(The Center Square) – Missouri farmers are projected to have an 18% decrease in net income in 2024, according to a study by the University of Missouri.
Nationally, the projection estimates a 25.5% decrease in net farm income.
The “Spring 2024 Missouri Farm Income Outlook,” by the university’s Rural and Farm Finance Policy Analysis Center, shows crop and livestock receipts are expected to decrease by a combined $1.6 billion, resulting in a projected decline in net farm income to $3.6 billion this year.
“Although decreased production expenses offer some relief, reduced livestock inventories and lower crop prices are impacting Missouri producers – leading to the projection of lower farm receipts in 2024,” Scott Brown, interim director of the center, said in a statement.
Crop receipts are projected to decrease 11% this year after peaking in 2022 along with slower food price inflation.
“Consumer food price inflation slowed in 2023 and could slow further in 2024,” the report stated. “The consumer price index for food increases by a projected 2.1% in 2024, with the food-away-from-home category accounting for most of the increase.”
The amount of planted area in the state is expected to decrease by 136,000 acres. Less corn will be planted but more acres will be planted with soybeans.
Receipts for corn are expected to drop $486 million due to decreased production and lower prices. Despite the projection of more soybeans planted and produced this year, receipts for the crop are expected to drop $378 million.
“Rising production of renewable diesel increases demand for soybean oil and other fats and oils,” according to the report. “This supports soybean oil and soybean prices, but the resulting increase … puts downward pressure on soybean meal prices.”
Livestock receipts are expected to drop 9%. The agency stated cattle and hog receipts could recover next year.
“Hog, poultry, and milk prices all declined in 2023 as demand weakened,” according to the report. “In contrast, cattle prices increased in 2023 and further increases are expected in 2024 and 2025. Drought and other factors have reduced the cow herd, and it will take time before beef production can increase again.”
Farmers can expect to pay 5% less to produce crops. Fertilizer is expected to drop by $352 million, feed is expected to decline $464 million, and fuel and oil expenses are projected to be down $30 million. However, the cost of purchased livestock, seed, labor, taxes, and capital consumption are expected to continue rising.
“… farm income projections can help us better understand farm finance indicators across a broader geography, and we can start to explore their uniqueness,” Brown said. “The Missouri Farm Income Outlook, and outlooks from our collaborating institutions, can help policymakers, stakeholders and producers make informed decisions.”
The report showed the share of crop receipts in Missouri from 2018 to 2022 was led by soybeans (46%), corn (36%), cotton (5%), rice (3%) and wheat (3%). Livestock receipts were led by cattle (42%), chickens (18%), hogs (17%) and turkeys (8%).
