In February, USDA released the latest “USDA Farm Income Forecast”, which appears to show some concern regarding prospects for 2026 U.S. farm income. As you “drill deeper” into the latest USDA data, there are some reasons for even greater concern in certain segments of the agriculture economy. USDA latest update reduced the estimated 2025 U.S. net farm income by $25 billion from the farm income estimate in September, 2025, and projected an even lower net farm income for 2026. The USDA report also highlighted the continued increase in production expenses in agriculture, and the relatively high level of government payments. In should be noted that this report was released prior to the added farm economic concerns related to current war in Iran.
According to the latest U.S. farm income report that was released by the USDA Economic Research Service (ERS) in early February, the 2025 U.S. net farm income is estimated at $154.6 billion, which is down about $25 billion from the September estimate. The recent USDA summary lowers the projected 2026 U.S.net farm income downward an additional $1.2 billion to an estimated $153.4 billion. The record U.S. net farm income was $186 billion in 2022, with the record farm income being largely due to high crop commodity prices, modest crop expenses, and very strong crop profit margins. The projected 2025 and 2026 net farm income is mainly due to profitability of livestock production and large levels of government farm program payments.
In the recent farm income report, USDA revised the estimated total U.S. net cash income for 2025 downward to $153.9 billion, which is a decrease of nearly $27 billion from the September projection. The 2026 net cash income projected to increase slightly to $158.5 billion. Net cash income includes cash receipts from all farm-related income, including government payments, minus cash expenses for the year. Net farm income is accrual-based, which includes adjustments in the cash income for changes in inventories, depreciation, and rental income. Generally, net farm income is usually a more true measure of overall profitability in the farm sector.
Following are some observations from the latest USDA Farm Income Report:
• Overall, 2025 cash receipts for all commodities on U.S. farms is now estimated at near $529 billion, which is expected to decline slightly to $514.7 billion in 2026.
• Total 2026 crop receipts are estimated at nearly $240.6 billion, which is slightly above 2025 levels. Following are the estimated 2026 cash receipts for various crops, compared to 2025 and 2024 receipt levels:
Corn = $63.7 billion (2026); $61.6 B (2025); $66.4 B (2024)
Soybeans = $44.5 billion (2026); $44.5 B (2025); $46.3 B (2024)
Wheat = $9.5 billion (2026); $9.86 B (2025); $11.2 B (2024)
Cotton = $5.4 billion (2026); $5.4 B (2025); $5.2 B (2024)
Fruits & Nuts = $33.4 billion (2026); $33.0 B (2025); $31.3 B (2024)
Vegetables & Melons = $26.2 billion (2026); $25.5 B (2025); $25.1 B (2024)
• Total 2026 livestock receipts are estimated at nearly $274 billion, which is about $17 billion lower than 2025 levels. Total U.S. livestock receipts in 2026 are expected to surpass total crop receipts for the third straight year (2024-2026), which has not occurred in the past twenty-five years. Following are the estimated 2026 livestock receipts for various livestock, compared to 2025 and 2024 receipt levels:
Cattle & Calves = $133.1 billion (2026); $127.9 B (2025); $112.1 B (2024)
Milk & Dairy Products = $42.5 billion (2026); $48.7 B (2025); $50.7 B (2024)
Hogs = $29.3 billion (2026); $29.5 B (2025); $27.3 B (2024)
Broilers = $45.4 billion (2026); $44.7 B (2025); $45.4 B (2024)
Eggs = $8.9 billion (2026); $26.2 B (2025); $21.0 B (2024)
• The significance of government payments on net farm income and net cash income levels increased dramatically in 2025, and is expected to increase even more in 2026.This is largely due to a combination of one-time 2024 economic assistance payments (ECAP) and 2025 Farmer Bridge Assistance (FBA) payments, and the 2023 and 2024 disaster assistance payments (SDRP I & II). Regular farm program payments (PLC & ARC-CO) are also expected to be higher in 2025 and 2026 in some sectors, due the enhancements in the Title I provisions that were included in the “One Big Beautiful Act” (OBBA) that was enacted by Congress in 2025. There are also regular CRP payments, dairy margin coverage payments, and other traditional government payments. Following is listing of the Net Farm Income (NFI) for 2020-2026, and the total amount of estimated government payments (GP) for 2020-2026 (along with the % of the total net farm income from government payments):
2026 = $153.4 billion NFI, $44.3 billion (GP), (28.9% from GP)
2025 = $154,6 billion NFI, $30.5 billion (GP), (19.7% from GP)
2024 = $128 billion NFI, $11 billion (GP), (8.5%from GP)
2023 = $156 billion NFI, $12 billion (GP), (7.7% from GP)
2022 = $186 billion NFI, $16 billion (GP), (8.6% from GP)
2021 = $142 billion NFI, $26 billion (GP), (18.3% from GP)
2020 = $96 billion NFI, $46 billion (GP), (47.9% from GP)
• Total farm expenses are estimated at $477.6 billion in 2026, which is an increase $3.5 billion from 2025, and is $20 billion above 2024 expense levels. The projected 2026 total farm expense level is over 30 percent above the total expense level in 2020. The cost of purchased livestock, especially feeder cattle, is expected to see the greatest increase in 2026. Other farm expenses expected to increase in 2026 include fertilizer, labor, repairs, and property taxes. Seed, pesticides, and land rent are expected to stay fairly steady with a year earlier, while the cost of feed, fuel, and interest are expected to decline slightly in 2026. The continued higher level of crop input costs, together with lower commodity prices, points to the negative profit margins facing crop producers in 2025 and 2026. On the other hand, the low commodity prices have reduced feed costs, resulting in improved profitability in livestock production.
The U.S. net farm income projections by USDA for 2025 and 2026 probably appear to be better than probably actually exist in many areas of the country. The very high net farm income levels from 2021 to 2023 were primarily driven by some of the highest crop prices in the past decade, along with very manageable farm production expenses and low interest rates. The relatively high projected farm income levels for 2025 and 2026 are largely the result of record cattle prices, strong livestock profitability, and a very high levels of government farm program payments. Many of these government payments are one-time ad-hoc payments. The projected crop receipts for 2025 and 2026 are actually the lowest in recent years and the predicted overall profit margins for crop production this year are the poorest since the 2016-2020 period. The above average corn and soybean yields that existed in several areas of the Upper Midwest in 2025 certainly helped soften the potential negative profit margins for many farm operators in those areas.
There are some certainly some “yellow caution flags” in net farm income and profitability levels revealed in the latest USDA farm income report for the U.S. farm sector as we look ahead to 2026. A big key going forward will be if we see some improvement in crop prices during the next 6-12 months. This will likely depend on the level of U.S. demand and consumption, as well as the strength of U.S. export markets to China, Mexico, Canada, and other countries. Another key to farm profitability in 2026 will be what impact the war in Iran and potential tariffs have on farm production expenses, as well as the future direction of land costs, and interest rates during the coming year. In addition, final 2026 farm income and profitability will likely depend on the amount of ad-hoc short-term farm program payments, as well as the financial impact provided by the improved “safety-net” provisions in the “One Big Beautiful Act”.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone - (507) 381-7960; E-mail - [email protected]

In mid-February, the U.S. House Agriculture Committee Chairman, Congressman Glenn (GT) Thompson (R-PA) released the text for the revised version of the U.S. House Farm Bill, which is titled: “Farm, Food and National Security Act of 2026” (FFSNA), or so-called “Skinny Farm Bill”. The House version of the Farm Bill was reviewed and was approved by the entire U.S. House Agriculture Committee by a vote of 34-17. The proposed Farm Bill was approved by all Republican members of the Ag Committee. as well as by seven Democratic members of the Committee; however, there was strong opposition to the proposed Bill by the Democratic leadership on the Ag Committee. More details on the U.S. House Farm Bill can be found at: https://agriculture.house.gov/farmbill/
The 2023 crop year was set to be the final year for the 2018 Farm Bill; however, the 2018 Farm Bill has received three one-year extensions for the 2024, 2025 and 2026 federal fiscal years, and will now expire on September 30, 2026. Farm Bills are one of the most comprehensive pieces of legislation that are passed by Congress, with programs ranging from farm commodity programs to food and nutrition programs, from conservation programs to rural development programs, and several more. In many cases, finalizing a Farm Bill can be quite controversial, both along political party lines and geographical differences, with members of Congress wanting to protect the farm, food, conservation, and economic interests of their State. The so-called “skinny” Farm Bill covers all titles and provisions normally in the Farm Bill, including the commodity, crop insurance, and nutrition title provisions that were included in the “One Big Beautiful Act” (OBBA) that was passed by Congress in 2025.
The OBBA that was passed in 2025 provided $389 billion in funding over ten years for numerous USDA programs, including several Farm Bill Title I and Title IX provisions that are related to commodity programs and crop insurance. Following are changes that were enacted through the OBBA legislation that are included in the Farm Bill:
Title I - Commodity Programs
­• The statutory (minimum) reference prices were increased by 10 to 20 percent for all farm program crops, beginning with the current 2025 crop year. Following are the increases in statutory reference prices for some common crops:
Corn - $4.10 per bushel (up 11 percent from $3.70/bu.)
Soybeans - $10.00 per bushel (up 19 percent from $8.40/bu.)
Wheat - $6.35 per bushel (up 15 percent from $5.50/bu.)
• The existing formula for calculating the effective reference price (ERP) for a given commodity in a given year continues to be the greater of 85 percent of the “Olympic average” national market year average (MYA) price for the previous five years or the statutory reference price for a crop. For example, the current corn ERP for the 2025 and 2026 crop years is $4.42 per bushel, while the soybean ERP for 2025 and 2026 is $10.71 per bushel. The ERP cannot exceed 115 percent of the statutory reference price.
• Increases the ARC-CO guarantee to 90 percent of the benchmark (BM) revenue (formerly 86 percent). The BM revenue is the county BM yield time the BM price (5-year “Olympic” average price). The maximum ARC-CO payments increase to 12 percent of the ARC-CO revenue (formerly 10 percent).
• Increases the marketing assistance loan (MAL) rates for most commodities by 10 percent.
• Allows for the addition of up to 30 million new crop base acres, targeting farms that currently have no base acres, or that have planted more acres to program crops in recent years than the existing base acres. This provision would not affect existing crop base acres.
• The farm program payment limit has been increased to $155,000 for any eligible individual or entity (formerly at $125,000). The payment limit language was also adjusted to put farm LLC business structures under the same criteria as exists for farm general partnerships for payment limit purposes.
Title XI - Crop Insurance
• The OBBA increased the federal premium subsidies by 3 to 5 percent for most coverage levels of individual crop insurance. Additional premium reductions were also added for beginning farmers during their first ten years of farming.
• The premium subsidy for both the Supplemental Crop Option (SCO) and Enhanced Coverage Option (ECO) crop insurance was increased an 80 percent subsidy level. The SCO coverage will increase to 90 percent in 2027 (currently at 86 percent), while ECO offers 95 percent coverage. SCO coverage is now available with either the PLC or ARC-CO farm program choice (formerly only available with PLC).
Key provisions for other Titles in the “Skinny” Farm Bill:
• Title II – Conservation - The OBBA addressed some provisions for EQIP, CSP, and ACEP programs; however, it did not address the Conservation Reserve Program (CRP). The proposed Farm Bill will maintain maximum CRP acres at the current level of 27 million acres through 2031.
• Title III – Trade - Broadens USDA’s role in for trade and food aid programs.
•Title IV – Nutrition - The OBBA made several changes to the Supplemental Nutrition Program (SNAP). The proposed Farm Bill calls for more USDA commodity purchases from local producers for school and food aid programs.
• Title V – Credit - The FFSNA would increase the maximum loan levels for Direct and Guaranteed FSA loans, as well adjusting criteria for FSA beginning farmer loans.
• Title VI – Rural Development - The proposed Farm Bill reauthorizes and expands many USDA programs related to rural electricity, water and sewage systems, broadband connection, fire departments, and other rural infrastructure. This Title also supports small business loans and grants, rural childcare programs, and many other programs important to rural communities.
• Title VII – Research, Extension & Education --- This title authorizes USDA funding for agricultural research and extension service programs through the land grant universities in various States. There is also special funding to support rural mental health services and programs.
•  Title VIII – Forestry - Focuses on USDA programs related to forest management and stewardship programs, wildfire prevention, agroforestry initiatives, and other Forest Service programs.
• Title IX – Energy - Authorizes funding for USDA research related to sustainable aviation fuel (SAF); however, the FFSNA did not address the nationwide implementation of year-round 15 percent ethanol blends, or any other items related to expanding the use of biofuels.
• Title X – Horticulture - This title authorizes USDA funding for programs for fruits and vegetables, specialty crops, organic production, urban agriculture, etc. The proposed Farm Bill would limit the ability of States to regulate certain pesticides and crop protection products that are federally registered.
• Title XII - Miscellaneous - This Title includes a broad set of USDA programs addressing animal health and diseases, supply chain and national security issues, and emergency preparedness. One of the more controversial provisions in the FFSNA would restrict States from enacting legislation dictating animal production practices that could impact interstate trade of agricultural products, such as the Proposition 12 legislation in California.
The passage of the “skinny” Farm Bill by the U.S. House Agriculture Committees is the first step toward the possible completion of a Farm Bill by the end of 2026; however, many steps remain to complete that process. The Farm Bill will need to be approved by the entire U.S. House and the U.S. Senate, before ultimately sending it to the President for final approval. There are likely to be several amendments and proposed revisions to the FFSNA before a final Farm Bill is finally passed. This may be difficult to accomplish in 2026, given the current political divide that exists.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- [email protected]

Sign-up for the Farmer Bridge Assistance (FBA) program began on February 23 at local Farm Service Agency (FSA) offices and will continue until April 17. A total of $12 billion was allocated for the FBA program to provide economic assistance payments to producers of certain crops to offset low prices and poor profit margins for the 2025 crop year, as well as the market price impacts from tariffs on export markets for certain crops in the past year. Of that total, $11 billion of the payments will be paid to producers of traditional farm program Title I crops, which includes corn, soybeans, wheat, cotton, and rice. The remaining $1 billion will be held back for economic assistance for specialty crop producers.
FBA Sign-up Procedures
 
Eligible crop producers will receive a pre-filled FBA application form listing the eligible 2025 crop acres, based on the crop acreage report that was submitted to the FSA office. Producers only need to complete one FBA application for all eligible crops, regardless of the farm location in any county or State. Farmers can receive their FBA application form either in person at their local FSA office, or they can receive their FBA application using the FSA online system. Farmers with an existing FSA online account are able to sign-up for potential FBA payments by accessing their existing FSA account. Other farmers will also be able to set up a new online account prior to enrolling in the FBA program. For more information on the FSA online accounts, farmers should go to the following website: www.farmers.gov/account.
Once producers receive the FBA application, they should verify that the data in the application is correct and the sign the form. The completed FBA application may be submitted to FSA using the FSA online system, via email or fax, or in person at local FSA offices. In addition to submitting the FBA application on a timely basis, producers must have completed several other forms required by FSA. Most farmers that routinely receive farm program payments will likely already have these payments on file at local FSA offices. Following are the required FSA forms in order to receive FBA and other FSA payments:
• AD-1026 -Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC) Certification.
• Form CCC-941 - Average Adjusted Gross Income (AGI) Certification and Consent to Disclosure of Tax Information.
• Form CCC-901 - Member Information for Legal Entities.
• Form CCC-9021 (if applicable) - Farm Operating Plan for an Individual.
• Form CCC-941 (if applicable) - Farm Operating Plan for an Entity.
• SF-3881 - Miscellaneous Payment Form (Direct Deposit authorization).
 
FBA Payment Rates for Various Eligible Crops
• Corn - $44.36 per acre
v Soybeans - $30.88 per acre
• Wheat - $39.35 per acre
• Oats - $81.75 per acre
• Barley - $20.51 per acre
• Peas - $19.60 per acre
• Sorghum - $48.11 per acre
• Cotton - $117.35 per acre
• Rice - $132.89 per acre
• Peanuts - $55.65per acre
FBA payment rates were also announced for canola, chickpeas, flax, mustard, safflower, sesame, and sunflower.
 
How FBA Payments were Calculated
FBA payments will be based on the 2025 planted acres of eligible crops, as reported to local Farm Service Agency (FSA) offices on or before December 19, 2025. For double-crop acres, both the first crop and subsequent crop are eligible for FBA payments (for example peas followed by soybeans); however, any prevent plant acres in 2025 are not eligible for the FBA payments The payment amounts for each crop were based on the national average yield times the projected 2025-26 market year average (MYA) price in the December 9, 2025 WASDE report, minus the 2025 average production cost for a commodity, based on USDA Economic Research Service (ERS) data. The MYA prices in the December WASDE report included $4.00 per bushel for corn, $10.50 per bushel for soybeans, and $5.50 per bushel for wheat.

Payment Limits for FBA Payments
The payment limit for the FBA payments will be $155,000 per eligible person or legal entity. There will not be higher payment limits based on having 75 percent of taxable income received from farming enterprises, similar to some previous FSA programs. Entities such as corporations, LLC’s, S corporations, and trusts will be limited to one payment limit of $155,000. Any person or legal entity with an adjusted gross income (AGI) exceeding $900,000, based on FSA criteria, will not be eligible to receive any FBA payments.
Following are examples of the estimated acres required to reach the $155,000 payment limit with various crop mixtures of corn, soybeans, and wheat:
· 100% Corn ($44.36/A.) = 3,494 acres
· 100% Soybeans ($30.88/A.) = 5,019 acres
· 100% Wheat ($39.35/A.) = 3,939 acres
· 2/3 Corn; 1/3 Soybeans (ave. $39.86/A.) = 3,889 acres
· 1/2 Corn; 1/2 Soybeans (ave. $37.62/A.) = 4,120 acres
· 1/3 Corn; 1/3 Soybeans; 1/3 Wheat (ave. $38.20/A.) = 4,058 acres
 
Details on the ASCF Program for Specialty Crops
An additional $1 billion has been allocated for the Assistance for Specialty Crop Farmers (ASCF) program, which will provide payments to a wide range of crops not covered by the FBA program. This includes most fruits, vegetables, nuts, horticulture crops, etc. Producers of dry edible beans and peas are eligible for FBA payments and should complete out a FBA application, as they will not be eligible for ASCF payments. There will also be separate payments for sugar beet and sugarcane producers. Similar to FBA payments, ASCF payments will be based on 2025 planted acres of various specialty and sugar crops. Specialty crop acreage must be reported to local FSA offices by March 13, 2026. Following that, payment rates and sign-up details will be announced for the ASCF program.
 
More Information on the FBA Program or the ASCF Program
Farmers that submitted their application for the FBA program shortly after February 23 reported receiving their FBA payments within a few days. Farmers with specific questions on the application process for either the FBA program or the ASCF program, or regarding payment procedures, should contact their local FSA office. For more information on the FBA program requirements, payment rates, payment limits, etc., as well as updates on the ASCF program, farmers can go to the USDA FBA website at: https://www.fsa.usda.gov/resources/programs/farmer-bridge-assistance-fba-program
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- [email protected]