The United States Department of Agriculture anticipates a $43.1 billion loss in net agricultural revenue in 2024 compared to 2023, the greatest year-over-year drop in history. smaller commodity prices, smaller direct government payments, and greater manufacturing costs all contribute to the reduction. Commodity prices are predicted to fall by $21.2 billion between 2023 and 2024, with lower agricultural and animal product sales for maize, soybeans, eggs, turkeys, cattle, and milk.
The American Farm Bureau Federation’s president, Zippy Duvall, is urging Congress to prioritize lowering farmer expenses and adopting a new farm bill. High inflation raises the cost of producing food, reducing the revenue that farm families depend on to pay bills, educate their children, and reinvest in the community. The previous farm bill approved in 2018 expired at the end of the year, but due to upheaval in the United States House of Representatives, it was prolonged another year, which proponents argue does not account for significant developments in the sector over the last five years.
There are differing views on whether Congress will be able to pass the farm bill this year, and the fact that it is an election year doesn’t help. AJ Wormuth, proprietor of Half Full Dairy in Central New York, said that everything is up except milk costs. Inflation has increased the cost of almost everything, including all of our inputs. Feed is down little, but everything else is taking up the tiny amount of savings. Almost every week, we get a letter from one of our suppliers stating that they must increase pricing.”
According to the USDA research, overall production expenditures are expected to rise by 3.8% in 2024, with labor accounting for the majority of the increase (7.5%). Additional increases include 12% for marketing, storage, and transportation, as well as 7.2% for pesticide costs. High freight prices and global trade route interruptions are driving up shipping costs, while interest payments are putting a pressure on profits for highly leveraged farmers with floating-rate loans.
In New York, the labor problem is of special importance since the state changed the overtime threshold, requiring employers to pay workers extra rates over 56 hours rather than 60 hours and then submit for a state tax credit. Farmers should carefully assess their risk of exposure and seek guidance in selecting risk management techniques that are appropriate for their business.
