WASHINGTON, DC – U.S. farm profits are forecast to decline in 2026 even as federal payments rise sharply. USDA projects net farm income at $158.4 billion, down 2.6% from 2025 and 5.5% after adjusting for inflation.
Direct government payments are forecast at $47.4 billion, up nearly 70% from last year. Higher commodity-program payments and continued supplemental and disaster assistance account for most of the increase.
Production expenses are expected to climb 4.5% to $492.8 billion. Fertilizer expenses are forecast to be 15.3% higher, while fuel and oil costs are forecast to jump nearly 29%.
Crop receipts are projected higher, led by corn, soybeans and cotton. Cattle receipts also rise, but milk and hog receipts decline as animal-sector returns weaken overall.
Despite the inflation-adjusted decline, USDA says net farm income remains above its 20-year average. However, rising costs and heavy reliance on government support show continued financial pressure across agriculture.
Farm-Level Takeaway: Government payments are cushioning farm income, but inflation and rising production costs continue to erode producers’ purchasing power.