WASHINGTON, D.C. – The USDA’s Economic Research Service’s September 2025 net farm income forecast projects U.S. net farm income will rise sharply from 2024 for U.S. farmers, the agency said.

“While stronger performance in some sectors is a factor in the increase, much of it is tied to continued support from government disaster assistance,” said Bernt Nelson and Faith Parum, American Farm Bureau Federation (AFBF) economists, in their analysis of the forecast, released Sept. 3.

“The report points to some improvements in the farm economy, particularly for livestock producers who are expected to see notable gains in receipts and profitability, but elevated costs for labor, taxes and inputs, combined with weaker crop receipts, remain significant challenges for many farmers,” they added.

Overall, the USDA’s September 2025 forecast projects U.S. net farm income – a key measure of profitability – at $179.8 billion in 2025, an increase of $52 billion, or 40.7 percent, from $127.8 billion in 2024, but about $300 million lower than the USDA’s February forecast of $180.1 billion, Nelson and Parum said.

“After adjusting for inflation, net farm income is expected to rise $48.8 billion, or 37.2 percent, from 2024 to 2025,” they said. “Net cash farm income is forecast to increase $36.5 billion, or 25.3 percent, over the same period.”

Andrew P. Griffith, University of Tennessee professor of agricultural and resource economics, told Farm World, “When direct government payments are forecast at $40.5 billion in 2025, which is a $30.4 billion increase from 2024, then that pretty much makes up 60 percent of the increase in net farm income.

“Most of this is coming from the American Relief Act of 2025 signed in late 2024, and more specifically from the Emergency Commodity Assistance Program through direct payments and supplemental disaster programs (i.e. flooding, drought, etc.),” he said.

“The cattle sector will make up the rest simply due to the huge leap in cattle prices at all stages,” he added. “This may not have been the case if prices would have stagnated at any point, but they have been increasing the entire year, and those increases can easily make up for any losses in the crop sector, plus the additional increase in production cost brought on by higher cattle prices.”

The USDA report said cash receipts from crop sales are forecast to decrease by $6.1 billion, or 2.5 percent, from $242.7 billion in 2024 to $236.6 billion in 2025. The USDA lowered its crop cash receipts projection by $17 billion from the $253.6 billion forecast in February 2025. Nelson and Parum said, if this forecast is realized, this would be the lowest cash receipts for crop sales since 2007.

Moreover, they said, “Corn receipts are expected to fall $2.3 billion, or 3.7 percent, from $63.4 billion in 2024 to $61 billion in 2025. The projected decline in receipts demonstrates how lower prices are outweighing the record corn crop forecast in the USDA’s August World Agricultural Supply and Demand Estimates (WASDE) report.”

They added, “Total animal/animal product cash receipts are forecast to increase by $30 billion, or 11.2 percent, from $268.6 billion in 2024 to $298.6 billion in 2025. Receipts for all major animal/animal products are expected to grow mostly from higher prices. If realized, this would be a record high for cash receipts from animals and animal products.”

Overall, Griffith said, “My thoughts are these are just forecasts. I guess it provides a financial benchmark, but it does not really provide a good indicator of the financial health of farming operations in the United States. Just as we have variability across operations operating in the same sector, we have variability across grains, oilseeds, different livestock sectors, poultry, eggs, produce, etc.

“Thus, it is sometimes difficult for me to really have much of a take-home message from the aggregated values,” he said. “Information can certainly be inferred, but they tend to be very general.

“Specifically toward livestock, the magnitude of increase in net farm income and production expenses makes it look like the cattle business is a big business,” he added. “It is no bigger today than it was a year ago, or 10 years ago.”

He said, “The only thing that has happened is the market is placing a higher value on the animal, which tends to inflate what people are looking at. It simply tells me there is more financial risk in cattle today than there was one year ago.

“If a person is keeping up with what is going on in the industry, then they should not be surprised,” he added. “The general public will be surprised with the increase in government support and how much cattle prices have increased, but most in agriculture already knew this information.”

Nelson and Parum concluded, “Stronger livestock markets provide critical support, but continued reliance on government aid reacting to prior years underscores the fragility of farm finances that are being degraded by rising farm debt and interest expenses to service that debt.

“Without sustained market-driven growth, the rebound in net farm income will be difficult to maintain, leaving many producers vulnerable to future price shifts, expense pressures and policy changes,” they added.

To read the full USDA September 2025 net farm income forecast, visit: www.ers.usda.gov.