska farm income will average $6.3 billion for the next decade. More information on the Nebraska farm income outlook is available here. A webinar on the topic will be held on April 18. Registration for the webinar is accessible on the same page. 

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