After rebounding last year, Nebraska net farm income this year is forecast to drop to its lowest level since 2020.
A report from the Rural and Farm Finance Policy Analysis Center at the University of Missouri predicts the state's farmers will bring in $6 billion in profit this year, down from an estimate of $7.2 billion last year and $6.6 billion in 2022.
Brad Lubben, an extension agricultural policy specialist with the Center for Agricultural Profitability at the University of Nebraska-Lincoln, which helped produce the report, said $6 billion is still a relatively strong number compared with the past decade and "builds on a solid financial position for agriculture in the state as a whole."
In fact, prior to the last three years, Nebraska farm income only topped $6 billion in two years this century, 2011 and 2013.
The report attributed the projected decline to a downturn in crop receipts in the state — due to lower crop prices in 2023 — that look to fall farther in 2024. Livestock receipts grew in 2023 on the strength of cattle prices but look to decline in 2024 with reduced cattle sales and further declines in other livestock commodities, according to the report.
Income also could be hurt by a decline in crop plantings.
The USDA's Prospective Plantings report released last month shows that Nebraska farmers are likely to plant 9.85 million acres of corn, down about 1% from 2023. That's actually considerably less than the 5% decline in corn acres forecast nationally.
Soybean acres planted are expected to be up slightly, but not enough to offset the decline in corn acres. Acres planted of wheat, which is the state's third-largest crop, are expected to fall by 12%.
Yields are expected to be up this year, however, according to the report, thanks to the easing of drought conditions in most of the state. But that will be offset by lower crop prices.
The decline in farm income is not likely to be limited to Nebraska.
The U.S. Department of Agriculture predicts farm income nationally will decline more than 25% from last year, to $116.1 billion. Unlike Nebraska, which saw higher income last year, national farm income also declined in 2023.
One thing that is weighing on farmers' income prospects both in Nebraska and nationally, is higher production costs, including higher interest rates.
According to the report, production expenses are expected to increase this year, although not by as much as they did last year.
Purdue University ag economist Michael Langemeier said that while crop prices have this low at other times, it has not hit profitability as hard as the current situation.
“What makes 2024 so much worse?” he asked. “Our breakeven prices are so high. … We’ve got to reduce these breakeven prices.”