Finding some optimism on 2023 farm incomes as USDA has revised upwards their most recent estimates. Danny Munch, an economist with the American Farm Bureau, says the picture is a little brighter than the August predictions:
“In the August reports, USDA forecasted that farm income from 2022 would drop 23 percent, a $41 billion drop from 2022. In this new November report, they adjusted that number 41 billion $31.8 billion, which is a 17 percent drop from 2022. In total, that would give you a total net farm income of $151 billion for 2023 compared to the $141 billion estimated previously in August.”
As far as key factors in the upward revisions:
“The most significant revisions are attributable to lower production expenses compared to what they estimated in August. There’s still a $14.9 billion expected increase in what farmers are paying for production expenses, which is about four percent. But that’s seven percent lower than what they forecasted in the August release.”
In regard to the specifics of the updated estimates:
“For all categories except fuels and oils, electricity and interest expenses, they adjusted their numbers downward. Things like fertilizer, pesticides, seeds, those all saw decreases from what they estimated that farmers will be paying. Electricity, fuels, oils, interest expenses all saw increases. So those are things farmers saw upward adjustments and are going to pay more for in 2023 than they estimated previously.”
It’s still a significant decrease from 2022, no doubt, driven mainly by the drop in commodity prices. On corn in Iowa, it’s over $1.50 per bushel from just a year ago.
