Farm income to fall this year, despite hefty gov't payments

by Ryan Hanrahan, University of Illinois' FarmDoc project

Urbana, IL -- Feb. 6, 2026 -- Reuters' P.J. Huffstutter reported that "in a sign of growing stress for U.S. farmers, the Agriculture Department forecast on Thursday that U.S. net farm income would fall 0.7% this year, despite near-record government payments that are expected to account for nearly 29% of producers' bottom line."

"Net farm income, a broad measure of profitability in the agricultural economy, is forecast to drop 0.7% to $153.4 billion in 2026 from the year before, USDA said," Huffstutter reported. "When adjusted for inflation, net farm income is projected to decrease by $4.1 billion or 2.6%."

Line chart titled "U.S. net farm income and net cash farm income, inflation adjusted, 2005-26F," showing both measures in 2026 dollars (billions) from 2005 through a 2026 forecast. Net cash farm income (gold line) and net farm income (blue line) fluctuate over time, rising to peaks around 2011-2013 and again in 2021-2022, then easing slightly. Average values for 2005-24 are marked near $158.5 billion for net cash farm income and $153.4 billion for net farm income. Courtesy of the USDA.

"Without government payments, net farm income this year would fall nearly 12% to $109.1 billion, according to agency data," Huffstutter reported. "'Government payments are doing a lot of the work in supporting crop producers,' said Wesley Davis, a partner at Meridian Agribusiness Advisors, an agricultural economics consultancy in New York City."

"Many farmers are increasingly dependent on federal support to pay their bills - while also taking on record levels of debt - even as government payments near record levels, economists said," according to Huffstutter's reporting. "USDA forecast that producers will receive $30.5 billion in direct payment support in 2025 and $44.3 billion in 2026, excluding additional payouts from federal crop insurance indemnities. Such levels have not been seen since 2020 and 2021 amid COVID-19 pandemic upheaval and trade disruptions during President Donald Trump's first term."

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