A recent update from the USDA has the farming community on edge. The Farm Income Forecast for 2023 indicates that farm incomes might dip lower than previously assumed.
Data reveals that the U.S. net farm income is expected to hover around $141 billion. This marks a hefty 23% decrease from the last year when it was at $183 billion. This is a steeper decline than the 16% initially predicted in February. Such a setback almost wipes out the financial improvements seen from 2021 to 2022, leading to an overall anticipated reduction in revenue.
Most areas within the agricultural sector might experience this decline. A big reason why net farm income is going down is because farmers are expected to make less money from selling livestock. The primary reason behind this is the drop in commodity prices, save for exceptions like turkey and cattle.
Livestock production might fall by about 5%, a significant $12 billion. On the crops' end, a 10% drop in corn sales is expected ($8.4 billion), along with an 8.6% decline in soybeans ($5.4 billion). This comes at a time when production expenses are steadily climbing, with 3% in feed, 5% in labor, and another 5% in marketing.
The interest-related expenses have skyrocketed, being almost 40% higher than last year. Considering these projections, it's crucial for farmers and ranchers to strategize for these decreased earnings. Adopting risk management strategies, especially those from federal crop insurance programs, can be a lifesaver.
Farmers who are not currently getting help from government programs should talk to agricultural organizations and lawmakers. The farm bill is being discussed right now, and this is a good time to ask for a plan that will help all farmers, no matter what they grow. Source : wisconsinagconnection