USDA forecasts net farm income will decline $41.7 billion (22.8%) from last year’s record to $141.3 billion in 2023, though that’s up from its February outlook of $136.9 billion. After adjusting for inflation, net farm income is forecast to decrease $48.0 billion (25.4%) relative to 2022.
USDA forecasts net cash farm income, which incorporates cash receipts from farming as well as cash farm-related income (including government payments) minus cash expenses, will decline $53.6 billion (26.5%) to $148.6 billion, down $2.0 billion from its prior outlook. When adjusted for inflation, 2023 net cash farm income is forecast to decrease $60.5 billion (28.9%) from a record high of $209.1 billion in 2022.
Cash receipts from the sale of agricultural commodities are forecast to decrease by $23.0 billion (4.3%) from a record high of $536.6 billion in 2022 to $513.6 billion. Total crop receipts are expected to decrease by $11.2 billion (4.0%) from 2022, led by lower receipts for corn and soybeans. Total animal/animal product receipts are expected to decrease by $11.9 billion (4.6%), following declines in receipts for milk, broilers, eggs and hogs.
Also contributing to lower forecast farm income in 2023 are reduced direct government payments and higher production expenses. Direct government payments are forecast to fall by $2.9 billion (19.0%) from 2022 to $12.6 billion. This decrease is expected largely because of lower supplemental and ad hoc disaster assistance in 2023 relative to last year. Meanwhile, total production expenses, including operator dwelling expenses, are forecast to increase by $29.5 billion (6.9%) to $458.0 billion in 2023. Interest expenses and livestock/poultry purchases are expected to see the largest increases in 2023 relative to 2022.
Farm sector equity is expected to increase 6.8% to $3.57 trillion in nominal terms. Farm sector assets are forecast to increase 6.6% in 2023 to $4.09 trillion following expected rise in the value of farm real estate assets. Farm sector debt is forecast to increase 4.9% to $520.1 billion. Debt-to-asset levels for the sector are projected to improve from 12.93% last year to 12.72% in 2023. Working capital is forecast to fall 5.5%.
