Government Payments will Inflate Net Farm Income

Net farm income (NFI) is projected to go allllll the way up this year.

After a decline in NFI in 2023, and a forecasted decline in 2024, what gives? 

Government payments. Farmers will see a whopping 345% increase in money from the government this year.

In 2025, payments are penciled in at $42.4B, an increase from the $9.3B paid in 2024. The American Relief Act of 2025, which became the law in December 2024, authorized economic assistance payments to farmers, as well as payments for losses pertaining to 2023 and 2024 natural disasters.

The Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) direct payment programs will also see an increase in funding this year.

Quick refresher: NFI is defined as a measure of farm sector profitability incorporating non-cash items, which includes inventory changes, economic depreciation, and gross imputed rental income. 

It is “based upon cash receipts from farming, plus government payments and other farm-related income, minus cash expenses,” according to Agri-Pulse.

This year NFI is projected to increase by 26.4%, or $37.7B, to $180.1B.

Soundbite: “When grouped by commodity specialization, farm businesses specializing in animal/animal products are forecast to see higher average net cash farm income in 2025 while the outlook for those specializing in crops is mixed.” — ERS in its forecast

Where this goes: While a boost in funding will increase working capital and improve financial health, there’s skepticism on the sustainability of these farm support programs. Coupled with tariff uncertainties and decreasing farm receipts, Capitol Hill might have to revise the farm safety net down the road.