Understanding the Trend: Why government payments to farmers are declining

USDA Chief Economist Seth Meyer Explains Expected Decline in Farmer Income for 2024

As the agricultural community braces for a drop in farmer income this year, USDA Chief Economist Seth Meyer sheds light on the reasons behind the anticipated decline. Meyer emphasizes the role of declining government payments in this trend, highlighting their connection to commodity prices.

“Direct government payments will contract again in 2024,” Meyer states, indicating an overall reduction in government intervention compared to the long-run average. He explains that these payments exhibit a lag effect, with payments in 2024 influenced by commodity prices from the previous year.

Meyer elaborates, stating, “For instance, the payments that farmers will receive in 2024 for Arkin PLC in October 2024 are related to prices in 2023.” Therefore, if prices were high in 2023, there will likely be fewer government payments associated with certain programs like ARC and PLC.

Overall, the decline in government payments reflects a broader trend of decreasing government intervention in the agricultural sector. With payments falling below the long-run average, farmers may face additional challenges in managing their finances and navigating market uncertainties.

Related Stories
The Iowa Soybean Association shows us how one company, Benson Hill, is helping farmers grow soybeans with a specific purpose.

LATEST STORIES BY THIS AUTHOR:

Taste the heat and heart of country music in every mouthful!
More than 80 dairy herds have been infected with the virus across 11 states since late March.
As hog prices face potential decline, pork producers are dealing with a surge in litter rates, complicating efforts to control production.
In February, farmers experienced a slight increase in prices, though it fell short of surpassing last year’s numbers.
According to a new USDA-ERS report, technological advancements in agriculture led to significant output increases while reducing input usage for producers.
The prospect of reintroducing grizzly bears in Washington’s North Cascades has ignited a contentious debate, pitting conservation efforts against the concerns of local farmers and ranchers.