News

2023 net farm income down nearly 16%

USDA is forecasting net farm income to decline in 2023 after three consecutive years of growth.

Carrie Litkowski is a senior economist for the Economic Research Service.

“For crops, lower prices are expected to outweigh higher quantities sold and for livestock, both lower prices and lower quantities sold are expected to lower cash receipts,” she explains.

Lower prices are expected to pressure corn and soybean cash receipts, while increased movement could help wheat receipts, but, “They’re not going to increase enough to offset lower government payments, and in particular, higher production expenses,” she says.

However, the 2023 forecast for soybean cash receipts would still be the second highest on record and the corn forecast is expected to be the third highest.

Receipts for cattle are expected to be even, while hogs, broilers, shell eggs, and dairy are all projected to be lower. 

“Dairy farm businesses are forecast to see the largest decrease in average cash net farm income in 2023, at about 40 percent, and this is after a large forecast increase in 2022,” she says.

Interest expenses, livestock and poultry purchases along with labor make up the largest increases in input costs while fertilizer, feed, and net rent costs are expected to decline.

Litkowski says while net farm income is projected lower, farmer equity is likely to rise as farm sector assets, like real estate, are expected to rise.

The next income forecast will be released at the end of August.