Revised Farm Income Forecast Overshadowed by Increased Production Costs

TOPICS

Farm Economy Farm Income

Faith Parum, Ph.D.

Economist

Chad Smith

Associate News Service Editor, NAFB

photo credit: North Carolina Farm Bureau, Used with Permission

Faith Parum, Ph.D.

Economist

Chad Smith

Associate News Service Editor, NAFB

New farm income projections say the farm economy is still tough, as we hear in this report from Chad Smith.

Smith: The Department of Agriculture released updated farm income numbers this week, and the outlook is still bleak. Faith Parum, an economist for the American Farm Bureau Federation, says the adjustment recalibrates numbers USDA released in February.

Parum: USDA raised its 2026 net farm income forecast by about $5 billion from its February forecasts, and they think it's going to land right around $158 billion.

Smith: That is a decline from 2025 farm income, which was about $163 billion. Furthermore, production costs continue to climb even as cash receipts increase.

Parum: So, we're continuing to see higher cash receipts in some commodities as prices continue to increase. We continue to see more and more production expenses as well. In fact, they increased their first estimate of production expenses by $15 billion. So, continuing to see record production expenses this year.

Smith: Parum says there is one major lever that Congress can pull to help stabilize the farm economy.

Parum: Yeah, the biggest thing policymakers can do is pass a full five-year farm bill. We know that the Senate will be considering it when they come back from recess, and so we really encourage lawmakers to continue to work on a farm bill, pass it, so we can have a fully modernized, harmonized farm bill that will give some security to farmers and ranchers as they plan ahead.

Smith: For more information, to the Intel page at fb.org. Chad Smith, Washington.

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