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USDA Releases 2022 Farm Revenue Forecast

HENDERSON, Ky. (WFIE) – The U.S. Department of Agriculture’s Economic Research Service has released its Farm Sector Income and Finance: Farm Sector Income Forecasts.

A summary of the USDA forecast:

  • Net farm income, a large measure of profits, is projected to decline by $5.4 billion (4.5%) from 2021 to $113.7 billion in 2022. This projected increase follows a projected increase of 23, $9 billion (25.1%) in 2021. Cash net farm income is projected to increase by $1.9 billion (1.4%) to $136.1 billion in 2022, following an expected increase of $17.0 billion (14.5 percent); Net cash farm income is expected to decrease by $2.9 billion (2.1%). If realized, net farm income and net cash farm income in 2022 would remain above their 2001-2020 average (in real terms).
  • Overall, farm cash receipts are expected to increase by $29.3 billion (6.8%) to $461.9 billion in 2022 in nominal dollars. Total crop receipts are expected to increase $12.0 billion (5.1%) from 2021 levels to $248.6 billion. Combined soybean, corn, cotton and wheat receipts are expected to increase by $11.7 billion (8.2%) in 2022, accounting for nearly all of the projected growth in crop cash receipts. Total animal/animal product receipts are expected to increase by $17.4 billion (8.9%) to $213.3 billion following increased receipts for milk, cattle/calves and broiler chickens.
  • Government direct farm payments are projected to be $11.7 billion in 2022, down $15.5 billion (57.0%) from projected 2021 levels. Government farm direct payments includes federal agricultural program payments made directly to farmers and ranchers, but excludes loans from the United States Department of Agriculture (USDA) and insurance claim payments made by the Federal Crop Insurance Corporation. Much of this decline is due to lower additional and ad hoc disaster assistance to farmers and pastoralists related to the coronavirus (COVID-19) pandemic compared to 2021.
  • Total production spending, including that associated with operator accommodations, is expected to increase by $20.1 billion (5.1%) in 2022 to $411.6 billion. Nearly every spending category is expected to be higher in 2022, with purchases of feed and fertilizer, lime and soil amendments expected to see the largest dollar increases.
  • Equity in the agriculture sector is projected to increase by 1.0% in 2022 to $2.85 trillion in nominal terms, a decline of 2.5% after adjusting for inflation. Agriculture sector assets are expected to increase by 1.3% (nominal) in 2022 to reach $3.31 trillion following the increase in the value of agricultural real estate assets. When adjusted for inflation, total assets and farm real estate assets are expected to fall 2.2% and 2.5%, respectively. Agriculture sector debt is projected to rise 2.9% in 2022 to $467.4 billion in nominal terms, but decline 0.7% when adjusted for inflation. Sector debt levels are expected to decline from 13.89% in 2021 to 14.11% in 2022. Working capital is expected to fall by 3.3% in 2022.

Agriculture Officer Jessica Buckman says the prediction that farmers are spending more and earning less has local farmers worried.

“Farmers are…they’re a bit worried about spending the money on input costs that it takes to run a farm, so there’s a bit of insecurity there,” Buckman said. “That’s why we see people quitting farming or maybe downsizing their farms because they don’t know what the outcome will be. Everything is a little crazy right now.

Agriculture experts say Kentucky farmers have recently produced record amounts of corn and soybeans, so they receive more money when they sell their crops.

That’s still what the USDA expects to see this year, but rising planting costs may not net farmers a full wallet this crop.

“Because last year the farmers were a little better off,” Buckman said. “Decisions were easier to make, and this year with increased investment costs and high input costs, it’s harder for them to make decisions because they don’t want to get in a vineyard and not get enough profit out of it.”

Buckman encourages farmers to submit soil samples to their local agricultural agency so they can help you find the best products to buy for your crops and hopefully save you money.

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