Net Farm Income Drops 23%

If you were to suddenly lose a quarter of your take home pay, after taxes and deductions, could you pay the family bills and keep everyone at home fed?

If your answer is "oh hell no" then this latest report on the Net Farm Income should alarm you.  Between 2022 and projected through 2024, agricultural enterprises across the nation, family farms, may likely realize a staggering 23% decrease in net farm income.  In basic economics, this is the amount made from crops minus the expenses to produce these commodities.

Inflation is the major cause of this income reduction.  All those farm expenses became more expensive.

Start with the Fuel

The price increase in gasoline affects every sector of the economy, Ag being no different.  Farmers burn gas to operate tractor equipment and ranchers burn gas to get across the countryside to where the cattle and sheep are.  Lose too much day to get there on horse.

Need gas and diesel to transport all the ag product, as well as all the merchandise we enjoy.  The rise in fuel price is simply transferred to the rising price of the merch, right?  And ag producers have to buy some too, right?

Include environmental conditions, insufficient market prices and ever-changing regulatory burdens, and the bottom line gets smaller and smaller.

At some point, the farm family will throw up their hands and say "Can't do this anymore."

We are losing Farms and Ranches

According to the Ag Census, in the last five years America has lost around 140,000 farms and ranches.  Where'd they go?  Some may be bought and absorbed into larger operations, some developed into subdivisions, and maybe some just not worked.

You can read the article and the details in this link from the Farm Bureau.

Travis, I don't work in Ag.  Why should I be bothered by this?

You shop in a grocery store?  Like getting what you want in a store?  Imagine going shopping and seeing less on the shelves.  And what is there costs more.  Even that unhealthy processed foods will take more from your debit card balance.

Like dining in a restaurant or cafe?  Like grabbing a quick meal at a fast-food place?  Get ready for the prices to increase due to limited supply.  Too expensive?  Well, cook a meal.  Oh, that's right, the groceries cost more.

Kinda stinks, don't it?

Now read that first question again.

Get our free mobile app