In its first estimates for farm sector income in 2025, the U.S. Department of Agriculture (USDA) is forecasting an increase in net farm income of almost +30% over 2024 while net cash farm income is seen climbing nearly +22%. However, a more than +355% rise in government farm payments, mostly in the form of disaster aid, masks expected declines in overall cash receipts that will leave most farmers juggling lower income on top of still elevated production expenses. The full report can be found HERE. https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances Below are some of the highlights:
Farm Sector Profits: Net farm income, a broad measure of profits, is forecast at $180.1 billion for 2025, $41.0 billion (+29.5%) higher than in 2024. Net cash farm income is forecast at $193.7 billion for 2025, an increase of $34.5 billion (+21.7%) relative to 2024 (not adjusted for inflation). In inflation-adjusted 2025 dollars, net farm income is forecast to increase by $37.7 billion (+26.4%) from 2024 to 2025, and net cash farm income is forecast to increase by $30.6 billion (+18.8%) compared with the previous year. If realized, both measures in 2025 would remain above their 2004–23 averages (in inflation-adjusted dollars) yet below their record high in 2022.
Lower Prices and Quantities Sold: In 2025, both falling prices and falling quantities sold are expected to result in lower forecast total cash receipts. Overall, cash receipts are forecast to decrease -$1.8 billion in 2025, with an estimated negative price effect of -$2.3 billion, and a projected negative quantity effect of -$0.8 billion. In addition, a net increase of +$1.3 billion in cash receipts is from commodity forecasts that have price and quantity effects that cannot be separately determined. Price effects on cash receipts are forecast to be negative for crop commodities but are projected to be positive for animals/animal products. Quantity effects are forecast to be negative overall for both crops and animals/animal products.
Crop Receipts: Crop cash receipts are forecast at $239.6 billion in 2025, a decrease of -$5.6 billion (-2.3%) from 2024 in nominal terms. Combined receipts for corn and soybeans are forecast to fall -$5.8 billion.
- Corn receipts are seen falling by -2.7 billion (-4.3%) due to forecasted declines in both prices and quantities sold.
- Falling prices in 2025 should outweigh slight growth in quantities sold for soybean receipts, which are forecast to decrease by $-3.1 billion (-6.6%).
- Forecasted lower prices and quantities sold should result in a decrease in wheat receipts of -$0.4 billion (-3.5%).
- For cotton, growth in quantities sold should outweigh falling prices, which are projected to increase by +$0.5 billion (+10.2%).
Animal/Animal Product Receipts: Total animal/animal product cash receipts are forecast at $275.4 billion in 2025, an increase of +$3.8 billion (+1.4%) in nominal terms from 2024 but a decline when adjusted for inflation. Although growth in receipts is forecast for most major animal/animal products in nominal terms, receipts for cattle and chicken eggs are projected to decline.
- Cash receipts from cattle and calves are expected to fall -$0.2 billion (-0.2%), as lower quantities sold should outpace growth in prices.
- Milk receipts are expected to increase +$1.4 billion (+2.7%) nominally in 2025 due to higher prices and quantities sold.
- Hog receipts are forecast to rise by +$1.5 billion (+5.3%), as prices and quantities sold are both expected to grow.
- Broiler receipts are expected to increase +$1.4 billion (+3.0%) in 2025, due to higher prices and quantities sold.
- Chicken egg cash receipts are expected to decrease by $0.6 billion (2.2%) in 2025, resulting from a forecasted decline in prices.
- Forecasted growth in prices should drive receipts for turkeys +$0.2 billion (+4.9 %) higher during the year.
Direct Government Farm Payments: Direct Government farm program payments are forecast at $42.4 billion for 2025, a +$33.1 billion increase above the $9.3 billion total forecast for 2024. This overall increase reflects higher anticipated payments from supplemental and ad hoc disaster assistance, mainly from the funding authorized in the “Disaster Relief Supplemental Appropriations Act” contained in the “American Relief Act, 2025.” Note that government payments discussed here do not include Federal Crop Insurance Corporation (FCIC) indemnity payments (listed as a separate component of farm income) and USDA loans (listed as a liability in the farm sector’s balance sheet).
- Supplemental and ad hoc disaster assistance payments in 2025 are forecast at $35.7 billion, and consist primarily of payments from the Disaster Relief Supplemental Appropriations Act of 2025. The act included the Economic Assistance for Producers and other payments related to losses due to natural disasters in 2023 and 2024. Except for 2024, supplemental and ad hoc disaster assistance has represented the largest category of direct Government payments since 2020.
- Farm bill commodity payments under the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs combined are forecast to more than triple in 2025, increasing +$1.1 billion relative to 2024. ARC payments are forecast at $865.3 million in 2025, and PLC payments are forecast at $729.1 million. The ARC program provides income support payments when actual crop revenue declines below a specified level. The PLC program provides income support payments when the effective price of a covered commodity falls below its effective reference price.
- Conservation payments from the financial assistance programs of USDA’s Farm Service Agency and Natural Resources Conservation Service (NRCS) are expected to be $5.1 billion in 2025, an increase of $662.6 million (15.1 percent) from the 2024 level. The increase in conservation payments is due to an increase in payments from NRCS programs, including payments from the Inflation Reduction Act funds allocated for USDA’s conservation programs.
- The Dairy Margin Coverage Program (DMC) is forecast to make $68.0 million in payments in 2025, which is -$8.9 million lower than in 2024 due to higher projected milk prices in 2025.
Production Expenses: Farm sector production expenses, including expenses associated with operator dwellings, are forecast at $450.4 billion in 2025. The 2024 expense measure is forecast to have decreased by -$9.0 billion (-2.0%) compared with 2023. Expenses are forecast to further decrease by -$2.5 billion (-0.6%) in 2025. Spending on feed, labor, and livestock/poultry purchases are expected to represent the three largest categories of spending in 2025.
- Feed expenses, the largest single expense category, are forecast at $69.4 billion in 2024 and $62.4 billion in 2025, falling to the lowest level in real terms since 2007.
- Labor expenses (including noncash employee compensation) are forecast to be a record high in 2025, rising +$2.9 billion (+5.9%) in 2024 to $51.7 billion. They are forecast to rise by an additional +$1.8 billion (+3.6%) to $53.5 billion in 2025.
- Livestock and poultry purchases are also projected to be at a record high. The 2024 forecast includes growth by +$4.5 billion (+10.4%) to $47.4 billion. Growth is forecast to continue albeit at a slower rate in 2025, with an expected increase of +$3.1 billion (+6.5%), which put them at a record-high $50.5 billion.
- Seed expenses are projected to rebound in 2025, after a -$0.7-billion (-2.6%) decline projected for 2024. In 2025, the expenses are forecast to increase by +$1.1 billion (+4.2%) to $27.7 billion. Both the decline in 2024 and the increase in 2025 are largely explained by projected changes in planted acreage.
- Fertilizer expenses are expected to continue a declining trend from 2022, with an additional- $3.6-billion (-11.1%) decline to $29.2 billion.
- Pesticide expenses (spending on agricultural chemicals and application costs) in 2025 are expected to continue the decreasing price trend that started in 2022, driving pesticide expenses down by -$1.2 billion (-6.0%) to $18.1 billion.
