USDA Forecasts Inflation-Adjusted Farm Income Will Fall

USDA released its closely-watched September farm-income forecast projecting net farm income at $158.4 billion in 2026, down $4.3 billion from 2025. After inflation, the decline is considerably larger, $9.1 billion, or 5.5%. Perhaps more significant for producers is the sharp increase in expenses. USDA expects production costs to reach $492.8 billion, up $21.2 billion, or 4.5%. Fertilizer, fuel and livestock purchases account for much of the increase. Meanwhile, direct government payments are forecast at $47.4 billion, $19.5 billion above 2025. Farm-sector debt is also projected to reach $605.1 billion, up 4.6%. The numbers illustrate the continuing margin squeeze facing producers despite stronger gross revenues in portions of agriculture.