The USDA lowered its 2025 farm income forecast, and the weakness will continue into 2026

The USDA’s latest farm income forecast provides estimates for 2026 for the first time, and also significantly revised the outlook for 2025. The February report was the first update since September and was marked by significant changes, as the USDA did not release its customary December farm income update. The USDA now estimates that net farm income in 2025 will total about $154.6 billion, a significant decrease of about $25 billion from the September forecast of $179.8 billion. Net agricultural cash receipts in 2025 were similarly revised down to about $153.9 billion, nearly $27 billion below the previous forecast of $180.7 billion.

Meanwhile, the U.S. Department of Agriculture revised upward production expenditures in 2025 to $473.1 billion, while lowering direct government payments to about $30.5 billion, about $10 billion lower than earlier expectations. Together, these revisions suggest that the agricultural economy is experiencing a generational decline rather than a temporary slowdown. With the exception of cattle, most commodity markets are weakening. The updated forecasts further confirm that market expectations for a strong revenue rebound in 2025 have not materialized, reinforcing the view that farm profitability last year was more fragile than previously thought.