Reviewing State-Level Farm Income and Production Expenses

By John Newton

Key Takeaways

• USDA’s September Farm Sector Income Forecast provided the first state-level estimates for 2025 farm economic conditions. State-level projections were provided for gross farm income, production expenses and net farm income.

• A handful of states dominate farm income and expenses. California ($72 billion), Iowa ($47 billion), and Texas ($43 billion) led gross farm income, and the top 10 states accounted for more than half of both national gross income and production expenses.

• Net farm income is similarly concentrated. California ($26 billion), Texas ($15 billion), Iowa ($10 billion), and Nebraska (more than $8 billion) together made up over 30% of the national total and the top 10 states accounted for nearly 60% of U.S. net farm income.

USDA’s September Farm Sector Income Forecast provided updated projections for 2026 farm income but also provided the first state-level estimates for gross farm income, production expenses and net farm income (a broad measure of overall farm profitability) for 2025. These updated forecasts revealed that during 2025 U.S. inflation-adjusted net farm income climbed by nearly $32 billion, or 23%, to $167 billion. This is increase was driven by record livestock-based cash receipts as well as ad hoc federal support from USDA’s congressionally approved programs authorized under the American Relief Act of 2025.

State-Level Gross Farm Income

Buried beneath the headline net farm income projections for 2026, we find that inflation-adjusted U.S. gross farm income in 2025 is now forecast at $653 billion, an increase of 5%, or nearly $34 billion, from 2024’s inflation-adjusted value. As the nation’s largest agricultural producer, it is no surprise that California led the country with gross farm income of $72 billion in 2025, down only slightly from 2024’s estimate. Following California, Iowa was the nation’s second-largest contributor to real gross farm income at $47 billion – an increase of 9% year-over-year, attributable to higher cattle-based income and increased federal support compared to the year prior. Rounding out the top three, Texas contributed $43 billion to national gross farm income, and like Iowa was higher than 2024 due to livestock-based income and higher federal support.

Interestingly, the top 10 states in the U.S. in terms of agricultural income accounted for more than 50% of the nation’s real gross farm income. Rounding out the top 10 states in terms of real gross farm income are Nebraska ($41 billion), Kansas ($33 billion), Minnesota ($29 billion), Illinois ($26 billion), North Carolina ($20 billion), Indiana ($19 billion) and Wisconsin ($19 billion).