42 NEBRASKA CATTLEMAN January 2024 PERSPECTIVES NEBRASKA FARM INCOME UP ON STRENGTH OF CATTLE SECTOR BRAD LUBBEN | EXTENSION POLICY SPECIALIST | UNIVERSITY OF NEBRASKA-LINCOLN ELLIOTT DENNIS | EXTENSION LIVESTOCK ECONOMIST | UNIVERSITY OF NEBRASKA-LINCOLN Nebraska farm income prospects in 2023 have rebounded from a drop in 2022. While the drop in 2022 was largely attributed to drought impacts on crop yields and grazing losses, the rebound in 2023 can be attributed to the strength of the cattle sector. While final estimates for 2023 won’t be finalized for some time, the forecast from this fall shows Nebraska farm income at nearly $7.8 billion in 2023, up substantially from the final estimate of $6.6 billion in 2022 and near the record $8 billion from 2021. (Figure 1.) The forecasts come from a collaboration of the Center for Agricultural Profitability (CAP) at the University of Nebraska-Lincoln and the Rural and Farm Finance (RaFF) Policy Analysis Center at the University of Missouri. The numbers are based on the U.S. Department of Agriculture Economic Research Service data for Nebraska through 2022 and national projections for 2023, as well as projections and modeling by RaFF and the Food and Agricultural Policy Research Institute, also at the University of Missouri. The forecast for 2023 and projections for the decade ahead are available in a report on CAP at https://cap.unl.edu/farm-income. While the overall forecast shows the strength of the Nebraska farm economy, an analysis by sector helps identify some of the current trends and challenges going forward. On the crop side, receipts were actually down in 2023, despite recovering yields as lower prices and lower beginning-year inventories reduced the value of marketings during the year. A rebuilding of ending inventories helped to balance out the lower receipts, and the value of crop production in 2023 marginally exceeded 2022 at just under $14 billion. The mean projections for the next decade presume a return to trend as yields recover from the past couple years to trend higher while prices fall toWhile U.S. farm income projections topped a 2021 record with a new record in 2022 before falling in 2023, Nebraska net farm income took the fall in 2022 before rebounding in 2023. The stronger 2023 farm income projection near $7.8 billion is driven largely by higher livestock prices and recovery in ending year inventories and values. Crop receipts fall in 2023 due to lower prices in spite of a rebound in production while livestock receipts grow on much higher cattle prices in 2023 despite reduced inventories and marketings. Higher production expenses year after year are increasingly challenging profit margins, but for now, strong farm income prospects for 2023 show the strength of the agricultural sector in the state. Figure 1: Nebraska Net Farm Income 2021-2023 CONTINUED ON PAGE 44
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