Farm income falls despite record highs

By Blake Jackson

A new report by the University of Missouri predicts a decline in US farm income despite record highs in 2022. This is due to a combination of factors including lower commodity prices, trade issues, and rising production costs.

The report, titled "2024 U.S. Agricultural Market Outlook," examines trends in crop and livestock production and pricing. It also considers how factors like interest rates and biofuel production affect agriculture.

Nationally, net farm income is expected to fall from a record $162 billion in 2022 to $118.2 billion this year. The decline is particularly concerning for smaller producers who are already facing tight margins.

Prices for grain and oilseeds, like soybeans and corn, have dropped significantly. This is despite Missouri farmers receiving higher prices than the national average due to their proximity to processing facilities.

The decrease in market prices hasn't been matched by a decline in costs for fertilizer, fuel, and other supplies. This squeeze on profits is forcing many smaller farms out of business. Missouri has lost farms and farmland at a faster rate than the national average.

Livestock producers are facing challenges as well. The national cattle herd is at its lowest point since the 1960s, leading to higher beef prices. However, Missouri has lost cattle producers at an alarming rate over the past 25 years.

The report also highlights the increasing concentration of control in agriculture by large corporations. This trend, along with a lack of effective safety net programs, is blamed for many of the issues facing farmers today.

While the decline in commodity prices is expected to slow inflation in food costs, consumers shouldn't expect significant price drops at the grocery store. The report suggests that the farm level price makes up a small portion of the overall cost of food.

The FAPRI report acknowledges the need for changes in farm policy but highlights the difficulty due to the associated costs. Ultimately, the report offers valuable information to policymakers as they grapple with the challenges facing American agriculture.

Photo Credit: university-of-missouri