USDA’s latest farm income forecast points to a 40% increase in net farm income in 2025 compared to 2024. On the surface, this may sound promising after several hard years – but a closer look reveals another deeply challenging year for the men and women that feed, fuel, and clothe our nation. Beyond the numbers are producers across the country who are looking at a record crop in a sea of red ink and sitting in the eye of the “perfect storm” – a term Secretary Rollins recently used when addressing the current state of the agricultural economy.
Government Payments in the Farm Income Forecast
USDA’s farm income report shows direct government payments are projected at $40.5 billion in FY 2025. Nearly 90 percent of this total is supplemental or ad-hoc payments designed to compensate for the deep losses producers endured in 2023 and 2024. Only a little over one percent will come from Farm Bill commodity programs. These dollars are not profit; they are relief to help, in part, aid in past losses felt due to production and economic losses.
Expert economists and friends of Farm Policy Facts, Dr. Bart Fischer and Dr. Joe Outlaw, summed it up well in a recent Southern Agriculture Today article:
“…[W]e’ve never met a farmer who preferred getting their income from the government…and they can’t wait to break this cycle of praying to simply break even.”
Commodity Prices Down and Input Costs Up
According to the USDA’s latest report, crop cash receipts are forecast to decline by $12.3 billion in 2025. In nominal terms, major crop receipts are down 5.6%, and when compared to the five-year average, down nearly 13%.
Meanwhile, production expenses are expected to increase again in 2025, adding to the squeeze. High costs for fuel, fertilizer, equipment, and interest expenses continue to erode thin margins.
The bottom line? When considered alongside rising costs and declining crop receipts, the farm economy remains under severe strain.
Many key improvements to the farm safety net were made through the “One Big Beautiful Bill” Act this summer: increased reference prices, enhancements to crop insurance, tax relief, and more.
However, many of these improvements won’t be felt at the farm gate until the fall of 2026.
With a potential record-breaking crop already underway in some portions of the countryside, limited storage capacity, and years upon years of losses, we urge key officials to come to the table to weigh the path forward for emergency assistance for America’s farm and ranch families.
Food security is national security – and with the stakes this high, we simply can’t afford to fail.
Need a Farm Bill refresher? Find a high-level, title-by-title history and overview of this crucial piece of legislation that impacts every American, from the field to the dinner plate here. Plus, learn about agricultural policy straight from America’s heartland on the Groundwork podcast.