Ag Informer – Net Farm Income Forecasts (Part 2)

Expectation for Fewer Government Payments 

Another factor at play is the forecast for lower government payments. USDA’s forecasting:

•    Direct government payments to fall by $5.4 billion (34.4 percent) from 2022
•    Direct government payments are expected to reach $10.2 billion in 2023
•    The decrease is largely due to expectation of lower supplemental and ad hoc disaster assistance in 2023 compared to the previous years

Farmer Sentiments Inch Higher in January 

Despite the waning outlook for net farm income, farmer sentiment seems to be improving. The latest CME Group/Purdue Ag Economy Barometer, which was also released on Tuesday, shows farm sentiments improved 4 points from December to January.

The also pointed out that while sentiments did edge higher, the majority of farmers report they expect tighter margins in 2023 than in 2022.

USDA expects total operator dwelling expenses to increase 4.1% to $459.5 billion in 2023. Of that, interest expenses and livestock/poultry purchases make up the largest dollar increases year-over-year.