The USDA’s Economic Research Service has painted a picture of a resurgent agricultural sector in the United States, with both net cash farm income (NCFI) and net farm income (NFI) projected to see significant increases in 2025. After a period of relative stability and decline, these forecasts signal a much-needed boost for American farmers.
NCFI, which is calculated by subtracting cash expenses from gross cash income, is expected to rise by 18.8% to $193.7 billion in 2025. This follows a year of stability in 2024, and the projected increase is largely attributed to a surge in direct government payments to farmers.
Direct government payments are anticipated to more than quadruple, from $9.6 billion in 2024 to $42.4 billion in 2025. This dramatic increase is primarily due to the American Relief Act of 2025, which provides supplemental and ad hoc disaster assistance to farmers and ranchers. The act, passed in December 2024, authorizes economic assistance payments to producers and compensates for losses related to natural disasters in 2023 and 2024.
The broader measure of farm sector profitability, net farm income (NFI), is also expected to see a substantial increase of 26.4%, reaching $180.1 billion in 2025. This comes after a decline in 2023 and a forecasted decline in 2024. NFI takes into account noncash items such as changes in inventories, economic depreciation, and gross imputed rental income, providing a more comprehensive view of the farm sector’s financial health.
Despite these encouraging projections, it’s important to note that even if realized, these increases would still leave NCFI and NFI below their all-time highs in 2022. This underscores the ongoing challenges faced by the agricultural sector, including volatile market conditions, input costs, and weather-related risks.
The projected growth in NCFI and NFI is a welcome sign for the U.S. farm sector, which has faced numerous challenges in recent years. The increase in government payments highlights the critical role of federal support in sustaining farm operations, especially in the face of natural disasters and market volatility. As the agricultural sector navigates these challenges, the projected increases in 2025 offer a glimmer of optimism for farmers and ranchers across the country.
