The United States Department of Agriculture (USDA) has forecast a 0.7% decrease in U.S. net farm income for the current year. This decline occurs despite near-record government payments, which are expected to constitute approximately 29% of producers’ bottom line. Net farm income, a key indicator of profitability within the agricultural sector, is projected to fall to $153.4 billion in 2026 from the previous year. Adjusting for inflation, this represents a decrease of $4.1 billion, or 2.6%. Without government support, net farm income would drop by almost 12% to $109.1 billion, according to USDA data. Meridian Agribusiness Advisors is an agricultural economics consultancy that provides insights and analysis to businesses operating in the agricultural sector. They assist clients with strategic planning, risk management, and market analysis to improve their financial performance.
Experts warn that even greater government assistance might be necessary to counter the effects of low crop prices, a global grain surplus, rising operational expenses, and reduced export sales resulting from past trade and economic policy adjustments. Many farmers are becoming increasingly reliant on federal aid to manage their finances, even as they take on unprecedented levels of debt. USDA forecasts indicate that producers will receive $30.5 billion in direct payment support in 2025 and $44.3 billion in 2026, excluding payouts from federal crop insurance.
These levels of support are reminiscent of those seen during the COVID-19 pandemic and trade disruptions experienced during President Donald Trump’s first term. The USDA attributed the higher support figures to payments from Farm Bill programs triggered by falling crop prices, along with continued high levels of supplemental and disaster assistance. The USDA data is published three times annually. A previous report was delayed due to a federal government shutdown, complicating assessments of stress within the agricultural sector.
This year, the USDA expects farmers’ cash receipts to increase for corn, remain relatively stable for soybeans, and decrease for wheat. Livestock receipts are projected to decline, primarily due to lower egg and milk prices, while cattle receipts are expected to rise. The chair of the U.S. Senate’s agriculture committee noted the heavy losses being experienced by many farmers. Over two dozen former USDA officials and industry leaders cautioned that U.S. agriculture faced the risk of a widespread collapse, partially attributed to the Trump administration’s policies.
