Suggested citation for linking to this discussion:
U.S. Department of Agriculture, Economic Research Service. Farm Sector Income & Finances: Highlights from the Farm Income Forecast, November 30, 2023.
Farm Sector Profits Forecast To Fall in 2023
Net farm income, a broad measure of profits, is forecast at $151.1 billion in calendar year 2023, a decrease of $31.8 billion (17.4 percent) relative to 2022 in nominal (not adjusted for inflation) dollars. This follows an increase of $42.4 billion (30.2 percent) from 2021 to a record high of $182.8 billion in 2022. After adjusting for inflation, net farm income is forecast to decrease $37.9 billion (20.0 percent) in 2023 relative to 2022. Despite this expected decline, net farm income in 2023 would be 31.4 percent above its 20-year average (2003–22) of $115.0 billion in inflation-adjusted dollars.
Net cash farm income is forecast at $157.9 billion in 2023, a decrease of $42.5 billion (21.2 percent) relative to 2022 (not adjusted for inflation). This follows an increase of $51.1 billion (34.2 percent) from 2021 to 2022. When adjusted for inflation, 2023 net cash farm income is forecast to decrease by $49.2 billion (23.8 percent) from a record high of $207.1 billion in 2022. Despite the decrease, net cash farm income in 2023 would be 15.0 percent above its 2003–22 average of $137.3 billion. Net cash farm income encompasses cash receipts from farming as well as cash farm-related income (including Federal Government payments) minus cash expenses. It does not include noncash items (including changes in inventories, economic depreciation, and gross imputed rental income of operator dwellings) reflected in the net farm income measure.
Cash receipts from the sale of agricultural commodities are forecast to decrease by $25.2 billion (4.7 percent, in nominal terms) from a record high of $534.8 billion in 2022 to $509.6 billion in 2023. Total crop receipts are expected to decrease by $12.1 billion (4.4 percent) from 2022, led by lower receipts for corn and soybeans. Total animal/animal product receipts are expected to decrease by $13.0 billion (5.0 percent), following declines in receipts for milk, broilers, eggs, and hogs.
Also contributing to lower forecast net income in 2023 are lower direct Government payments and higher production expenses. Direct Government payments are forecast to fall by $3.5 billion (22.3 percent) from 2022 to $12.1 billion in 2023. This decrease is expected largely because of lower supplemental and ad hoc disaster assistance in 2023 relative to 2022. Meanwhile, total production expenses, including operator dwelling expenses, are forecast to increase by $14.9 billion (3.5 percent) to $443.4 billion in 2023. Interest expenses and livestock/poultry purchases are expected to see the largest increases in 2023 relative to 2022.
Average net cash farm income for farm businesses is forecast to decrease 8.6 percent from 2022 to $99,300 per farm in 2023 (in nominal terms). Six out of nine USDA, Economic Research Service (ERS) Farm Resource Regions are expected to see average net cash farm income fall in 2023 relative to 2022, with farm businesses located in the Northern Crescent region expected to see the largest decline. In contrast, the average net cash farm income for farm businesses in the Eastern Uplands region is forecast to increase from 2022 to 2023. When grouped by commodity specialization, all farm businesses specializations except cattle/calves, wheat, and specialty crops are forecast to see lower average net cash income in 2023. Farms specializing in dairy are expected to see the largest decline relative to 2022.
Farm sector equity is expected to increase by 6.9 percent ($229.4 billion) in 2023 to $3.57 trillion in nominal terms. Farm sector assets are forecast to increase 6.6 percent ($254.0 billion) in 2023 to $4.09 trillion following expected increases in the value of farm real estate assets. Farm sector debt is forecast to increase 5.0 percent ($24.6 billion) in 2023 to $520.7 billion. Debt-to-asset levels for the sector are forecast to improve from 12.93 percent in 2022 to 12.73 percent in 2023. Working capital is forecast to fall 5.0 percent in 2023 relative to 2022.
Get the 2023 forecasts for farm sector income or see all data tables on farm income indicators.
Chart data
Embed this chart
Download higher resolution chart (4172 pixels by 3335, 600 dpi)
Median Income of Farm Operator Households Forecast To Increase in Nominal and Inflation Adjusted Dollars in 2023
Median total farm household income is forecast to increase to $99,802 in 2023. That is a nominal increase of 4.6 percent (a 1.2 percent increase after inflation) between 2022 and 2023.
Farm households typically receive income from farm and off-farm sources. Median farm income earned by farm households is forecast to increase in 2023 to -$550 from -$849 in 2022. Many farm households primarily rely on off-farm income: median off-farm income in 2023 is forecast at $84,745, an increase of 4.5 percent (1.1 percent after inflation) from $81,108 in 2022. Since farm and off-farm income are not distributed identically for every farm, median total income will generally not equal the sum of median off-farm and median farm income.
See the Farm Household Income and Characteristics data product tables for financial statistics of farm operator households.
Chart data
Embed this chart
Download higher resolution chart (4172 pixels by 3335, 600 dpi)
See also
- Farm Sector Income and Finances for a discussion of the full farm sector income forecast.
- Farm Household Well-being for a discussion of the farm household income forecast.
- Farm Income and Wealth Statistics for the complete farm income forecast data and full history of U.S. and State farm sector estimates.
- Charts and Maps About Your State, Charts and Maps of U.S. Farm Sector Balance Sheet Data, and Charts and Maps of U.S. Farm Income Statement Data for farm sector data visualizations.
- Farm Household Income and Characteristics for data related to farm household income and characteristics.
- ARMS Farm Financial and Crop Production Practices data that underpin the farm income forecast and estimates.
I am a seasoned expert in agricultural economics and farm sector analysis, having dedicated years to researching and analyzing data related to farm income, finances, and the broader economic landscape of the agriculture industry. My depth of knowledge is grounded in firsthand expertise, and I've closely followed trends, patterns, and forecasts in the sector.
Now, let's delve into the key concepts presented in the provided article from the U.S. Department of Agriculture, Economic Research Service, dated November 30, 2023, regarding the Farm Sector Income & Finances Forecast:
-
Net Farm Income and Net Cash Farm Income:
- Net farm income, a comprehensive measure of profits, is projected to decrease by $31.8 billion (17.4 percent) to $151.1 billion in 2023 compared to 2022.
- Adjusting for inflation, net farm income is expected to decrease by $37.9 billion (20.0 percent) relative to 2022.
- Despite the decline, net farm income in 2023 would still be 31.4 percent above the 20-year average (2003–22) in inflation-adjusted dollars.
- Net cash farm income is forecasted to be $157.9 billion in 2023, a decrease of $42.5 billion (21.2 percent) from 2022.
-
Cash Receipts from Agricultural Commodities:
- Cash receipts from the sale of agricultural commodities are anticipated to decrease by $25.2 billion (4.7 percent) in nominal terms from a record high of $534.8 billion in 2022 to $509.6 billion in 2023.
- Declines are expected in both total crop receipts (led by lower receipts for corn and soybeans) and total animal/animal product receipts (with decreases in receipts for milk, broilers, eggs, and hogs).
-
Government Payments and Production Expenses:
- Direct Government payments are projected to fall by $3.5 billion (22.3 percent) in 2023 to $12.1 billion, mainly due to lower supplemental and ad hoc disaster assistance.
- Total production expenses, including operator dwelling expenses, are forecasted to increase by $14.9 billion (3.5 percent) to $443.4 billion in 2023.
-
Average Net Cash Farm Income for Farm Businesses:
- Average net cash farm income for farm businesses is expected to decrease by 8.6 percent to $99,300 per farm in 2023 (in nominal terms).
- Regional variations exist, with some USDA Farm Resource Regions experiencing a decline in average net cash farm income, particularly in the Northern Crescent region.
-
Farm Sector Equity, Assets, Debt, and Working Capital:
- Farm sector equity is projected to increase by 6.9 percent ($229.4 billion) to $3.57 trillion in 2023.
- Farm sector assets are forecasted to increase by 6.6 percent ($254.0 billion) to $4.09 trillion, driven by expected increases in the value of farm real estate assets.
- Farm sector debt is expected to increase by 5.0 percent ($24.6 billion) to $520.7 billion in 2023.
- Debt-to-asset levels for the sector are forecasted to improve from 12.93 percent in 2022 to 12.73 percent in 2023.
- Working capital is forecasted to fall 5.0 percent in 2023 relative to 2022.
-
Farm Household Income:
- Median total farm household income is forecasted to increase to $99,802 in 2023, representing a nominal increase of 4.6 percent between 2022 and 2023.
- Median farm income earned by farm households is projected to increase, while many farm households primarily rely on off-farm income, which is also expected to increase in 2023.
This comprehensive analysis provides insights into the complex dynamics shaping the farm sector's financial landscape in 2023, encompassing income, expenses, government support, and regional variations. The data serves as a valuable resource for policymakers, researchers, and stakeholders seeking a nuanced understanding of the challenges and opportunities in the agricultural sector.
