USDA Trims Farm Income Forecast Amid Crop Market Slump

The Agriculture Department is lowering its forecast for farm earnings in 2025 as declines in the crop sector more than offset soaring incomes for cattle producers. 

Net cash farm income, a measure of producers’ cash flow, is forecast at $180.7 billion for 2025, an increase of $36.5 billion, or 25.3%, over last year when adjusted for inflation, according to the forecast issued by the Economic Research Service on Wednesday. In February, USDA had forecast net cash farm income for 2025 at $193.7 billion.

Net farm income, a broader measure of profits, is forecast at $179.8 billion for 2025, an increase of $48.8 billion, or 37.2%, over 2024 when adjusted for inflation. February’s forecast was for net farm income of $180.1 billion.

Even with the lower numbers, both the estimates for net farm income and net cash income this year are above the 20-year average, largely due to an influx of government payments to row crop producers.

Net cash farm income is based on cash receipts from farming, plus government payments and other farm-related income, minus cash expenses. Net farm income also factors in depreciation and changes in inventory values.

USDA estimates that direct government payments to producers will hit $40.5 billion this year, a $30.4 billion increase from last year, and the largest amount since the pandemic year of 2020. The total for this year includes an influx of government aid approved by Congress last December. Congress is considering providing another tranche of emergency assistance before the end of the year to compensate producers for the impact of President Donald Trump’s trade policy.

Supplemental and ad hoc disaster assistance payments are expected to total $34.2 billion this year.

Farm cash receipts are forecast to increase this year by 4.7%, not adjusted for inflation, but that number masks the stark difference in conditions of the crop and livestock sectors.

Total cash receipts are expected to fall by 2.5%, not adjusted for inflation, while receipts form livestock products rise by 11.2%.

Corn receipts are projected to drop 3.7%, not adjusted for inflation, while soybean receipts are estimated to drop 7.1% and wheat receipts are projected to fall 9.8%.

By contrast, cash receipts from cattle and calves are forecast to increase by 15.7%, while sales in the hog sector are estimated to increase by 9.5%.

Farm sector production expenses are estimated to be $467.4 billion this year, about the same as last year when adjusted for inflation. Labor costs are expected to be 4.2% higher, while spending on feed, pesticides and fuel are expected to be lower. 

This article was originally published by Agri-Pulse. Agri-Pulse is a trusted source in Washington, D.C., with the largest editorial team focused on food and farm policy coverage.