RICHMOND—Farm economists are painting a grim picture for American agriculture following release of the U.S. Department of Agriculture’s 2024 farm income forecast.

Net farm income is set to decline nearly 25% in two years, with substantial losses in crop receipts and continued pressure from rising production costs.

While livestock producers may see modest gains, the outlook for many crop farmers is increasingly uncertain, with global supply and demand imbalances impacting prices. Reduced government support and higher production expenses leave many farmers in a precarious financial position.

“This trend is very concerning,” said Tony Banks, senior assistant director of agriculture, development and innovation at Virginia Farm Bureau Federation. “It’s a very challenging time to be a farmer in Virginia.”

American Farm Bureau Federation reported that net farm income is forecast at $140 billion for 2024, marking a $6.5 billion decline from 2023. This follows a sharp 19.5% drop from 2022 to 2023. Inflation-adjusted figures indicate even greater financial strain.

A drop in receipts for grains and oilseeds largely results from global surplus and weaker market prices. In Virginia, the drop in net farm income for grain and soybean producers will likely be greater than the national average, Banks added.

“In both 2023 and 2024, local poultry and swine production cutbacks have not only lowered local grain and soybean prices relative to national prices, but traditional markets have been altered significantly leading to higher storage and transportation costs for farmers in many cases,” he said. “This year’s drought and storm damage across much of Virginia has only exacerbated their net farm income losses.”

Though 2022 was a record year for net farm income, 57% of farm operations still reported a financial loss, according to the Census of Agriculture.

“The fact that the majority of farms experienced losses in such a high-income year underscores the fragility of the farm economy,” said Daniel Munch, AFBF economist. “Without targeted policy changes, such as an updated safety net in a farm bill, farmers will struggle even more in the face of declining income and rising debt.”

Direct government payments that provide a critical safety net for farmers are expected to decrease by $1.8 billion in 2024.

Banks said farmers should consider any risk management program or tool available.

“If crop insurance is not available for a crop, livestock or dairy enterprise, farmers should consider risk coverage programs available through the Farm Service Agency,” he said. “Or consider price risk management strategies and instruments when marketing crops and livestock. Producers may still be able to find ways to lower their production input costs, at least in the short term.”

On the bright side, U.S. vegetable and melon receipts are expected to rise by $2.5 billion.

Media: Contact Banks at 804-290-1114 or Munch at 202-406-3729.