Not sure I agree with all of this, but I guess it’s based on a larger crop, higher livestock prices, and more government payments…
In a new update, USDA says net farm income, a broad measure of profits, is forecast at $179.8 billion for calendar year 2025, an increase of +$52.0 billion, or +40.7% relative to 2024 in nominal (not adjusted for inflation) dollars. After adjusting for inflation, net farm income in 2025 is forecast to increase by +$48.8 billion (+37.2%) in 2025 relative to 2024. USDA’s previous forecast in February showed net farm income rising to $180.1 billion, which it said at the time was an increase of +$41 billion, or +29.5% over 2024. The difference seems to come from the USDA downwardly adjusting its estimates for 2024. In February, it estimated net farm income at $139.1 billion versus a new estimate of $127.8 billion. Below are other key details from the latest “ Farm Sector Income Forecast.”
Net Cash Farm Income Up Over +28%: Net cash farm income, which is intended to better reflect annual cash flow by excluding inventory changes and depreciation, is forecast at $180.7 billion for 2025, an increase of $40.1 billion (+28.5%) relative to 2024 (not adjusted for inflation). When adjusted for inflation, 2025 net cash farm income is forecast to increase by +$36.5 billion (+25.3%) from 2024. If the forecast is realized, net cash farm income in 2025 would rise above its 2005–24 average. The previous forecast pegged net cash farm income in 2025 at $193.7 billion, which the USDA said at that time was an increase of +$34.5 billion, or +21.7%, from the previous year. The discrepancy again stems from an adjustment to 2024 estimates. USDA in February estimated 2024 net cash income at $159.2 billion but lowered it to $140.6 billion in the most recent update.
Falling Prices and Quantities to Shrink Crop Receipts While Livestock Gains: Overall, farm cash receipts are forecast to increase by +$24.0 billion (+4.7 percent) from 2024 to $535.2 billion in 2025 in nominal dollars. Total crop receipts are forecast at $236.6 billion in 2025, a decrease of -$6.1 billion (-2.5%) from 2024 in nominal terms, following lower receipts for soybeans, corn, and wheat. Conversely, total animal/animal product receipts are projected to increase by +$30.0 billion (+11.2%) to $298.6 billion in 2025. Receipts for cattle, eggs, hogs, broilers, and turkeys are forecast to rise relative to 2024.
- Corn receipts are expected to fall by -$2.3 billion (-3.7%) in 2025, primarily due to lower prices.
- Soybean receipts are forecast to decrease by -$3.4 billion (-7.2%).
- Wheat receipts are forecast to fall -$1.1 billion (-9.8%), due to lower prices and quantities sold.
- Falling prices and quantities sold are expected to result in a decline of -$0.5 billion (-14.8%) in rice receipts during the year.
- Receipts for hay are projected to fall by -$0.2 billion (-2.5%) in 2025, while cotton receipts are expected to remain near 2024 levels.
- Cash receipts from cattle and calves are expected to increase +$17.7 billion (+15.7%), due to sustained growth in prices only partially offset by lower quantities.
- Hog receipts are also forecast to rise by +$2.6 billion (+9.5%) due to higher prices in 2025.
- Milk is the one major exception to rising animal product prices. Milk receipts are expected to fall -$0.5 billion (-1.0%) nominally in 2025.
- Broiler receipts are expected to increase +$1.6 billion (+3.5%) in 2025.
- Cash receipts for chicken eggs are projected to grow by +$7.5 billion (+35.4%).
Production Expenses to Climb Slower in 2025: Farm sector production expenses are forecast at $467.4 billion in 2025, increasing by +$12.0 billion (+2.6%), compared with 2024. When adjusted for inflation, the expenses are projected to be comparable to their 2024 levels (increasing slightly by +$0.3 billion or +0.1% compared with 2024). As is typical, spending on feed, livestock/poultry purchases, and labor are expected to represent the three largest categories of spending in 2025.
- Feed expenses, the largest single expense category, are forecast at $68.6 billion in 2025, falling by -$4.6 billion or -6.2% compared with 2024.
- Livestock and poultry purchases are projected at $59.9 billion, rising by +$10.6 billion or +21.5% compared with 2024.
- Labor expenses are forecast at $54.3 billion, rising by +$2.2 billion (+4.2 %) compared with the 2024 level. Labor expenses here include both cash and noncash employee compensation.
- Among other categories of spending, pesticide expenses (spending on agricultural chemicals and application costs) and fuel and oil expenses are forecast to fall in 2025 relative to 2024, while interest expenses and net rent are forecast to rise. All values and calculations are in nominal dollars.
Direct Government Farm Payments Forecast To Increase in 2025: Government payments, which does not included Federal Crop Insurance Corporation (FCIC) indemnity payments and USDA loans, are forecast at $40.5 billion for 2025, a $30.4 billion increase from the $10.1 billion total 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, 2025 contained in the American Relief Act, 2025.
Supplemental and ad hoc disaster assistance payments in 2025 are forecast at $35.2 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.
- Conservation payments from the financial assistance programs of USDA’s Farm Service Agency and Natural Resources Conservation Service (NRCS) are expected to be $4.8 billion in 2025, an increase of $446.3 million (10.3 percent) from the 2024 level. The increase in conservation payments is due to an increase in payments from NRCS programs.
- Farm bill payments that are a function of commodity prices are forecast at $550.4 million for 2025, largely unchanged from 2024. Payments under the Agriculture Risk Coverage (ARC) and Dairy Margin Coverage programs are forecast to decrease, while payments from the Price Loss Coverage (PLC) program are forecast to increase relative to 2024.
