USDA projects 2022 calendar year net farm income up nearly $20 billion, or 13.8 percent from 2021. American Farm Bureau Federation Senior Economist Veronica Nigh explains what is driving the increase.
“Predominantly, this is a price play with 97 percent of that increase in cash receipts attributable to increases in price. Now, it’s not just all inflation either, because when you take out the inflation, farm income is forecast to increase by over seven percent. So, it’s mostly an increase in price. And you know, that’s despite the fact that production expenses are forecast to increase by almost 19 percent in 2023.”
Nigh says USDA projects increases in cash receipts for both crops and livestock.
“On the crops side, corn, beans and wheat are forecast to account for most of the net increase, but they’re expecting growth in receipts for other commodities as well including fruits, nuts, vegetables and melons. On the livestock side, they’re expecting an increase in receipts in every animal product.”
She adds farm sector equity is expected to increase as well.
“Farm sector equity is expected to increase by almost 11 percent in 2022. USDA is projecting that debt to asset levels for the sector will improve as well. I think that’s a little bit of an unexpected outcome given where we are with inflation today.”