Mizzou economists are projecting that America’s net farm income is $137 billion – about $9 billion lower than last year. Senior Research Economist Bob Maltsbarger said that the decline is mostly due to lower crop revenue.
He projects a mixed outlook in Missouri’s agriculture economy, but he said it’s not all doom and gloom.
“We continue to have elevated costs to production for crops and ultimately lower costs for feed and fertilizers and pesticides outweigh kind of the increased expenses that we see for farm labor and some other farm inputs. But they still remain elevated above what we saw back before pre-pandemic,” he told Missourinet.
When adjusted for inflation, the projected decline in farm income is expected to be $67 billion dollars between 2022 and 2025, marking a 35% drop compared to previous levels.
“Largely because lower prices for grains, oils, seeds, cotton, and many of the other crops,” Maltsbarger said. “The contrast that you mentioned had to do because we actually are projecting higher prices for cattle to contribute to a $19 billion increase in livestock sector receipts for this year.”
Overall farm income is projected to decline further into next year with a slight recovery estimated for 2026. But Maltsbarger said that the economy is starting to even out.
“So, we’re seeing net farm income go from a record just a couple years ago to going easing off little by little and we’re getting closer and closer to that point that we saw back in the averages of 2015 to 2019,” he said.
Income declines are expected to continue next year as low production costs and high cattle prices will not offset the impact of lower crop prices. Food inflation, however, is expected to continue slowing down into next year.
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