Farm income expected to be up for 2025

Farm income is expected to be above 2024’s level, but this year the increase was tied to record livestock prices and government payments.

Net cash farm income was set at $180.7 billion and net farm income was $179.8 billion, according to Carrie Litkowski, a senior economist in the resources and rural economics division with the U.S. Department of Agriculture’s Economic Research Service. She provided an update Sept. 3.

In 2024, net cash farm income was about $141 billion, meaning the 2025 estimate is 28% higher. In terms of net cash farm income, it reached a record high in 2022 at $207.1 billion, then fell 28% in 2023 and another 12% in 2024.

Litkowski noted that total production expenses were expected to increase $12.6 billion to $467.4 billion, which was a 2.6% increase over 2024.

Also, net farm income was set for $179.8 billion in 2025. In 2024 it was $127.8 billion.

Government payments to farm operators are forecast to increase by about $30 billion to reach $40.5 billion in 2025, she said, as a result of supplemental and ad hoc disaster assistance to farmers and ranchers from the American Relief Act in 2025 for disaster assistance. Payments do not include USDA loans and insurance indemnity payments made by the Federal Crop Insurance Corporation.

Overall cash receipts are the largest source of income, she said.

Animal and animal products from most commodity groupings are forecast to be higher in 2025 with cattle expected to increase for the fifth year in a row.

“They are forecast to increase 13%, almost $15 billion, from 2024 levels to reach what would be a record high $130 billion,” Litkowski said.

Feed costs were expected to decline about 6% for 2025, or almost $5.1 billion, as a result of lower prices for feed grains.

Total crop receipts are forecast to decrease by $6.1 billion (2.5%) from 2024 levels to $236.6 billion in 2025 following lower receipts for corn, soybeans and wheat, which would put crop receipts at the lowest level since 2007. Corn was expected to decline 6%, while soybean receipts are forecast to decline 9% and wheat at 12%. However, receipts for nuts and fruits are forecast to increase nearly 4%, or $1.2 billion, in 2025.

In 2025, spending on pesticides, fuels and oils were also forecast to drop, she said.

The balance sheet for farms and ranches is expected to have a growth of 2% for 2025, which is below the average annual growth rate of 2.8% over the past 20 years, she said.

USDA-ERS put out its first 2025 estimate in February and she noted a modest increase in animal and animal products was figured but have been revised upward, she said. For crop producers, the USDA-ERS projected lower input expenses, but in fact based on information since then production expenses were up.

Michael Langemeier, director with the Center for Commercial Agriculture with Purdue University, said in his newsletter that after two strong net farm income years in 2021 and 2022, net farm income has been below average.

“Current projections for 2025 and 2026 suggest that net farm income will remain below average through at least 2026,” Langemeier said. “Low net farm income has a large impact on repayment measures.”

He also noted the difference is U.S. price received between crop and livestock enterprises is historically wide.

He illustrated an example case of a 3,000-acre corn-soybean farm in western Indiana where the farmer owns 30% of his land and has multiple landlords with a fixed cash rent arrangements with strong liquidity solvency and above-average financial performance. After averaging over $325 per acre in 2021 and 2022, net farm income per acre dropped to $115 in 2023 and was negative in 2024. Net farm income per acre is expected to remain negative for 2025 and 2026, putting a strain on the farm’s ability to cover operator and family labor, repay debt, and replace machinery.

The U.S. farm sector includes nearly 2 million farms and ranches that cover about 900 million acres of land, Litkowski said. About half of the operations are considered arm businesses and account for more than 90% of the total value of agriculture production in the U.S.

Dave Bergmeier can be reached at 620-227-1822 or [email protected].