Kansas farm income dips despite livestock gains

By Scout Nelson

A recent revelation from the University of Missouri's Rural and Farm Finance Policy Analysis Center spells a bittersweet forecast for Kansas farmers. While livestock is proving more lucrative, income from crops is dwindling, leading to a marginal net farm income reduction in 2023 compared to the previous year.

The numbers tell a compelling story: Kansas farms pocketed a neat $4.01 billion in 2022, but projections for 2023 hover around $4 billion, marking a subtle 0.16% decline. This slight dip feels more pronounced when factoring in inflation.

A deeper dive into the specifics reveals that crop receipts are set to plummet by $2.14 billion. Fortunately, this blow is softened by an upswing in livestock receipts by $1.71 billion, coupled with modest rises in crop insurance and government payments, each by $0.15 billion.

The report details a shift in farming strategy, with 600,000 acres withdrawn from soybean cultivation, predicting a revenue shrinkage of $0.50 billion. But it's not all doom and gloom for soybeans. The report highlights a silver lining: escalated biofuel utilization bolsters soybean and soybean oil prices, even though the boon doesn't extend to soybean meal.

Contrarily, corn, sorghum, and wheat, despite expanded cultivation, are likely victims of slumping commodity prices. These circumstances don't bode well for crop revenue, but livestock farmers have reason to smile. A surge in meat prices, particularly in the beef sector, is set to fatten cattle and calf receipts by an impressive $2.1 billion. However, it's not a universal celebration in the livestock arena, as the hog/pig and dairy sectors might see their fortunes dwindle.

The report points out the reversals in agricultural commodity prices that set records in 2022, attributing the downturn to increased global grain production and other economic factors. Notably, except for cattle, most U.S. farm product prices are on the descent in 2023.

Poultry and eggs, contributing a mere 1% to Kansas livestock, don't quite make a splash in the state's overall farm narrative.

The document forecasts sunnier days ahead in 2024 and 2025, with Kansas net farm income potentially climbing thanks to robust cattle markets and decreased expenses, averaging hopeful figures around $4.7 billion across a decade.

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