DES MOINES, Iowa — The U.S. Department of Agriculture released a new report where net farm income projections are expected to increase in 2025, but the margins are expected to grow thinner for farmers.

According to the Economic Research Service for the USDA, crop receipts are expected to drop year over year. Farmer income in 2024, at a national level, for corn was $63.4 billion, and the forecast in 2025 is $61 billion. Soybean farmer income in 2024 was at $46.8 billion to the projected $43.5 billion in 2025; and for wheat in 2024 an $11.2 billion farmer income level is expected to drop to $10.1 billion in 2025.

“When it comes to selling into the market, you may not have as much of an ability on the market selling side, which can be a challenge,” said Jennifer Zwagerman, Director of the Agricultural Center at Drake Law School. “And really, I think for a lot of farmers it’s trying to figure out how to do something differently. It’s the idea of, you know, everybody says the next year it improves, but even if prices go up, then everything else goes up.”

With the drop in price projections, there is an increase in production costs for farmers, according to the USDA. Labor costs, livestock/poultry purchases, interest, property taxes and net rent are all on the rise. Where feed, fertilizer, seed, pesticides and fuel costs are staying close to 2024 levels, if not a slight decrease.

“With smaller operations, you have less of a safety net. You also may have fewer resources to try and attract or negotiate or get some of the better deals for things you can buy,” said Zwagerman. “…It’s reducing either the crops you grow, or maybe if you own land, maybe needing to lease it, foregoing improvements that might improve efficiency or help increase production, it is just not affordable to farms at that size.”

Zwagerman added that bankruptcies are spiking in the agricultural sector on a nationwide scale. Filings in the first quarter of 2025 are almost double the filings from the first quarter of 2024.

The USDA report does highlight that the farm income projections are set to increase, but in large part due to Direct Government farm program payments. These payments are direct to consumers to help mitigate rising input costs and the falling prices of crops. In 2024 there were $10.1 billion in these payments and in 2025 there is an estimated $40.5 billion, a 300% increase in a year’s time.