What's in Store for 2024
What's in Store for 2024
We predict what might happen in 2024 and as normal, not all will occur.
We hope everyone had a very Happy New Year. As this goes into your Inbox on Tuesday, I am about ready to play golf with my son, his business partner and his wife in a Pro-Am on Maui on both Tuesday and Wednesday. The key goal for me is to contribute to the team and have fun.
Here is what we think may happen in 2024:
The Senate will likely switch to Republican control but just barely, while the House will likely switch to the Democrats. I have no clue who the next President will be. This means more deadlock in Congress which will affect some of the following projections.
A new Farm Bill will likely pass by June of 2024. If it gets delayed beyond that point, then it will be 2025.
The new Farm Bill will continue the current ARC and PLC programs; however, I don’t think there is enough funds to increase reference prices overall. There may be some tweakage as to how they are calculated among various crops, but overall, there is not enough extra funds for a material increase.
Crop insurance will continue to be enhanced especially for specialty crops. There may be a boost to SCO and ECO and perhaps some adjustments on crop insurance premium subsidies.
There is less than a 50% chance that any changes will be made to bonus depreciation. This means that for 2024 a farmer can only deduct 60% of their farm purchases and if they have a gain on trading farm equipment this will result in about an extra 35% gain compared to the old pre-2018 rules. This will get worse in 2025 and beyond.
The chance of any extension of the TCJA (Trump) tax cuts made in 2017 is slim or none in 2024. This is an election year and many times there are tax laws passed during the lame-duck session in December. However, since Congress is still split in the lame-duck session, we would not expect any extension during that time.
Drought may become a large issue in the Corn Belt and other parts of the country. There is little moisture trapped in the soil in many parts of the country, but enhancements to crop genetics have overcome some issues related to drought.
Brazil will continue to be the major exporter of corn and soybeans. Even if they have some drought conditions, they will still have a record crop and most of it will be exported.
SAF will be top of mind for ethanol producers. If the EPA and IRS issue new regulations allowing ethanol to easily qualify for the new SAF credits, then farmers may be in line to participate directly in that credit. However, farmers need to make plans now to participate.
I am sure that not all of these will happen in 2024, but this is our current projection for the year. We will keep you posted.
Now off to the first tee.