The updated farm income forecast for 2023 is out from USDA and as you might imagine it’s predicting a drop. The new forecast includes information that wasn’t available during their last forecast in February according to Carrie Litowski, senior economist for the USDA, who says farm income in 2023 is taking a step back from last year.
“Cash farm income for calendar year 2023 is forecast to fall nearly 27 percent relative to 2022,” Litowski said. “Net farm income is forecast to fall 23 percent. One of the drivers behind this decline in farm income is cash receipts, which are a major component of farm income.”
Cash receipts will drop in 2023, and Litowski says it’s important to remember that the comparison to year-ago levels were in many cases record highs.
“Cash receipts from both crop and animal and animal product sales are expected to decrease, in total, by about four percent from the record high that they saw in 2022,” Litowski said. “Also contributing to the forecast decline in net income in 2023 are government payments and production expenses. Direct government payments are forecast to decrease by about 19 percent or almost $3 billion. Total government expenses are forecast to increase about seven percent or almost $30 billion.”
As far as the overall farm sector balance sheet forecast goes, Litowski highlighted more changes.
“On the farm sector balance sheet, farm sector assets, debt, and equity are all forecast to increase in 2023, with equity forecast to increase almost seven percent,” Litowski said. “When we simulate how these changes in cash receipts, government payments, and expenses might affect farm incomes on average, we forecast that average net cash farm income for farm businesses – so these are larger farms where the occupation of the operator is farming primarily – is forecast to decrease almost 20 percent to $87,300 in 2023. For those households that operate a farm, median total farm income is forecast to increase two-and-a-half percent to just a little over $98,000 in 2023.”
For more information, visit usda.gov.
