USDA: Production Expenses Expected Lower In 2024

In a typical year, American farmers can expect to pay more than the year before for production expenses.  But the USDA's new farm income forecast is a bit of a surprise.  A forecast for lower production expenses.

ERS’ Spiro Stefano said prices that farmers are getting for many of their crops continue to fall.  The USDA is projecting a 12% drop in crop receipts, however, that is in part, being offset by drop in production expenses.  Stefano noted it’s not a big drop, around 1%.

“The production expenses have been revised downward for several inputs, feed and fertilizer," Stefano said.  "Pesticide expenses were all revised downward, as well as fuels and oils.”

Stefano added some expenses continue to increase, including labor, interest and the costs of buying livestock.  But, he pointed out when it comes to the health of the overall ag economy, equity is increasing.

“About 2.7%, this is driven by farmland values, building values and those farmland and buildings account for about 80% of farm assets," Stefano said.  "Debt has also increased, but at a slower rate and about 1.6%. So, on balance we see the debt-to-equity ratio falling, which is an improvement, and so is the debt-to-asset ratio that's falling.”

If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com