The USDA’s latest Farm Income Forecast Report shows a significant drop between 2022 and 2023. Danny Munch, an economist with the American Farm Bureau, says the picture is a little brighter than the August predictions, but not much.

"In the August reports, USDA forecasted that farm income from 2022 would drop 23 percent, a $41 billion drop from 2022. In this new November report, they adjusted that number--$41 billion--to $31.8 billion, which is a 17 percent drop from 2022," Munch said. "In total, that would give you a total net farm income of $151 billion for 2023 compared to the $141 billion estimated previously in August."

Munch talks about some of the main factors behind the revisions.

"The most significant revisions are attributable to lower production expenses compared to what they estimated in August," Munch said. "There's still a $14.9 billion expected increase in what farmers are paying for production expenses, which is about four percent. But that's seven percent lower than what they forecasted in the August release."

Munch says there is some good news about the forecast, though overall it is a mixed bag.

"For all categories except fuels and oils, electricity and interest expenses, they adjusted their numbers downward. Things like fertilizer, pesticides, seeds, those all saw decreases from what they estimated that farmers will be paying," Munch said. "Electricity, fuels, oils, interest expenses all saw increases. So those are things farmers saw upward adjustments and are going to pay more for in 2023 than they estimated previously."

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