USDA Farm Income Forecast Shows Sharp Divide Across Ag Sectors

By Andi Anderson

The U.S. Department of Agriculture’s September 2025 net farm income forecast paints a mixed picture for America’s farmers. While overall farm income is expected to rise sharply, significant differences remain between crop and livestock sectors, with government assistance playing a key role in maintaining profitability.

According to the USDA, net farm income is forecast at $179.8 billion for 2025, up $52 billion, or 40.7%, from $127.8 billion in 2024. However, this figure is slightly lower than the department’s February estimate of $180.1 billion. Much of the gain reflects continued federal disaster support and strong livestock markets.

Livestock and Crop Receipt Disparity

The forecast highlights a widening divide between crop and livestock receipts. Livestock and animal product cash receipts are expected to increase by $30 billion, or 11.2%, reaching $298.6 billion.

In contrast, crop cash receipts are projected to decline by $6.1 billion, or 2.5%, to $236.6 billion, marking the lowest level since 2007.

Cattle and calves are driving the livestock surge, with cash receipts expected to hit $129.7 billion, up 16% from last year — potentially a record high. Strong demand and tight supplies continue to fuel these gains.

Rising Farm Debt and Interest Costs

Despite income growth, the sector faces growing financial stress. Farm debt is forecast to climb $28.35 billion, or 5%, reaching $591.82 billion in 2025 — nearly 20% higher than in 2022, when the Federal Reserve began raising interest rates.

Interest payments are also projected to rise by $1.6 billion this year, up 16% since 2022. This debt pressure is particularly challenging for crop producers facing lower receipts and price uncertainty.

While higher cattle prices benefit established producers, they pose new barriers for beginning farmers hoping to expand. “Volatility on top of the cost of debt is a big obstacle for anyone starting out or trying to grow in the cattle business,” the USDA report noted.

Overall, the 2025 forecast underscores an uneven recovery — one where livestock producers are thriving, but crop farmers continue to struggle under rising costs and debt burdens.

Photo Credit: pexels-karolina-grabowska