Global events have had a drastic impact on the state's largest industry, but farm revenues in Missouri were estimated to hit a record high in 2021 with another steady year expected to follow.
Farm income for the Show-Me State is expected to reach $4.19 billion for 2022, down slightly from nearly $4.3 billion estimated for last year. John Kruse, an associate research and extension professor in agricultural and applied economics at the University of Missouri, said income was far outpacing numbers reported over the past decade.
"It's not often when there are back-to-back record years for Missouri farm income, but the data suggests 2021 set a new record for Missouri farm income at $4.27 billion, and 2022 appears to be close behind at $4.19 billion," Kruse said in a statement. "The last time Missouri farmers saw income levels this strong was in 2013 and '14."
Those years saw $4.02 billion and $4.09 billion in income, respectively.
Kruse presented this data in a report on farm income outlooks in Missouri for 2022 at the recent Abner Womack Missouri Agriculture Outlook Conference. The report was based on current estimates from the U.S. Department of Agriculture and noted the impact of world events on the market, from supply concerns to price increases.
Soybeans are projected to far outpace other crops in terms of acres of crops and price, with around 6 million acres expected for 2022 at around $13 a bushel. Corn, meanwhile, is expected at around 3.5 million acres and $4.50 a bushel.
The record income is also expected to be halfway offset by increased feeding prices and livestock costs. Livestock prices have remained higher than expected for the first quarter of the year, however, which Kruse said would likely bolster the year's income.
Livestock receipts for 2021 were estimated to be up by around $1.3 billion statewide despite beef cow numbers dropping by more than 6 percent from the beginning of 2021 to 2022 and breeding hog inventory dropping 2.3 percent.
Rising prices across the globe have largely spurred the growth in income, Kruse said. Also, 30 percent of the U.S. wheat crop is reportedly in good condition compared to 53 percent last year, while droughts in Canada reduced canola production by 35 percent and South America's soybean crop has been impacted by its own droughts. Europe and the southwestern portion of the U.S. are also grappling with dry conditions.
Data also extended to county-specific numbers. Cole County produced 676,000 bushels of corn and grain in 2021 according to current estimates, also producing 502,000 bushels of soybeans and more than 77,000 cattle. Monetary values for these yields were not available in the data.
The MU Extension Cole County office did not respond to a request for comment on local statistics.
The war in Ukraine is also expected to have an impact on the market, Kruse said, likely reducing corn, wheat and sunflower product exports from Ukraine for the year and possibly for years to come. Sanctions on Russia could also raise energy and fertilizer supply prices for the next several years.
Several crops, including oil seed, wheat and corn stocks remain tight, while rice stocks are the only ones to remain above a 30-year average. Kruse said prices will likely remain volatile as global situations develop.
Governmental assistance for farmers, meanwhile, has decreased. Total government payments were estimated to have dipped to $0.4 billion, a continued decrease from $0.8 billion in 2021 and $1.5 billion in 2020 amid the pandemic.
He also said basis levels -- the difference between a cash price and a future price for a commodity -- were widening, suggesting prices at the national or international level may not be adequately represented locally.
"The strength in farm income occurs even as ad hoc government payments are significantly reduced from 2020 levels," he said. "Stronger 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, interest, etc."
Kruse encouraged farmers to pursue other revenue opportunities from the federal government, including USDA's Climate Smart Commodities program. Announced in February, the program sees the department financing one- to five-year pilot programs that provide technical and financial assistance to producers using climate-efficient practices and reporting and marketing the resulting products.
According to USDA statistics, Missouri ranked 12th in the U.S. for gross farm receipts in 2020.
Official USDA net farm income estimates for 2021 won't be available until November, according to the release.
Agriculture is the state's largest industry worth $93.7 billion, according to the Missouri Department of Agriculture.