The USDA reports overall farm expenses are projected to drop nearly 2% to $453.9 billion in 2024. This was due to declining feed, fertilizer, pesticide and fuel costs.

However, other costs surged. Labor expenses are expected to rise 6% to $51.8 billion. Livestock and poultry purchases are projected to experience a 10% increase to $47.4 billion. This marks the largest dollar growth among expenses.

Property taxes climbed by nearly $2 billion, while interest costs increased $1.3 billion. Rent costs remained stable.

Despite lower input costs, farmers’ profit margins are tight as net farm income is forecast to drop by $9.5 billion. This is a 6% inflation-adjusted decrease from 2023.

The USDA Economic Research Service shares this is partially due to reduced government farm program payments, particularly from the Dairy Margin Coverage Program and disaster assistance.

Read more about 2024 farm expenses here.