After several years of successive record farm incomes and rising land values, American agriculture's financial balance sheet is strong. But, there are signs that times are about to become tighter.
USDA expects the average net cash farm income per operation to decline 20% to $87,300 for the 2023 calendar year, driven by lower commodity prices and higher production expenses. At the same time, the Federal Reserve Bank of Kansas City notes that non-real estate ag loans have been growing at the fastest clip since 2016, a sign of tightening liquidity in farm country.
It's impossible to tell if the corn and soybean markets have reached the peak of the commodity cycle until prices are on the downside. Just think about how bearish everything looked last spring and the roller coaster of crop conditions since.
No one knows when the commodity cycle will flip or how long prices could stay depressed, and that uncertainty is exactly why it's important to prepare your business. One of the best places to start is by fortifying your financial foundation. As you're completing year-end work on the balance sheet, preparing for winter meetings with lenders and partners, and focusing on the nonproduction aspects of farming, set some time aside to assess your goals. Are you heading in the right direction? What can you do better?
I'd also encourage you to join me for the DTN Virtual Ag Summit on the mornings of Dec. 5-6, 2023, from the comfort of your home or office. We've woven this year's theme, Fortify Your Financial Foundation, throughout the agenda. Over the course of two mornings, we'll discuss global economics, farmland values, interest rates, business planning, taxes and more.
You'll also get an early look into the weather and grain market forecasts for 2024 with DTN Ag Meteorologist John Baranick and DTN Lead Analyst Todd Hultman.
Our webinar-meets-television-show format fits a lot of content into a short window of time. We know your time is valuable, so we'll also make videos available for on-demand viewing. Visit https://www.dtn.com/… for more details on the agenda and a link to register.
-- Register for the DTN Virtual Ag Summit at https://www.dtn.com/…
-- Read Katie's business blog at https://about.dtnpf.com/…
-- You may email Katie at email@example.com, or visit @KatieD_DTN on X (formerly Twitter).
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