Recent data from the U.S. Department of Agriculture’s National Agricultural Statistics Service and Economic Research Service provides a comprehensive look at water management practices and financial trends in the U.S. agricultural sector.
The findings, published in the 2023 Irrigation and Water Management Survey and the 2024 Farm Sector Income Forecast, highlight notable changes in irrigation usage, input costs and farm income, offering valuable context for stakeholders across the industry.
The 2023 Irrigation and Water Management Survey reports that 212,714 farms irrigated 53.1 million acres in 2023, a decline from 231,474 farms and 55.9 million acres in 2018. Total water applied also decreased, from 83.4 million acre-feet in 2018 to 81 million acre-feet in 2023, marking a 2.8% reduction. Despite these changes, the average water application rate per acre remained steady at 1.5 acre-feet, suggesting that irrigation efficiency has not changed significantly during this period.
The survey shows that cropland — used for grain and oilseed crops, vegetables, nursery and greenhouse products, and hay — continues to make up the largest share of irrigated farmland, with 49.6 million harvested acres irrigated in the open in 2023. Groundwater from on-farm wells accounted for 54% of the irrigation water applied to acres in the open, while surface water sources made up the remainder. On average, wells used for irrigation reached a depth of 241 feet.
Regional disparities in irrigation practices are evident in the data. Five states — Arkansas, California, Idaho, Nebraska and Texas — accounted for about half of all irrigated acres and more than half of the total water applied nationwide. These states are key drivers of irrigated agriculture, with operations shaped by unique water availability, climate conditions and crop needs.
The survey reveals a continued preference for sprinkler irrigation systems, which accounted for 12.6 million more irrigated acres than gravity systems in 2023. This aligns with broader trends favoring systems that offer greater control over water distribution and efficiency.
Farmers and ranchers invested $3 billion in irrigation equipment, facilities and land improvements in 2023, underscoring the ongoing need for capital to maintain and improve irrigation infrastructure. In addition to equipment, energy costs for pumping well and surface water totaled $3.3 billion in the same year, reflecting the significant financial commitment required to support irrigated agriculture.
The report also notes that irrigated horticulture under protection grew to 1.7 billion square feet in 2023, compared to 1.5 billion square feet in 2018. This expansion highlights the growing role of protected agriculture in meeting consumer demand for high-value crops.
The 2024 Farm Sector Income Forecast offers a detailed look at the financial health of U.S. agriculture. Net farm income, a broad measure of profitability, is forecast to decline by $6 billion (4.1%) to $140.7 billion in 2024, following a steeper drop of $35.3 billion (19.4%) in 2023. Similarly, net cash farm income is projected to decrease by $1.8 billion (1.1%) to $158.8 billion in 2024.
When adjusted for inflation, these declines represent a 6.3% reduction in net farm income and a 3.5% drop in net cash farm income compared to 2023. Despite these decreases, both measures remain above their 20-year averages in inflation-adjusted terms.
The financial picture varies significantly across commodities. Crop cash receipts are forecast to decline by $25 billion (9.2%) in 2024, driven largely by lower prices for corn and soybeans. Combined, these two crops are expected to account for a $23.5 billion drop in receipts. Other crops, such as cotton and hay, are also forecast to see lower receipts, while vegetable and melon receipts are projected to increase by $1.7 billion (6.7%).
In contrast, animal and animal product receipts are expected to rise by $21 billion (8.4%) in 2024. Higher prices for milk, cattle and chicken eggs are driving this growth, with milk receipts projected to increase by $5.3 billion (11.5%) and cattle receipts by $7.3 billion (7.2%).
Total production expenses, including those associated with operator dwellings, are forecast to decrease by $8 billion (1.7%) to $453.9 billion in 2024. This reduction is largely attributed to lower costs for feed, fertilizer and fuel. Feed expenses, the largest single expense category, are expected to decline by $10.5 billion (13.2%) in 2024. Fertilizer expenses are projected to drop by $3 billion (8.4%), reflecting lower prices for these inputs.
However, not all expense categories are declining. Labor costs, including cash labor and noncash employee compensation, are forecast to rise by $3 billion (6.1%) to $51.8 billion in 2024. Livestock and poultry purchases are also expected to increase by $4.4 billion (10.2%) to $47.4 billion.
The USDA data provides a valuable snapshot of the state of American agriculture, highlighting key trends in water use, irrigation practices and financial health. These insights can inform decision-making for farmers, policymakers and industry stakeholders as they navigate ongoing challenges and opportunities in the sector.
For more information, the full results of the 2023 Irrigation and Water Management Survey and the 2024 Farm Sector Income Forecast are available on the USDA’s website.
Luke Reynolds is the associate director, government and public affairs at the Irrigation Association.
