Farmers Are Facing A Generational Downturn, AFBF Notes

Last week, USDA released projections indicating farm income will slip lower in 2026 and remain about $48 billion under the record highs of 2022.  Danny Munch, American Farm Bureau Federation economist, said farmers and ranchers are looking at a generational downturn.

“The USDA projects net farm income at about $153 billion in 2026 and about $1.2 billion, down from last year's revised number," Munch said.  "Production expenses are estimated to reach a record level at $477.7 billion.  Livestock receipts are expected to decline.  $17 billion crop receipts are expected to say about even, but are still below break-even prices for farmers.”

A Lot Has Changed In Just A Few Months

Munch said the farm income picture looks much different than the last time USDA made a projection in September.

“We haven't had a picture of the 2025 net farm income number for a while," Munch said.  "The biggest surprise from this report is how much weaker 2025 turned out to be.  USDA revised their 2025 net farm income number down by $25 billion compared to its original forecast.  So, moving from $180 billion that they forecasted in September for the year to just over $154 billion."

The problems with the farm economy have been well-documented, but Munch said there are some potential solutions on the table.

Farmers Want Opportunities, Not Government Checks

“Farmers need stronger market returns, so income comes from selling commodities, not that aid, and that means improving farm safety net through a fully passed Farm Bill, strengthening trade and demand and addressing rising inputs," Munch said.  "And we need more durable policy fixes, or the financial situation in rural America is going to continue to deteriorate.”

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