Center for Agriculture and the Economy
Leveraging expertise from the Kansas City Fed, the Center provides timely analysis of industry developments and conducts ongoing research on the agricultural economy.
USDA’s net farm income projections reflect new timing of government transfer and weaker revenues in parts of the livestock sector
February 18, 2026
By Francisco Scott
Estimates from the United States Department of Agriculture (USDA) showed a decline in net farm income for 2025 of more than $25 billion from the previous projection. The timing of government payments previously expected during 2025 were responsible for most of the decline. Lower than expected revenues in the livestock sector, particularly for poultry and eggs and small upticks in feed, fertilizers, and pesticides expenses pulled net farm income lower than projected in September of last year. Crop revenues slightly offset the declines, as the USDA estimated oil crop revenues in 2025 to be stronger than previously projected.
Source: USDA, staff calculations.
Initial projections by the USDA indicate that net farm income may decline by 2.6% ($4 billion) in 2026 compared to last year. Government payments are expected to continue to contribute positively to net farm income, totaling $42 billion, as some direct transfers planned for 2025 will likely be paid in 2026. Projections show operational expenses softening slightly, while livestock revenues may increase moderately, which could help pull net farm income higher. However, the USDA projects lower revenues from crops, dairy, and poultry and egg production, which may offset some of the projected savings on inputs and expected gains from other sectors.
Source: USDA, staff calculations.
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Through regular surveys, analysis and connections across the industry, the Kansas City Fed has had a longstanding focus on U.S. and global agriculture. Leveraging this expertise, the Center for Agriculture and the Economy serves as a resource within the Federal Reserve System by providing timely analysis of industry developments and conducting ongoing research on the agricultural economy. The Kansas City Fed is committed to understanding developments in the agricultural economy and gathering perspectives from rural America in order to include them in discussions on the national economy.
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Agriculture is central to the Kansas City Fed’s 10th District’s economy, from farm production and food manufacturing to agricultural banking and finance. Through its regular surveys, analysis and connections across the industry, the Kansas City Fed has had a longstanding focus on the U.S. and global agricultural economy. At the same time, connecting with stakeholders and ag industry professionals through events, round tables and conversations is critical to the Bank’s work.