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USDA Lowers Farm Income Forecast but Remains Strong

USDA Lowers Farm Income Forecast but Remains Strong


By Andi Anderson

The U.S. Department of Agriculture has lowered its 2025 farm income forecast, citing weaker crop sector earnings. However, both net cash farm income and net farm income remain above 2024 levels, thanks largely to government support and strong livestock markets.

According to the USDA’s Economic Research Service, net cash farm income is projected at $180.7 billion for 2025. This represents a 25.3% increase from 2024 when adjusted for inflation, though it is lower than the February forecast of $193.7 billion.

Net farm income, a broader measure of profitability, is forecast at $179.8 billion, a 37.2% increase from 2024, but slightly below February’s estimate of $180.1 billion.

Government payments are expected to play a significant role in this year’s income. Direct payments are projected at $40.5 billion, the highest since 2020.

This includes funding from the Emergency Commodity Assistance Program and the Supplemental Disaster Relief Program, as well as increased conservation program payments.

Production expenses are also rising. Farmers and livestock producers are forecast to spend $467.4 billion in 2025, an increase of $12 billion or 2.6% over 2024.

Feed costs are down compared to recent years, but livestock purchases and labor expenses continue to climb, with labor costs reaching $54.3 billion, nearly $12 billion higher than in 2022.

Farm debt remains a concern, with total sector debt expected to rise to $591.8 billion in 2025, up nearly 20% since 2022. Interest expenses are projected at $33.1 billion, reflecting higher borrowing costs since the Federal Reserve began raising interest rates.

While the forecast highlights ongoing challenges such as rising costs and debt, analysts note that overall farm income remains above the 20-year average. Strong livestock earnings and government assistance continue to support the farm economy in 2025.

Photo Credit: usda

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Categories: Illinois, Government & Policy

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