2024 Farm Sector Income Forecast

Summary Findings

Overall, farm cash receipts are forecast to decrease by $4.0 billion (0.8 percent) from 2023 to $516.9 billion in 2024 in nominal dollars. Total crop receipts are forecast to decrease by $25.0 billion (9.2 percent) from 2023 levels to $246.2 billion following lower receipts for corn and soybeans. Conversely, total animal/animal product receipts are projected to increase by $21.0 billion (8.4 percent) to $270.6 billion in 2024. Receipts for cattle/calves, eggs, milk, broilers, and hogs are forecast to rise relative to 2023.

Direct Government farm payments are forecast at $10.6 billion in 2024, a $1.7-billion (13.6 percent) decrease from 2023. Direct Government farm payments include Federal farm program payments paid directly to farmers and ranchers but exclude U.S. Department of Agriculture (USDA) loans and insurance indemnity payments made by the Federal Crop Insurance Corporation (FCIC). The forecast decline is largely because of lower Dairy Margin Coverage Program payments and supplemental and ad hoc disaster assistance to farmers and ranchers in 2024 compared with 2023.

Total production expenses, including those associated with operator dwellings, are forecast to decrease by $8.0 billion (1.7 percent) from 2023 to $453.9 billion in 2024. Spending on feed is expected to see the largest decline in 2024 while livestock/poultry purchases are expected to see the largest dollar increase relative to 2023.

Farm sector equity is expected to increase by 5.2 percent ($181.9 billion) from 2023 to $3.68 trillion in 2024 in nominal terms. Farm sector assets are forecast to increase 5.1 percent ($205.4 billion) to $4.22 trillion in 2024 following an expected increase in the value of farm real estate assets. Farm sector debt is forecast to increase 4.5 percent ($23.5 billion) to $542.5 billion in 2024. Debt-to-asset levels for the sector are forecast to improve modestly from 12.93 percent in 2023 to 12.86 percent in 2024. Working capital is forecast to fall 6.9 percent in 2024 relative to 2023.

Total Cash Receipts Forecast To Decline for Second Straight Year in 2024

Total inflation-adjusted cash receipts are forecast to fall $16.6 billion (3.1 percent) from 2023 to $516.9 billion in 2024. Crop cash receipts are projected to decline $31.6 billion (11.4 percent) during the year, although animal/animal product cash receipts are expected to increase by $15.0 billion (5.9 percent).

Crop Receipts Projected To Fall in 2024

Crop cash receipts are forecast at $246.2 billion in 2024, a decrease of $25.0 billion (9.2 percent) from 2023 in nominal terms. Combined receipts for corn and soybeans are forecast to fall $23.5 billion, however, vegetable and melon receipts are expected to increase.

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Corn receipts are expected to fall by $16.6 billion (20.8 percent), as lower forecasted prices should outweigh higher quantities sold in 2024. Lower prices in 2024 should also outweigh growth in quantities sold for soybean receipts, which are forecast to decrease by $6.9 billion (12.3 percent). Falling prices and quantities sold are expected to pull cotton receipts $1.9 billion (26.9 percent) lower in 2024. Wheat receipts are forecast to decrease $0.8 billion (7.0 percent), as lower prices will likely outweigh higher quantities sold. Rice receipts are projected to grow by $0.2 billion (4.5 percent), behind rising quantities sold. Receipts for hay are expected to decline by $0.8 billion (8.1 percent).

Vegetable and melon cash receipts are expected to increase by $1.7 billion (6.7 percent) in 2024 and receipts for fruits and nuts are expected to fall by $0.6 billion (2.1 percent) during the year. Receipts for sunflower are forecast to decline $0.3 billion (39.9 percent) in 2024.

See data on value of crop production (in the value added table) and crop cash receipts.

Growth in Animal/Animal Product Receipts Forecast in 2024

Total animal/animal product cash receipts are expected to increase $21.0 billion (8.4 percent in nominal terms) from 2023 to $270.6 billion in 2024. Chicken egg receipts are forecast to see the largest percentage increase among animal/animal product commodities.

Milk receipts are expected to increase $5.3 billion (11.5 percent) in 2024, mainly due to higher prices. Cash receipts from cattle and calves are expected to increase $7.3 billion (7.2 percent), also primarily due to higher prices. Growth in prices and quantities sold are likely to lead to an increase of $1.5 billion (5.7 percent) in hog receipts during the year.

Cash receipts for chicken eggs are projected to increase $7.0 billion (39.4 percent), due to rising prices in 2024. Rising prices and quantities sold are expected to drive broiler receipts $2.5 billion (5.9 percent) higher during the year. However, turkey receipts are forecast to drop $2.8 billion (43.3 percent) in 2024, following expected lower prices and quantities sold.

See data on value of animal/product production (in the value added table) and animal/product cash receipts.

Lower Prices Drive Cash Receipts Decline in 2024

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To better understand the factors underlying the forecast change in annual receipts from 2023 to 2024, the change was broken down into two effects: (1) a “price effect” projecting the change in cash receipts associated with holding the quantity sold constant at 2023 levels and allowing prices to change to forecast 2024 levels; and (2) a “quantity effect” holding prices constant from 2023 and quantities changing to forecast 2024 levels. In 2024, falling prices are projected to have negative effects on cash receipts, while rising quantities sold should have positive effects. Overall, cash receipts are forecast to decrease $4.0 billion in 2024, with an estimated negative price effect of $26.2 billion, and a projected positive quantity effect of $20.9 billion. In addition, a net increase of $1.3 billion in cash receipts is from forecasts for commodities for which price and quantity effects cannot be separately determined. Quantity effects on cash receipts are forecast to be positive for crops and animals/animal products. Price effects are forecast to be negative overall for crop cash receipts but are expected to be positive for animal/animal product receipts.

Direct Government Farm Payments Forecast To Decrease in 2024

Direct Government farm program payments are those made by the Federal Government directly to farmers and ranchers with no intermediaries. Typically, most direct payments to farmers and ranchers are administered by the USDA using the Farm Bill or related authorities. Direct payments can also come from supplemental programs authorized by the U.S. Congress. Government payments do not include Federal Crop Insurance Corporation (FCIC) indemnity payments (listed as a separate component of farm income) and USDA loans (listed as a liability in the farm sector’s balance sheet). Direct Government farm program payments are forecast at $10.6 billion for 2024, a decrease of 13.6 percent ($1.7 billion) from 2023 to 2024. This overall decrease reflects anticipated lower payments from the Dairy Margin Coverage (DMC) program and lower payments from supplemental and ad hoc disaster assistance, particularly from the Emergency Relief Program (ERP).

Supplemental and ad hoc disaster assistance payments in 2024 are forecast at $5.6 billion, a decrease of $1.5 billion (21.6 percent) from 2023, mostly because of lower expected payments from the Emergency Relief Program. Since 2020, supplemental and ad hoc disaster assistance has represented the largest category of direct Government payments.

Conservation payments from the financial assistance programs of USDA’s Farm Service Agency and Natural Resources Conservation Service (NRCS) are expected to be $4.4 billion in 2024, an increase of $806.9 million (22.2 percent) from the 2023 level. The increase in conservation payments is due to a marginal increase in Conservation Reserve Program enrolled acres, an increase in payments from NRCS programs, and some expected payments from the Inflation Reduction Act funds allocated for USDA’s conservation programs.

Farm bill commodity payments under the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs are forecast at $461.0 million (an increase of 70.5 percent relative to the previous year) and $1.9 million (a decrease of 75.8 percent), respectively. The ARC program provides income support payments when actual crop revenue declines below a specified level. The PLC program provides income support payments when the effective price of a covered commodity falls below its effective reference price.

The Dairy Margin Coverage Program (DMC) is forecast to make $80.9 million in payments in 2024, which is $1.1 billion lower than in 2023. DMC payments were at a record high of $1.2 billion in 2023 due to lower milk prices.

See data table on Government payments.

Production Expenses Forecast To Decline in 2024

Farm sector production expenses, including expenses associated with operator dwellings, are forecast at $453.9 billion in 2024. This is a decline of $8.0 billion (1.7 percent), compared with 2023 levels. When adjusted for inflation, production expenses are forecast to decrease by 4.1 percent from 2023 to 2024.

See data tables on production expenses.

Spending on feed, labor, and livestock/poultry purchases are expected to represent the three largest categories in 2024. Feed purchases, the largest single expense category, are forecast at $69.5 billion in 2024, declining by $10.5 billion (13.2 percent) from 2023. However, labor expenses (including both cash labor expenses and noncash employee compensation) are forecast to rise by $3.0 billion (6.1 percent) to $51.8 billion in 2024, compared with 2023. Livestock and poultry purchases are projected to grow by $4.4 billion (10.2 percent) to $47.4 billion in 2024. Note that no adjustments for inflation are made.

Several other expense categories are forecast to notably change in 2024, compared with their 2023 levels:

Fertilizer expenses (including lime and soil conditioner expenses) are projected to decline by $3.0 billion (8.4 percent below their 2023 value) to $32.8 billion. This decline is mostly due to reductions in fertilizer prices.
Pesticide expenses are expected to decline by $2.3 billion (10.7 percent below their 2023 level) to $19.3 billion, mostly due to lower prices.
Fuel and oil expenses are forecast to decline by $2.0 billion (11.3 percent) in 2024, to $15.6 billion, driven by declining energy prices.

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