Farm Sector Profits Forecast to Fall in 2023

ERS released the February Farm Income Forecast this week.  Net farm income, a broad measure of profits, is forecast at $136.9 billion for the year ahead, a decrease of $25.9 billion, or 15.9%, when compared to 2022.  After adjusting for inflation, net farm income is forecast to decrease $30.5 billion, or 18.2%, in 2023.  Despite the expected decline, net farm income in 2023 would be 26.6% above its 20-year average of $108.1 billion in inflation-adjusted dollars.  Net cash farm income is forecast at $150.6 billion in 2023, a decrease of $39.4 billion, or 20.7%, relative to 2022.

Cash receipts from the sale of agricultural commodities are forecast to decrease by $23.6 billion from a forecast record high of $543.4 billion in 2022 to $519.9 billion in 2023. Also contributing to the forecast of lower income in 2023 are lower direct Government payments and higher production expenses. Average net cash farm income for farm businesses is forecast to decrease 17.7% from 2022 to $92,400 per farm in 2023.

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