ARLINGTON, VA. - Farm income will increase in 2025 compared to last year due to expected government relief payments to producers. This is according to Carrie Litkowski, senior economist for the United States Department of Agriculture’s (USDA) Economic Research Service, who said that despite the projected rise in average farm wealth, corn receipts are projected to decline by seven percent and soybeans by nine percent in 2025.

“Most of the expected increase in net farm income will come from direct payments to farmers,” said Litkowski, who described the latest USDA farm sector income and wealth forecasts through 2025 during her presentation at the USDA Agricultural Outlook Forum, held February 27-28 in Arlington, Virginia, and online.

“We are forecasting that farm sector profits will increase in 2025. Net cash farm income is forecast to increase about 22 percent, and net farm income to increase almost 30 percent. However, when we look at total cash receipts from agricultural commodity sales they are expected to decline slightly — almost $2 billion,” Litkowski said. “So, most of the forecast increase in net income or net profits is coming from  direct government payments, which are forecast to increase by $33 billion in 2025.”

Also supporting higher projected farm income for 2025 are total production expenses, which are forecast to fall by $2.5 billion. In addition, USDA’s U.S. Farm Sector balance sheet shows that farm sector assets and equity are both expected to increase by around four percent in 2025. 

Farms with a gross income of $350,000 or more are expected to realize an 11 percent increase in income in 2025, according to ERS calculations, while median total farm household income is projected to increase by five percent. 

“We saw net farm income and net cash farm income reach record highs (in 2022), and it has fallen since. But it is forecast to increase in 2025. Net farm cash income — income from cash receipts, cash farm-related income, government payments, less cash production expenses — is forecast to have decreased slightly in 2024, and then increase about 19 percent, or $31 billion (to $180.1 billion) in 2025,” said Litkowski. “Net farm income, a more comprehensive measure of income that includes some non-cash items, is forecast to have decreased about eight percent in 2024, and then to fall another 26 percent in 2025.”

Drivers behind USDA’s forecast for an increase in net farm income for 2025 include the combined value of production for crops, which is forecast to increase by $4.4 billion on the assumption that farmers will sell less of their inventory of crops than in 2024. For animal and animal product receipts, the value of cash receipts are forecast to increase by 3.8 percent with a small adjustment for animal inventory change. In addition, production expenses for animal agriculture are expected to decrease by $2.5 billion, contributing to higher farm income.  

Adding in the projected $33 billion increase in government payments to farmers, USDA predicts a nominal increase of $41 billion in 2025 net farm income, or almost 30 percent, over 2024. Calendar year total cash receipts, the largest source of income for farmers, reached an all-time high in 2022 but will continue to decline in total through 2025, according to Litkowski.

“Specifically, we forecast that (total cash receipts) fell about two percent in 2024, and will fall another three percent in 2025,” she said. “This would put total cash receipts at their lowest level since 2020.”

Crop cash receipts are projected to fall by 11 percent in 2024 and another five percent this year, according to USDA calculations, putting total crop cash receipts at their lowest level since 2019. For animal and animal products, total cash receipts increased by six percent in 2024 and will remain relatively stable during 2025, USDA predicts. 

Corn and soybean combined cash receipts are expected to decline throughout 2025, driving most of the projected decrease in total crop cash receipts. Corn, specifically, is expected to drop by around seven percent, or $4 billion in 2025, while soybean cash receipts will drop by around nine percent, or $4 billion. “For both of these commodities it would be the third consecutive year of declining receipts,” Litkowski said.

Direct government payments can include regular program payments as well as ad hoc, emergency relief payments. In 2020, an all-time high in direct government payments to farmers was achieved, largely due to pandemic-related relief programs. Government payments have declined in each ensuing year, though USDA sees an increase on the horizon for 2025, with most of the rise expected to come through supplemental or ad hoc disaster assistance.  

“Most of that increase is coming from payments that were appropriated in the American Relief Act of 2025, and that included economic assistance for producers as well as other payments related to losses that occurred in 2023 and 2024,” said Litkowski. “In total, government payments are forecast at $42 billion in 2025, an increase of $33 billion with inflation adjusted.”

The farm outlook presentation was moderated by Jackson Takach, chief economist and VP of strategy, research, and analytics for Farmer Mac. It included a segment that explored recent trends and issues affecting agricultural lending and credit conditions, including interest rates and farm real estate values. Another segment looked at energy payments made to farmers for the production of oil, natural gas, and wind energy on their land.

To view the archived presentation in its entirety, visit www.eventmobi.com/usdaoutlookforum2025.