Key Takeaways
- USDA ERS forecasts U.S. net farm income at $153.4 billion for 2026, a nominal decline of $1.2 billion (0.7%) from 2025, though both net farm income and net cash farm income remain above their 2005–24 inflation-adjusted averages.
- Total farm cash receipts are projected to fall $14.2 billion (2.7%) to $514.7 billion, driven primarily by a sharp expected drop in egg receipts of $17.3 billion (66%) as prices normalize after 2025 highs.
- Direct government farm payments are forecast to surge to $44.3 billion in 2026, up $13.8 billion (45.2%) from 2025, boosted by modifications to ARC and PLC programs under the One Big Beautiful Bill Act and elevated disaster assistance payments.
- Cattle and calves receipts are projected to grow $5.2 billion (4.1%) as cattle prices continue to rise, while corn receipts are expected to increase $2.0 billion (3.3%) on higher sales volumes.
- Total production expenses are forecast at $477.7 billion, essentially flat in nominal terms but down 0.9% in inflation-adjusted dollars, with feed costs declining and livestock/poultry purchase costs rising.
USDA ERS Projects Modest Softening in Farm Sector Profitability
The USDA Economic Research Service (ERS) forecasts U.S. net farm income at $153.4 billion for calendar year 2026, representing a nominal decrease of $1.2 billion (0.7%) from 2025. Adjusted for inflation, the decline is more pronounced at $4.1 billion (2.6%). Net cash farm income, a related measure that accounts for cash transactions rather than accrual adjustments, is forecast at $158.5 billion — an increase of $4.6 billion (3%) in nominal terms, or $1.7 billion (1.1%) in inflation-adjusted dollars. Despite the year-over-year softening, both indicators are projected to remain above their 2005–24 historical averages in real terms.
Cash Receipts Decline Led by Egg and Milk Prices
Total farm cash receipts are forecast to decrease $14.2 billion (2.7%) to $514.7 billion in 2026. Animal and animal product receipts are expected to drive the bulk of the decline, falling $17.0 billion (5.8%) to $273.9 billion. Chicken egg receipts account for most of that drop, with USDA ERS projecting a $17.3 billion (66%) reduction as egg prices fall sharply following elevated 2025 levels driven by avian influenza supply disruptions. Milk receipts are also forecast to decline by $6.2 billion (12.8%) owing to lower prices.
Partially offsetting these losses, cattle and calves receipts are projected to grow $5.2 billion (4.1%) as cattle prices continue their upward trend. Broiler receipts are expected to increase modestly by $0.6 billion (1.4%).
Crop cash receipts are forecast at $240.8 billion, up $2.8 billion (1.2%) in nominal terms, though this represents a slight inflation-adjusted decline of 0.7%. Corn receipts are expected to rise $2.0 billion (3.3%) on higher sales volumes, while wheat receipts are projected to fall $0.2 billion (2.4%) and rice receipts are forecast to drop $0.4 billion (12.5%) on lower prices and smaller quantities sold.
Government Payments Forecast to Rise Sharply
Direct government farm payments are forecast at $44.3 billion for 2026, a $13.8 billion (45.2%) increase over 2025. The jump reflects two primary drivers: elevated supplemental and ad hoc disaster assistance payments, forecast at $23.9 billion and drawn largely from the Farmer Bridge Assistance Program and Supplemental Disaster Assistance under the American Relief Act of 2025; and a $13.1 billion increase in Farm Bill commodity price-linked payments to $15.2 billion, driven by modifications to the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs authorized by the One Big Beautiful Bill Act (OBBBA, Pub. L. 119-21). Conservation payments are forecast at $5.3 billion, up $219 million (4.3%) from 2025.
USDA ERS Notes Production Expenses Remain Broadly Stable
Farm sector production expenses are forecast at $477.7 billion in 2026, up $4.6 billion (1.0%) in nominal terms but down 0.9% when adjusted for inflation. Livestock and poultry purchases — the largest single expense category — are projected to rise $5.9 billion (9.7%) to $66.3 billion. Feed expenses are expected to continue a decline that began in 2023, falling $4.8 billion (6.8%) to $65.6 billion. Cash labor expenses are forecast at $53.9 billion, up $1.2 billion (2.2%), broadly in line with inflation. Pesticide and fuel expenditures are projected to decline, while property taxes and electricity costs are expected to increase.
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