State of Ag Economy Pt 2

From the Ag Information Network, I’m Bob Larson. During a recent webinar, the staff at Agricultural Economic Insights went over the current economic conditions that the agricultural industry is facing and what might lie ahead for 2024.

AEI’s David Widmar says the drop in farm income from 2022 to 2023 is large, but it’s important to keep things in perspective …

WIDMAR … “It was a big number, $40 billion, almost a 25 percent decline. That sounds like a shocking, scary number, especially when you put it in the context of high production expenses, high fertilizer, and high interest rates, But as we talked about earlier, it's still historically a really strong year. It is the artifact of coming off of a record-high number. When you start to revert to the mean after record highs, you're going to have some big adjustments.”

Widmar says that big drop between 2022 and 2023 was driven in large part by animal agriculture …

WIDMAR … “Value of animal production; a lot of this is coming out of the hog sector, and poultry is not doing very well also. So, a lot of the farm economy hits came out of the animal side. Higher production expenses accounted for about $16 billion, lower direct payments of almost $5 billion, and interest expense. That one kicked in at almost $9 billion of extra upturn here.”

For more information on AEI’s economic insights for agriculture, go to www.aei.ag