Farm net income projected to fall significantly in 2024

Farm net income likely to take a big hit in 2024

The earliest USDA estimates of 2024 farm net income were released in early February, and it appears farms are set to take a significant hit to their bottom lines this year. Farm net income, a broad measure of farm profitability, is currently projected to fall from 2023’s total. While it is early in the year and there is plenty of time for impacts from unforeseen factors, these estimates reflect the difficulties farmers are expected to face on both the revenue and expense sides of the net income equation.

Ag News Highlights

Cattle inventory hits 73-year low

As of January 1, 2024, the All Cattle and Calves inventory was 87.15 million head, which is the smallest total since 1951. While this was down only 1.9 percent from the start of 2023, the most recent inventory number marked a fifth straight decline and was 8.1 percent lower than the most recent peak in 2019. Lower inventory numbers are projected to result in a five percent drop in beef production in 2024.

Lower production should keep cattle and calve prices at-or-near record highs this year, and consumers should expect to continue to pay lofty beef prices for the foreseeable future. We noted in this space last year that extreme droughts were preventing buildup of the nation’s cattle herd; going forward, producers will look to increase inventory numbers as conditions permit. (Ag Web)

Cocoa futures soar

Bad news for chocolate lovers: cocoa futures have soared to record highs. Cocoa futures rose over 40 percent from January 1 through mid-February and are unlikely to move substantially lower in the near term, according to Billy Roberts, senior food and beverage economist at CoBank. “That could lead to a further erosion of chocolate volume sales and begin to impact dollar sales as well,” Roberts added.

The rally in cocoa prices has been largely due to a cut in expected production in West Africa, which produces most of the world’s cocoa. The region has experienced adverse weather conditions for cocoa beans, as well as a disease affecting cocoa trees known as swollen shoot disease. (Food Business News)

1.45 billion wings consumed during Super Bowl

The National Chicken Council estimated that 1.45 billion chicken wings were consumed during Super Bowl LVIII, which is even with Super Bowl LVII. Football fans paid less this year for the preferred Super Bowl snack in 49 of 50 states (Maine prefers lobster) as retail whole wing prices average $2.60 per pound the week before the big game, down from $3.30 in 2023. A climb in wholesale prices suggests retail prices could be on the rise this year, but sports fans can be hopeful that lower retail prices will continue to be enjoyed through NCAA March Madness.  (Texas A&M University) (NCC)