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Farmers Buckle Down as USDA Predicts Income Dip

By Marlee Jackson

Just two years after the roller coaster of net farm income reached a record peak, farmers are buckling in for a bumpy ride as profitability is predicted to plummet.

National net farm income is forecast to drop to $116 billion, per the U.S. Department of Agriculture (USDA). Adjusted for inflation, USDA’s prediction is a whopping 40.9% decrease from 2022’s historic high income of $185.5 billion.

“We’ve had $3 and $4 corn before, but we didn’t have these elevated fertilizer, chemical, seed and repair costs,” said John Bevel, who grows row crops in Marshall and Jackson counties. “2024 is not looking very good unless you have really high yields.”

USDA insights help gauge profitability for farmers like Bevel.

In 2024, the national agency expects a decrease in agricultural exports for the third time in five years. The anticipated $8.3 billion decline means exports will total just $170.5 billion. Meanwhile, farm debt is expected to reach $27 billion, a 5.2% increase.

Analyzing those trends is complex, said the Alabama Farmers Federation’s Chris Prevatt. He’s a commodity director and economist who daily scours market data for its impact on farmers.

Market prices and production costs spiked mid-pandemic, he said. Those problems coincided with global issues like the war in grain-giant Ukraine. That conflict spurred an increase in U.S. production, though prices then tanked as Ukrainian grain eventually flooded the market, Prevatt said.

Market prices have fallen across commodities, while overall input costs are increasing for the sixth straight year thanks to global pressures and inflation.

Take Bevel’s farm.

Since the pandemic, chicken litter for fertilizer has increased from $550 a ton to $900 — a 60% increase. Nitrogen shot up 33% to $300. Corn seed increased 25% to around $325 a bag.

Meanwhile, corn hovers around $4 a bushel. That’s near the pre-pandemic price when input costs were considerably lower.

“Corn would need to be $5.25 a bushel just to keep the same pace as input cost increases,” said Bevel, who serves on the Federation’s State Wheat & Feed Grain Committee. “I don’t think anyone is going to be wasting any money, but you still have to take care of the crop so you make a good yield — if we get the rain we need. You can’t cut back too much.”

While plunging market prices trouble row crop farmers, State Catfish Committee member Travis Wilson said subsequent lower feed costs could improve his farm’s bottom line.

Travis raises catfish in Dallas County with his father, Butch, and brother-in-law, Willard Powe. Feed makes up around 60% of their catfish production costs, and that cost has ticked upward in the last five years. Travis secured feed at under $400 a ton in 2019. It’s just below $500 today, though feed reached $550 last year.

Catfish helps keep the Black Belt Region afloat, even as production has become more difficult since the early 2000s when foreign, low-quality fish began flooding the market.

Butch said fluctuations — in price plus supply and demand — mean planning is critical.

“You just live within your means, and you hope that your means are what you thought they’d be 12 months from now (when you get paid),” said Butch, who survived devastating near-20% interest rates of the early ‘80s. “You’re not going to have deflation. This is the new norm.”

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