Nebraska's farm income faces decline in 2023

By Scout Nelson

Nebraska's agricultural landscape is set for shifts. Historically high net farm income observed in 2022 is forecasted to dip this coming year. This prediction hinges on the evolving dynamics of commodity prices, the costs of production, and overall agricultural output.

From 2011 to mid-2023, the price indices for key crops like corn and soybeans were comparatively high. These figures, benchmarked against 2007-2010 standards, showed promise. A sharp turn since July has seen cash bids for these crops drop notably. With drought conditions leading to diminished yields and production, 2023's crop revenue may witness a decline.

On the flip side, input costs that impact crop production, showcased by indicators like fertilizer, chemicals, and diesel prices, have experienced peaks since mid-2021. While there's a glimpse of cost reductions, it may not significantly benefit this year's producers, given that most inputs were acquired earlier.

The cattle industry offers a silver lining. Cattle prices in Nebraska have risen, marking record highs this year. The average fed cattle price reached an unparalleled $186.78 per cwt., surpassing the last peak in 2014. Prices for feeder cattle, primarily young steers, also registered an all-time high.

These rising prices stem from a smaller herd size due to past droughts and a consistent demand for beef. But the problem lies in the fact that fewer cattle may impact the total revenue stream in 2023.

For those raising cattle, feed costs, including hay, alfalfa, and corn, are notably high and remain substantially above the baseline of 2007-2010. This raises concerns for many entering 2023, fearing the twin challenges of persistent high input costs and a potential dip in crop and cattle prices.

This combination could strain profitability for crop producers. Cattle farmers, on the other hand, may see better returns per cow due to rising cattle prices offsetting feed costs.

While 2023 promises challenges, the outcome for Nebraska's farm income is still unfolding. But indicators suggest that this year might be a tougher puzzle to solve than 2022.

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