USDA Forecasts 23% Drop From 2022 Farm Income Levels

With your Southeast Regional Ag News, I am Haylie Shipp. This is the Ag Information Network.

Not great numbers, but numbers that still can change. That is what we’re seeing out of the latest USDA Farm Sector Income Forecast. Released at the end of August, the agency dropped net farm income expectations for 2023 lower than initial February estimates. They’re down 23%.

Daniel Munch, economist with the American Farm Bureau Federation…

“They forecasted continued increase in production expenses. They’re expected to increase 7% to $458B across the farm economy. Also a decline in most of your commodity crops and livestock prices.”

As I alluded to, this can change. In fact, we’ve seen an adjustment already this year…

“There’s still a lot of time left. Last year USDA originally forecasted a decline in net farm income of 5%. Then they changed it to an increase of 5% and then, by the end of the year, an increase of 14%. So these are still preliminary estimates. We still have a lot of harvest to get through.”

Based on 2023 debt and asset levels, USDA expects the debt-to-asset ratio to be 12.72% for 2023, which sits marginally below the prior five-year average (13.5%), meaning farmers are borrowing slightly less to finance the purchase of assets.