The USDA’s Economic Research Service reports an estimated 345% increase in government payments will boost farm income in 2025 despite declining overall farm revenues. The growth is attributed to ad hoc disaster and economic assistance, approved by Congress in December, along with other direct payment programs like Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC), which will boost government payments from $9.3 billion in 2024 to $42.4 billion in 2025.

The USDA projects net farm income to come in at $180.1 billion. This is an increase of $41 billion from 2024. Net cash farm income is forecast at $193.7 billion. This is a $34.5 billion increase. This resulted in more working capital and improved financial indicators.

The USDA forecasts livestock purchases, labor, and seed will rise in 2025. However, overall farm expenses, including feed, fertilizer and pesticides, are predicted to decrease slightly to $450.4 billion.

Government payments look to strengthen farm finances, but questions remain about the long-term viability of support programs. As farm revenues decline and trade uncertainties persist, policymakers may revisit farm safety net policies in future legislation.

Read more about the impact of government payments on farm income here.