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Lower crop prices mostly responsible for net farm income decline

The director of the University of Missouri’s Food and Ag Policy Research Institute says lower crop prices take most of the blame for a continued decline in net farm income.

Pat Westhoff tells Brownfield there’s lower crop prices across the board.

“If you take all the major field crops: corn, soybeans, wheat and cotton, there’s significant price declines and a drop in the value of production.”

A new report from FAPRI projects a 35% decline in real net farm income from 2022 to 2025. FAPRI’s projected net farm income for 2024 is $137 billion, a reduction of $9 billion from last year.

Westhoff says the livestock sector is doing better than crops, but the impacts of lower crop receipts outweigh high cattle prices and some moderate production expenses. But farmers might be able to save on costs as farm income declines.

“If you’re someone renting your land, what you pay for that rental contract is incredibly important. Can you still afford to pay what you’re currently paying and make it work? If you’ve just made machinery purchases, what does that imply and what expenses might you be able to forego in the near-term without hurting your ability to produce a crop?”

The FAPRI report says farm income is expected to have a modest recovery in 2026.