By Jamie Martin
At the start of 2024, federal agricultural economists predicted a tough year for American farmers, with a projected 25% decline in net farm income. However, a revised USDA forecast now expects a much smaller 4% decline for the year, keeping net farm income above the 20-year average.
Carrie Litkowski, a senior economist at USDA, noted that lower-than-expected costs for livestock feed and crop fertilizer helped improve farm income projections.
“Each (forecast) release, they got a little bit lower which helps farm income,” Litkowski said. The USDA had initially expected expenses to rise but instead saw nearly a 2% decline, particularly in feed, fertilizer, and pesticides.
In addition to lower input costs, dairy and livestock sales were a bright spot. Income from milk and egg sales increased by over 8%, with egg prices rising nearly 40% and milk prices improving throughout 2024. “Profits are back on the dairy side, and mailbox prices are strong again,” said Aaron Tigert, vice president of ag lending at Compeer Financial.
crop sales did not fare as well. Total crop cash receipts were expected to decline by over 9% due to lower crop prices, despite an increase in national sales. The USDA’s forecast highlights how fluctuations in commodity prices and weather conditions like dry spells have impacted crop yields.
Tigert suggests that while commodity prices are stabilizing, factors like global trade uncertainties and political shifts could affect markets in 2025. He advises farmers to lock in costs and forward contracts to secure profits.
Photo Credit: usda
Categories: National