U.S. farm income is expected to decline this year as rising production expenses continue to pressure the farm economy.
The USDA forecasts net farm income at $158.4 billion in 2026. That’s down $4.3 billion, or 2.6%, from 2025.
After adjusting for inflation, net farm income is expected to decline 5.5%, according to American Farm Bureau Federation (AFBF) economists.
USDA raised its 2026 forecast by $5 billion from its February estimate. But the improved outlook comes as farmers face higher costs for fuel, fertilizer, livestock and other production expenses.
Total farm production expenses are now forecast at $492.8 billion for 2026. That’s $21.2 billion higher than last year and $15.1 billion higher than USDA projected in February.
Crop cash receipts are expected to increase, while overall livestock receipts are projected to decline from 2025 levels.
Crop cash receipts are projected to reach $253 billion in 2026, up $14.6 billion, or 6.1%, from 2025.
Corn receipts are projected to increase more than 11% to $67.3 billion. Soybean receipts are expected to increase 10% to $47.9 billion, and cotton receipts are projected to increase 12.5% to $5.9 billion.
The outlook, however, is weaker for some crops.
Rice receipts are forecast to fall 19.6% to $2.3 billion, and fruit and nut receipts are expected to decline slightly.
Higher crop receipts also come as fertilizer, fuel and other expenses increase, which limits improvements in farm margins.
Livestock receipts are expected to decline from strong 2025 levels despite an improved forecast since February.
USDA projects animal and animal product cash receipts will total $287.3 billion in 2026. That’s down $16.4 billion, or 5.4%, from 2025.
Cattle and calf receipts remain a bright spot. They are forecast to increase 5.2% to $140.7 billion. Historically tight cattle supplies continue to support prices.
Receipts are expected to decline for dairy, hogs, broilers and eggs.
Egg receipts are projected to fall 66.3% to $10.6 billion. Milk receipts are expected to decline 4.3%, and hog receipts are forecast to fall 4%.
Several major production expenses increased significantly from USDA’s February forecast.
Fuel and oil expenses are now projected at $21.6 billion, a 28.8% increase from the earlier forecast. Fertilizer, lime and soil conditioner expenses increased 15.3% to $39.6 billion.
Livestock and poultry purchases are projected at $71.9 billion, up 11.4%. USDA projects total farm sector debt will reach a record $605.1 billion in 2026, an increase of $26.4 billion, or 4.6%, from last year.