USDA Forecasts Inflation-Adjusted U.S. Net Farm Income Down 5.5% in 2026

The U.S. Department of Agriculture's Economic Research Service is forecasting a weaker inflation-adjusted profitability picture for the farm sector in 2026, even as several headline cash measures remain historically elevated.

USDA puts net farm income at $158.4 billion for 2026. In nominal dollars that is 2.6 percent below 2025, while the inflation-adjusted decline is 5.5 percent. Net cash farm income is forecast at $176.4 billion, only slightly higher in nominal terms and 2.5 percent lower after inflation.

The expense side is central to the outlook. USDA expects total farm production expenses to rise to $492.8 billion, with higher livestock and poultry purchases, fertilizer, lime, soil conditioners, fuel and oil contributing to the increase.

The forecast also shows a sharp divergence by commodity. Crop cash receipts are expected to rise overall, while animal and animal product receipts are projected to decline, with lower egg receipts a major factor.

Government payments are expected to play a larger role in sector income in 2026. USDA forecasts direct government farm payments at $47.4 billion, reflecting commodity-linked programs and supplemental or ad hoc disaster assistance.

For agribusinesses, lenders and suppliers, the data point to a farm economy where aggregate income remains above long-term averages but cost pressure and performance vary substantially by commodity and region. The next USDA farm income forecast is scheduled for December.