Income

Missouri farm income will set new records in 2022

COLUMBIA, Mo. — Missouri farm income looks set for another record year, according to John Kruse, research and extension associate professor of agricultural and applied economics at the University of Missouri.

“It’s not often when there are back-to-back record years for Missouri farm income, but the data suggests that 2021 set a new record for Missouri farm income at $4.27 billion, and 2022 looks be close behind at $4.19 billion,” Kruse said. . “The last time Missouri farmers saw such high income levels was in 2013 and 2014. Comparable real net farm income levels (in 2022 dollars) were $4.02 billion and $4.09 billion in 2013 and 2014, respectively.

The USDA will not release official Missouri net farm income estimates for 2021 until November.



Kruse presented his report on Missouri’s 2022 farm income outlook at the recent Abner Womack Missouri Farm Outlook Conference, hosted by MU’s Food and Agriculture Policy Research Institute.

Commodity prices — which have gradually risen as global supplies have tightened — are driving revenue growth, he said. Last year’s drought in Canada reduced canola production by 35%, and dry conditions persist in south-central Canada. Southern Brazil and Argentina experienced a second year of La Niña-induced drought, significantly reducing their current soybean crops. Dry conditions in Europe are raising concerns for the upcoming growing season. In the United States, 30% of the wheat crop is in good to excellent condition, compared to 53% at the same time last year. Drought conditions persist across much of the southwestern United States, including livestock grazing areas.



In addition, the Russian-Ukrainian war is likely to reduce Ukraine’s exportable agricultural production in the current marketing year 2021-22 as well as the next marketing year 2022-23 and possibly beyond. , primarily affecting wheat, corn and sunflower products, Kruse mentioned. Sanctions on Russia are expected to affect fertilizer supplies and energy prices, and prices are likely to remain high for these inputs for years to come.

World stocks of maize, wheat and oilseeds remain tight, with rice the only major food item with stocks above the 30-year average. Commodity prices are expected to remain volatile, reacting strongly to new developments.

Missouri farmers are also experiencing broader base levels, suggesting Board of Trade prices aren’t necessarily well reflected in local prices, Kruse said. He advises producers to use risk management tools for pricing and production.

While higher commodity prices increase crop incomes, they also mean higher feed costs for livestock keepers. Missouri beef cow numbers fell 6.3% from January 2021 to January 2022. Missouri breeding hog inventories fell 2.3% in year-over-year estimates on Dec. 1 2021, after falling 10.2% the previous year. Although livestock receipts in 2021 are estimated at $1.3 billion, this increase is more than half offset by rising feed and feeder livestock costs. January 2022 projections suggested margins could tighten, but livestock prices in the first quarter of 2022 were higher than expected in January and will help bolster livestock receipts in 2022.

As farmers look to the 2022 growing season, there is reason to remain optimistic, Kruse said.

“The strength in farm incomes is occurring even as ad hoc government payments are significantly reduced from 2020 levels,” he said. “Higher commodity prices may add to crop and livestock cash receipts, but there will likely be some offset from higher production expenses, especially feed, fertilizer, fuel, labor -work, interest, etc.”

Kruse suggests farmers pay particular attention to new opportunities offered through the USDA’s Climate-Smart Commodities program that could generate new sources of income through non-traditional sources.

Kruse is part of the Agriculture and Environment program, a partnership between MU Extension and the MU College of Agriculture, Food and Natural Resources.

“2022 Missouri Farm Income Outlook” is available for download at umurl.us/MoFarmIncome2022.