By Ryan Hanrahan
Agri-Pulse’s Philip Brasher reported that “the Agriculture Department is lowering its forecast for farm earnings in 2025 as declines in the crop sector more than offset soaring incomes for cattle producers.” But “even with the lower numbers, both the estimates for net farm income and net cash income this year are above the 20-year average, largely due to an influx of government payments to row crop producers,” Brasher reported.
“Net cash farm income, a measure of producers’ cash flow, is forecast at $180.7 billion for 2025, an increase of $36.5 billion, or 25.3%, over last year when adjusted for inflation, according to the forecast issued by the Economic Research Service on Wednesday,” Brasher reported. “In February, USDA had forecast net cash farm income for 2025 at $193.7 billion.”
“Net farm income, a broader measure of profits, is forecast at $179.8 billion for 2025, an increase of $48.8 billion, or 37.2%, over 2024 when adjusted for inflation. February’s forecast was for net farm income of $180.1 billion,” Brasher reported. “Net cash farm income is based on cash receipts from farming, plus government payments and other farm-related income, minus cash expenses. Net farm income also factors in depreciation and changes in inventory values.”
Government Payments Projected at $40.5 Billion
Progressive Farmer’s Chris Clayton reported that direct government payments “are projected at $40.5 billion in 2025, a $30.4-billion increase from 2024. Government payments are the highest since 2020 the height of the pandemic. Congress last year provided farmers with $10 billion in economic aid: USDA’s Emergency Commodity Assistance Program (ECAP). So far, USDA has paid out $8 billion in ECAP payments to 559,585 producers, according to USDA’s website.”
“Along with that, Congress provided nearly $22 billion for natural disaster losses in 2023-24, which became the Supplemental Disaster Relief Program (SDRP). So far, about $4.76 billion has been paid to nearly 329,500 farmers,” Clayton reported. “Payments for conservation programs also rose to $4.8 billion, up 10.3% from 2024, with higher payments from Natural Resources Conservation Service (NRCS) programs.”
Brasher reported that “the forecast doesn’t include changes to commodity programs made by the One Big Beautiful Bill enacted in July, said (ERS economist Carrie) Litkowski. ‘They would affect payments more starting in 2026,’ she said on a webinar.”
Source : illinois.edu