Daily Market Highlights

Cattle futures closed lower again Tuesday, at a more modest pace, with follow-through pressure from oversold status and awaiting the week’s cash fed cattle trade direction.

Feeder Cattle futures closed an average of 72¢ lower (35¢ to $1.60 lower).

Live Cattle futures closed an average of 56¢ lower.

Negotiated cash fed cattle trade was at a standstill in all regions through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, FOB live prices were $182-$183/cwt. in the Southern Plains, $184-$185 in Nebraska and $185 in the western Corn Belt. Dressed delivered prices were $292.

Choice boxed beef cutout value was $3.20 lower Tuesday afternoon at $302.12/cwt. Select was $1.63 lower at $281.78/cwt.

Corn futures firmed in the front months, buoyed by recent crop ratings. They closed mostly 2¢ to 4¢ higher through Jly ‘25.

KC HRW Wheat closed 1¢ to 4¢ lower.

Soybean futures closed 1¢ lower through Aug ‘24 and then unchanged to fractionally higher.

******************************

Major U.S. financial indices closed lower Tuesday as investors appeared skittish over the Fed’s looming next decision about interest rates.

The Dow Jones Industrial Average closed 106 points lower. The S&P 500 closed 9 points lower. The NASDAQ was down 32 points.

West Texas Intermediate Crude Oil futures (CME) closed 9¢ to 28¢ lower through the front six contracts.

******************************

Although less than last year, September estimates suggest corn prices are likely to remain in their current price range, says Kenny Burdine, Extension livestock economist at the University of Kentucky, in the latest Cattle Market Notes Weekly.

“Holding everything else constant, higher corn prices lead to lower feeder cattle prices as greater cost of gain decreases the value of cattle placed into feeding programs. However, higher feed prices also result in higher value of gain as feedlots are incentivized to place heavier cattle,” Burdine explains. “The September report (WASDE) suggests that opportunities to profitability add gain to calves and sell heavier cattle are likely to remain in the coming months. This will be especially true for cow-calf and growing operations that have potential to add gain through forage or alternative feeds. Producers should continue to be diligent about evaluating costs and market conditions as they make decisions about post-weaning and backgrounding programs.”

Cattle futures took a breather from the steamy rally and closed lower Monday on likely profit taking.

Feeder Cattle futures closed an average of $2.34 lower ($1.70 lower at the back to $3.52 lower toward the front).

Live Cattle futures closed an average of 84¢ lower (25¢ to $1.40 lower).

Negotiated cash fed cattle trade ranged from inactive on light demand to a standstill through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

Last week, FOB live prices were $182-$183/cwt. in the Southern Plains, $184-$185 in Nebraska and $185 in the western Corn Belt. Dressed delivered prices were $292.

Choice boxed beef cutout value was 39¢ lower Monday afternoon at $305.32/cwt. Select was 29¢ higher at $283.41/cwt.

Corn futures closed mostly 3¢ to 4¢ lower.

KC HRW Wheat closed 8¢ to 12¢ lower through Sep ‘25 and then 1¢ higher.

Soybean futures closed 15¢ to 23¢ lower.

******************************

Major U.S. financial indices trickled higher Monday as investors wait for this week’s FOMC meeting. 

The Dow Jones Industrial Average closed 6 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 1 point.

West Texas Intermediate Crude Oil futures (CME) closed mixed, from 15¢ lower to 71¢ higher  through the front six contracts.

******************************

Based on current price strength, USDA’s Economic Research Service left the third-quarter feeder steer price unchanged at $250/cwt. but increased the expected fourth-quarter price by $4 to $259/cwt., in the latest Livestock, Dairy and Poultry Outlook. Prices were raised by $1 in the first and second quarter of next year at $249 and $248, respectively. The annual average price is projected at $225.99 this year and $253.75 next year.

“Over the last four weeks, wholesale boxed beef values have bounced back after retracting from this year’s highs set in June. However, fed cattle prices have not responded similarly,” say ERS analysts. “The August average price for fed steers in the five-area marketing region was $184.85/cwt., nearly flat since June but $41 higher year over year. This situation has allowed packer margins to improve during this time and coupled with expected higher seasonal beef demand and tightening fed cattle supplies, prices are not expected to fall further. As a result, the fed steer price forecast is unchanged at $178.50 and unchanged for next year at $186.”

Commercial beef production was forecast at 26.941 billion lbs. for this year, 40 million lbs. less than last month’s projection, based on a lower production outlook for the second half of the year.

“This is based on a slower expected pace of fed cattle marketing in September that is partially offset by higher expected cow slaughter for the rest of the year,” ERS analysts say. “As a result, the outlook for 2024 production remains unchanged from last month at 25.2 billion lbs.”

Cattle futures rallied sharply higher Thursday, despite the lack of weekly cash fed cattle direction as traders seemed to focus on looming tighter fourth-quarter supplies.

Feeder Cattle futures closed an average of $3.24 higher ($1.67 higher in spot Sep to $4.02 higher).

Live Cattle futures closed an average of $2.54 higher, in active trade.

Negotiated cash fed cattle trade ranged from slow on light to moderate demand to a standstill through Thursday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live delivered trades in Nebraska at $186.50/cwt.

The only established trade for the week is $184/cwt. for FOB live prices in the western Corn Belt, the upper end of last week’s range.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $183-$184 in Nebraska. Dressed delivered prices were $290 in Nebraska and $288-$290 in the western Corn Belt.

Choice boxed beef cutout value was $1.18 lower at $306.37/cwt. Select was 33¢ lower at $286.86/cwt.

Corn futures softened mostly fractionally lower to 1¢ lower on likely profit taking.

KC HRW Wheat closed mostly 3¢ to 6¢ lower.

Soybean futures closed mostly 7¢ to 11¢ higher.

******************************

Major U.S. financial indices rose Thursday, buoyed by positive economic data including robust monthly retail sales.

The Dow Jones Industrial Average closed 331 points higher. The S&P 500 closed 37 points higher. The NASDAQ was up 112 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.46 to $1.73 higher through the front six contracts.

Cattle futures sauntered lower Wednesday with traders awaiting weekly cash fed cattle direction.

Feeder Cattle futures closed an average of $1.03 lower (20¢ to $2.20 lower).

Live Cattle futures closed an average of 32¢ lower, (2¢ to $1.00 lower).

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were a few live trades in the western Corn Belt at $184/cwt.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $183-$184 in the North.

Dressed delivered prices were $290 in Nebraska and $288-$290 in the western Corn Belt.

Choice boxed beef cutout value was 48¢ lower Wednesday afternoon at $307.55/cwt. Select was $3.41 higher at $287.19/cwt.

Corn futures closed mostly 4¢ to 5¢ higher Wednesday with apparent technical buying and support from wheat.

KC HRW Wheat closed 10¢ to 14¢ higher.

Soybean futures closed mostly 3¢ to 6¢ higher.

******************************

Major U.S. financial indices closed mixed Wednesday.

The Dow Jones Industrial Average closed 70 points lower. The S&P 500 closed 5 points higher. The NASDAQ was up 39 points.

West Texas Intermediate Crude Oil futures (CME) closed 22¢ to 32¢ lower through the front six contracts.

******************************

Even if you take drought recovery out of the equation, there’s no clear indication about how aggressive producers will retain heifers and begin herd rebuilding this fall.

“On one hand, we have the higher feeder cattle prices, current and deferred, which incentivizes the desire to retain cows and heifers to get profits in the future,” explains Elliott Dennis, Extension livestock economist at the University of Nebraska-Lincoln. “However, there are also atypically seasonal incentives to sell both cull cows and heifers at higher current market values than previously experienced and forgo profits next year.”

Dennis says declining cow numbers and strong ground beef demand are keeping cutter cow and slaughter cow prices significantly higher than both the five-year average and 2022 with general price support for cutter cows at $90/cwt.

“Higher and stronger ground beef prices and boxed beef cutter cow cutout will only keep these prices high or increase them into the fall. These seasonally higher prices should continue to impact the beef cow slaughter rate,” Dennis explains in the most recent issue of In the Cattle Markets from the Livestock Marketing Information Center.

As it is, even though weekly beef cow slaughter rates are declining, beef cow slaughter continues above the five-year average, according to Dennis. He adds heifers, as a percentage of total cattle on feed remains at the highest level in 20 years at about 40%.

Ultimately, Dennis says the tradeoff this fall will be between cashing in on cows and heifers at high prices or chasing after $310 per cwt. values on 500-600 lb. feeder cattle in 2024.

“Producers need to be extremely diligent about calculating how much they can pay for replacement heifers, as well as how much value that heifer has when she is retained rather than sold under current market conditions,” Dennis says. “Understanding what needs to go right and what can go wrong for heifers and bred cows to pay for themselves will be extremely important this fall.”

Cattle futures crept mostly higher Tuesday.

Feeder Cattle futures closed an average of 54¢ higher, except for an average of 55¢ lower in the front two contracts.

Live Cattle futures closed an average of 18¢ higher, except for an average of 8¢ lower in two contracts.

Negotiated cash fed cattle trade ranged from mostly inactive to a standstill through Tuesday afternoon with too few transactions to trend according to the Agricultural Marketing Service.

Last week, FOB live prices were $180/cwt. in the Southern Plains and $183-$184 in the North.

Dressed delivered prices were $290 in Nebraska and $288-$290 in the western. Corn Belt.

Choice boxed beef cutout value was $2.08 lower Tuesday afternoon at $308.03/cwt. Select was $1.66 lower at $283.78/cwt.

Corn futures faltered Tuesday, closing mostly 6¢ to 9¢ lower on the monthly World Agricultural Supply and Demand Estimates (see below), which pegged harvested acres and production higher than the trade expected.

KC HRW Wheat closed 4¢ to 7¢ higher.

Soybean futures closed 12¢ to 22¢ lower.

******************************

Major U.S. financial indices eased lower Tuesday, led by tech stocks.

The Dow Jones Industrial Average closed 17 points lower. The S&P 500 closed 25 points lower. The NASDAQ was down 144 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.20 to $1.55 higher through the front six contracts.

******************************

USDA’s Economic Research Service (ERS) left expected fed steer prices unchanged for this year, in the September World Agricultural Supply and Demand Estimates (WASDE).

The weighted average five-area direct fed steer price was projected at $184/cwt. in the third quarter and $190 in the fourth quarter for an annual average price of $178.50. The annual average price next year was forecast at $186 with prices in the first and second quarters $188 and $186, respectively.

Beef production was estimated to be 26.9 billion pounds this year, which would be 1.4 billion pounds less (-4.8%) than last year. Beef production for next year was forecasted to be 1.8 billion pounds less (-6.6%) than this year at 25.2 billion pounds.

Estimated beef production for this year was revised slightly lower, compared to the previous month’s WASDE, on a slower pace of marketings in the third quarter. “This decline is only partly offset by higher expected carcass weights in the quarter and higher expected cow slaughter in the third and fourth quarters,” ERS analysts say.

Corn

The 2023/24 U.S. corn outlook was for slightly larger supplies and ending stocks. Corn production for 2023/24 was forecast 23 million bushels higher than the previous month at 15.1 billion bushels, as greater harvested area more than offset a reduction in yield. The national average yield was forecast at 173.8 bushels per acre, down 1.3 bushels. Harvested area for grain was forecast at 87.1 million acres, up 0.8 million.

The forecast season-average corn price received by producers was unchanged at $4.90 per bushel.

Cattle futures rallied higher Monday, bolstered by higher cash fed cattle prices at the end of last week, as well as the bullish extended outlook.

Feeder Cattle futures closed an average of $2.16 higher (87¢ higher in spot Sep to $2.65 higher toward the back).

Live Cattle futures closed an average of 95¢ higher amid active trade.

Negotiated cash fed cattle trade was mostly inactive on light demand through Monday afternoon with too few transactions to trend according to the Agricultural Marketing Service.

Last week, FOB live prices were $1 higher in the Southern Plains at $180/cwt., $1-$2 higher in Nebraska at $183-$184 and steady to $1 lower in the western Corn Belt at $183-$184.

Dressed delivered prices were steady to $2 lower in Nebraska at $290 and steady to $2 lower in the western. Corn belt at $288-$290.

The weighted average five-area direct fed steer price last week was 22¢ lower at $182.28/cwt. The average dressed steer price was 91¢ lower at $289.48.

Choice boxed beef cutout value was $2.79 lower Monday afternoon at $310.11/cwt. Select was 61¢ lower at $285.54/cwt.

Corn futures firmed Monday, closing 2¢ to 3¢ higher with positioning ahead of Tuesday’s monthly World Agricultural Supply and Demand Estimates.

Soybean futures closed mostly 5¢ to 7¢ higher.

KC HRW Wheat closed mostly 7¢ to 9¢ lower.

******************************

Major U.S. financial indices closed higher Monday, led by tech stocks.

The Dow Jones Industrial Average closed 87 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 156 points.

West Texas Intermediate Crude Oil futures (CME) closed narrowly mixed through the front six contracts.

******************************

“Regardless of other fundamentals, the price of replacement female beef animals has moved significantly higher in the last month. These transactions are on the order of 50% higher than this time last year for the same regions,” says Stephen Koontz, agricultural economist at Colorado State University, in a recent issue of In the Cattle Markets from the Livestock Marketing Information Center. “There is not much trade yet and this is a counter-seasonal trade. But there is some evidence of herd building albeit minor.”

In the meantime, Koontz says dwindling cattle numbers and high wholesale beef values make it unlikely for markets to succumb to typical seasonal pressure this fall.

“Boxed beef values are well above $300/cwt and the Choice-Select spread is $25/cwt. These are strong values compared to the current and past year and are also seasonally strong,” Koontz explains. “The crux of the immediate outlook is where will boxed beef values head and how hard will feedlot push? Currently, the feedlot cash return is excellent and has been for the past four months.”

Negotiated cash fed cattle trade ranged from slow on light to moderate demand to limited on light demand through Friday afternoon, according to the Agricultural Marketing Service.

For the week, FOB live prices were $1 higher in the Southern Plains at $180/cwt. and steady to $1 lower in the western Corn Belt at $183-$184. Prices in Nebraska the previous week were $182.

Dressed delivered prices were steady to $2 lower in Nebraska at $290 and steady in the western Corn Belt at $290.

Choice boxed beef cutout value was $1.24 higher Friday afternoon at $312.90/cwt. Select was 12¢ lower at $286.05/cwt.

Estimated total cattle slaughter for the holiday-shortened week of 559,000 head was 70,000 head fewer than the previous week and 47,000 head fewer year over year. Year-to-date estimated cattle slaughter of 22.4 million head was 986,000 head fewer (-4.2%) than the same period a year earlier. Estimated year-to-date beef production of 18.3 billion pounds was 964.2 million pounds less (-5.0%).

Cattle futures crept higher Friday, supported by the uptick in cash fed cattle prices and softer Corn futures.

Feeder Cattle futures closed an average of 36¢ higher, except for 22¢ lower in spot Sep.

Live Cattle futures closed an average of 42¢ higher, except for an average of 25¢ lower in the front two contracts.

Corn futures closed mostly 1¢ to 2¢ lower.

KC HRW Wheat closed mostly 4¢ to 5¢ lower.

Soybean futures closed 3¢ to 7¢ higher.

******************************

Major U.S. financial indices edged higher Friday, led by recent strength in crude oil.

The Dow Jones Industrial Average closed 75 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 12 points.

West Texas Intermediate Crude Oil futures (CME) closed 57¢ to 64¢ higher through the front six contracts.

******************************

Cash cattle prices are on the cusp of what is typically seasonal weakness, but snug number will likely dilute the impact.

“Cattle prices are trending higher in response to ever tightening cattle and beef supply fundamentals,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University is his marketing comments last week. “The beef cow herd on Jan. 1, 2023 was the lowest since 1962 and is still getting smaller. The projected 2023 U.S. calf crop is 2.5 million head smaller than the recent peak in 2018 and leads to an estimated July 1 feeder cattle supply down 3.6% year over year and the smallest since 2017.   Feedlot inventories have been smaller year over year since September 2022.”

The last week of August, regional calf and feeder cattle prices were 40% higher year over year with regional steer prices (600-700 pounds) ranging from $68.29/cwt. to $83.30 higher year over year, according to USDA’s National Weekly Feeder & Stocker Cattle Summary.

“Cattle prices have advanced quickly; in some ways faster than expected. The highest cattle prices will occur when herd rebuilding begins in earnest,” Peel explains. “The retention of heifers and reduced cow culling will squeeze feeder cattle supplies, cattle slaughter, and beef production to sharply lower levels. This process has not yet started and is expected to proceed rather slowly when it does begin. Herd rebuilding is expected to take three to four years or more… Cattle prices are expected to average higher through at least 2024 and 2025.” 

Cattle futures extended gains Thursday.

Feeder Cattle futures closed an average of $1.81 higher.

Live Cattle futures closed an average of 77¢ higher.

Corn futures closed mostly fractionally lower to 1¢ lower.

KC HRW Wheat closed mostly 8¢ to 12¢ lower.

Soybean futures closed 12¢ to 16¢ lower through Aug ‘24 and then 7¢ to 9¢ lower.

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Thursday afternoon with too few transactions to trend, according to the Agricultural Marketing Service. There were a few dressed delivered prices in Nebraska at $290/cwt.

Last week, FOB live prices were $179/cwt. in the Texas Panhandle, $178-$179 in Kansas, $182 in Nebraska and $183-$185 in the western Corn Belt.

Dressed delivered prices were $290-$292 in Nebraska and $290 in the western Corn Belt.

Choice boxed beef cutout value was $1.91 lower Thursday afternoon at $311.56/cwt. Select was $1.44 lower at $286.17/cwt.

******************************

Major U.S. financial indices closed mixed Thursday, following the previous session’s sharp losses tied to investor concerns about the potential for rising interest rates.

The Dow Jones Industrial Average closed 57 points higher. The S&P 500 closed 14 points lower. The NASDAQ was down 123 points.

West Texas Intermediate Crude Oil futures (CME) closed 48¢ to 67¢ lower through the front six contracts.

******************************

U.S. beef exports softened in July, posting the lowest volume since January, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). However, export value per head of fed slaughter still exceeded $400.

July beef exports totaled 103,167 mt, down 18% from a year ago and the lowest in six months. Export value was $810.4 million, down 19% and the lowest since February.

For January through July, beef exports trailed last year’s record pace by 11% in volume (772,343 mt) and 19% in value ($5.81 billion).

“It’s definitely a challenging environment on the beef side, due in part to limited supplies but also persistent headwinds in our key Asian markets,” according to Dan Halstrom, USMEF president and CEO. “Though it’s taking longer than anticipated, we still expect a broader foodservice rebound in Asia. And some bright spots for U.S. beef include sustained demand in Taiwan, especially for alternative beef cuts, and the continued momentum in Mexico. It’s also encouraging to see per-head export value maintaining a high level. This is an important metric for gauging the returns delivered by the international markets, even when our production is trending lower.”

Cattle futures basically tread water on Tuesday.

Feeder Cattle futures closed mixed, from an average of 33¢ lower in the front three contracts to an average of 19¢ higher.

Live Cattle futures closed an average of 19¢ higher, except for an average of 11¢ lower in the front two contracts.

Negotiated cash fed cattle trade ranged from limited on very light demand to a standstill through Tuesday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.

Last week, FOB live prices were $179/cwt. in the Texas Panhandle, $178-$179 in Kansas, $182 in Nebraska and $183-$185 in the western Corn Belt.

Dressed delivered prices were $290-$292 in Nebraska and $290 in the western Corn Belt.

Choice boxed beef cutout value was 99¢ higher Tuesday afternoon at $315.48/cwt. Select was 75¢ lower at $289.54/cwt.

Corn futures closed 4¢ to 6¢ higher through new-crop contracts and then mostly 1¢ to 2¢ higher, supported by expected reduction in crop ratings.

KC HRW Wheat closed mostly fractionally lower to 2¢ lower.

Soybean futures closed fractionally lower to 7¢ lower through Jly ‘24 and then mostly 5¢ higher.

******************************

Major U.S. financial indices closed lower Tuesday, pressured in part by rising oil prices fueled by Russia and Saudi Arabia extending voluntary production cuts.

The Dow Jones Industrial Average closed 195 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 10 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.14 to $1.31 higher through the front six contracts.

******************************

Agricultural producer sentiment dropped sharply in August, as measured by the monthly Purdue University/CME Group Ag Economy Barometer. The index declined 8 points month to month in August to 115, as the Current Conditions Index fell 13 points to 108. The Future Expectations Index was down 5 points to 119.

“Rising interest rates and concerns about high input prices continue to put downward pressure on producer sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “This month over half (60%) of the producers we surveyed said they expect interest rates to rise in the upcoming year.”

When asked about their top concerns for their farming operations in the next 12 months, producers continue to point to higher input prices (34% of respondents) and rising interest rates (24% of respondents). Even though crop prices weakened significantly this summer, only 20% of respondents chose declining commodity prices as one of their top concerns.

This month’s Ag Economy Barometer survey was conducted from August 14-18, 2023.

Cattle futures drifted lower Friday on pre-weekend positioning, sluggish trade and steady to softer cash fed cattle prices.

Feeder Cattle futures closed an average of $1.26 lower, except for $3.30 higher in newly minted away Aug.

Live Cattle futures closed an average of 41¢ lower, except for $1.00 higher in new away Feb.

Negotiated cash fed cattle trade was limited on light to moderate demand in all regions through Friday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.

Based on the latest established trade for the week, FOB live prices were steady to $1 higher in the Texas Panhandle at $179/cwt., steady to $1 lower in Kansas at $178-$179, $3 lower in Nebraska at $182 and $1-$2 lower in the western Corn Belt at $183-$185.

The five-area direct weighted average fed steer price through Thursday of last week was $182.69/cwt. on a live basis, which was $2.64 less than the previous week. The weighted average steer price in the beef was $2.03 lower at $290.62.

Choice boxed beef cutout value was 70¢ higher Friday afternoon at $314.49/cwt. Select was $1.04 higher at $290.29/cwt.

Estimated total cattle slaughter last week was 629,000 head, which was 3,000 head more than the previous week but 13,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 21.8 million head was 940,000 head fewer (-4.1%) than the same time last year. Estimated year-to-date beef production of 17.8 billion pounds was 925.6 million pounds less (-4.9%) year over year.

Turning to row crops, Grain and Soybean futures closed narrowly mixed Friday with some defensive positioning ahead of the long weekend.

Corn futures closed mostly 1¢ to 2¢ higher.

KC HRW Wheat closed mostly 5¢ lower.

Soybean futures closed mixed but mostly unchanged to 2¢ higher.

******************************

Major U.S. financial indices closed mixed Friday as investors closed the books on August.

The nation’s unemployment rate increased 0.3% in August to 3.8%, according to the U.S. Bureau of Labor Statistics, in the monthly Employment Situation Summary. That was higher than expected ahead of the report.

Total nonfarm payroll employment increased by 187,000 in August.

Average hourly earnings in August for all employees on private non-farm payrolls rose by 8¢ (0.2%) to $33.82. Over the past 12 months, average hourly earnings increased by 4.3%.

The Dow Jones Industrial Average closed 115 points higher. The S&P 500 closed 8 points higher. The NASDAQ was down 3 points.

West Texas Intermediate Crude Oil futures (CME) closed $1.37 to $1.92 higher through the front six contracts with follow through support from tighter supply expectations.

******************************

USDA’s Economic Research Service (ERS) forecasts cash receipts for farm commodities this year to be $41.4 billion less (-7.5%) than last year at $513.6 billion. This includes forecasted declines of $13.9 billion (-23.6%) in milk receipts and $11.6 billion (-12.6%) in corn receipts.

“In addition, production expenses are expected to increase by $14.8 billion (3.3%) to $458.0 billion in 2023,” ERS analysts explain. “Finally, direct Government payments to farmers are projected to fall by $3.5 billion (-21.6%) from 2022 to $12.6 billion in 2023, because of lower supplemental and ad hoc disaster assistance.

ERS forecasts inflation-adjusted U.S. net cash farm income (NCFI) — calculated as gross cash income minus cash expenses — to decrease by $60.5 billion (-28.9%) from 2022 to $148.6 billion in 2023.

More broadly, U.S. net farm income (NFI) — calculated as gross cash income minus cash expenses — is forecast to fall by $48.0 billion (-25.4%) from 2022 to $141.3 billion in 2023.

“NFI is a broader measure of farm sector profitability that incorporates noncash items including changes in inventories, economic depreciation, and gross imputed rental income,” ERS analysts explain. They note the projected decreases in 2023 come after both NCFI and NFI reached all-time highs in 2022.