What's Happening To Our Farmers: USDA Predicts Worst Financial Year In History

Rural America is experiencing a significant amount of quiet stress. With an eye toward outpacing the current low crop prices, farmers are still concentrated on growing this year's crop. Many of them believe 2024 will go down in history as their worst financial year ever.

What's happening to our farmers?

Worst financial year everPhoto byRichelleg

The truth is stark. According to USDA estimates, net farm revenue in 2024 will be $116.1 billion, a $43 billion decrease from 2023. That represents a 25.5% drop in only a single year. It is all the more startling in light of the fact that the 2023 net farm income number was 16% lower than the 2022 figure. This will be the biggest decline in net agricultural income in recorded history.

But things can turn out to be even worse than the USDA has officially predicted. On-farm storage is at its highest levels since the 1980s. Farmers are hesitant to sell because prices are now lower than costs, so they're hanging on to crops. And as July came to an end, corn and soybean markets are witnessing yet more carnage.

Abandoned farmPhoto byRichelleg

That's not even taking into account the wacky weather we've been having all over the country (and the world), politics, the push for bugs as sustainable food, the housing crisis, climate change, or weather modification.

Farm Finance Stress

Liquidity is not the only financial hardship for farms. When one ag banker testified on Capitol Hill earlier this week regarding the state of the farm sector, he painted that bleak image for Congress.

A lone tractorPhoto byRichelleg

Farmers and ranchers have used up the liquidity and operating capital they had accumulated over the previous three years more quickly than expected due to increased input costs and declining commodity prices. Refinancing debt is now being used to leverage equity. Naturally, mounting production expenses allow only the biggest producers and farms to survive.

Farming industries are also having difficulty. Deere announced further layoffs of employees just last week, citing the challenging conditions in the agriculture sector.

Crops drying outPhoto byRichelleg

Citations:

Rogin, A., & Mufson, C. (2024, February 18). “We have reached the end of our rope.” Why farmers around the world are protesting. PBS News. https://www.pbs.org/newshour/show/we-have-reached-the-end-of-our-rope-why-farmers-around-the-world-are-protesting

https://www.washingtonpost.com/business/interactive/2023/american-agriculture-farming-climate-change/