This two-page spreadsheet provides a quick analysis of 2024 grain farm data for 99 farms participating in the Pennyroyal area of the Kentucky Farm Business Management program.

The 2024 crop year was challenging for KFBM grain farms in the Pennyroyal (PFAG) region of Kentucky. There were several contributing factors.

Crop Yields and Performance

Crop yields varied by county but were generally close to 5-year averages:

• Corn: 194 bushels/acre (vs. 186 five-year average)
• Full season soybeans: 46 bushels/acre (vs. 52 five-year average).
• Wheat: 81 bushels/acre (vs. 83 five-year average)
• Double crop soybeans: 43 bushels/acre (vs. 48 five-year average)
• Todd County had the highest corn yields (206 bu/ac) while Trigg County had the lowest (177 bu/ac).

Financial Performance

2024 was financially difficult for  grain farms. 

Income fell

• Average net farm income was negative $6,331, a dramatic decline from previous years. This represents a stark contrast to 2022-2023 when farms averaged more than $400,000 in net income.
• 46% of farms had negative net farm income, with 24% losing over $200,000.
• Only 24% of farms achieved positive net income above $200,000.

Crop returns per acre also declined

• Average crop returns were $821 per acre in 2024, down from $1,054 in 2023.
• Only 37% of farms achieved returns above $800 per acre.
• 34% of farms had returns below $600 per acre.

Farm Structure and Costs

Average farm size was 2,574 tillable acres; 22% are larger than 4,000 acres while 31% are under 1,000 acres.

Land tenure: 26% owned, 54% cash rent, 20% crop share.

Average cash rent: $206/acre. This has been steady for the past three years.

Operating expenses consumed 85% of gross income, indicating tight profit margins. Key cost categories per acre indicate a decline from the past two years but are well above historical levels.

• Seed, chemicals, and fertilizer averaged $367 per acre
• Machinery costs were $249 per acre

Market Conditions

Commodity prices fell significantly in 2024. New crop corn fell from $4.99 to $4.16/bushel, soybeans from $13.31 to $10.30/bushel, wheat: $5.90/bu (down from $6.97 in 2023)

Financial Health Indicators

The financial ratios suggest solid solvency with a 24% debt-to-asset ratio, though returns were negative in 2024 (-0.4% return on assets). Net farm income ratio was negative 3%. 

The data reflects the volatility of grain farming, with 2024 representing a significant downturn after several profitable years. 

Family Living Expenses Summary

The 2024 Kentucky family living data reveals significant lifestyle differences based on farm profitability. High-performing farms spent nearly 10 times more on expendables ($117,217 vs. $12,019) than low-performing farms, while low-performing farms actually spent more on capital expenses, suggesting different spending priorities during financial stress.

Average net farm income for these farms was $23,088.  Net non-farm income was $53,094, more than twice farm income.  Total annual family living expense was $100,358, 32% more than farm and non-farm income combined.

Income disparity between High- and Low-performing farms is substantial:

• High-performing third of farms: $9,783 net farm income, $166,885 total living expenses.
• Low-performing third of farms: -$34,866 net farm loss, $38,984 total living expenses.

Major expense categories for average families:

• Expendables (food, clothing, utilities, etc.): $66,755 (67% of total expenses)
• Income and Social Security taxes: $35,519
• Capital expenses: $10,971
• Medical expenses: $9,809
• Contributions: $7,710
• Life insurance: $5,114

Key Takeaways

1. Market correction impact: 2024 represented a significant market correction after the historically high commodity prices of 2020-2022.
2. Cost-price squeeze: While input costs decreased from their peaks, they remained elevated relative to the falling commodity prices, creating margin pressure.
3. Financial stress indicated: With 46% of farms showing negative returns and something fewer than 15% experiencing the 2022 average net farm income, many operations likely faced cash flow challenges.
4. Recovery needed: The five-year averages suggest 2024 was an outlier year, but farms will need improved commodity prices, reduced input costs, or both to return to profitability.