Forecast mixed for farm income going into 2026

The outlook for farm income in Nebraska remains mixed at the end of 2025. The farm income forecast for the ag sector looks to be up relative to 2024, but not as much as projected back in the spring. 
Dramatic differences between crop and livestock prospects and heightened uncertainty over market, trade and policy developments drive the outlook and raise questions for the coming year.
The Center for Agricultural Profitability at the University of Nebraska-Lincoln and the Rural and Farm Finance Policy Analysis Center at the University of Missouri collaborate to publish farm income projections for Nebraska twice a year. 
The most recent projections released in early November put Nebraska farm income for 2025 at $8.4 billion. That is up substantially from the estimated $5.9 billion net farm income in 2024, but down from what would have been a record $9.4 billion projected back in the spring.

Results may vary
The aggregate projections for strong Nebraska farm income in 2025 hide the contrasting outlook for different ag sectors in the state. 
In the spring, the situation was described as a tale of two farms, or more specifically a farm and a ranch, as crop prospects and livestock (primarily cattle) prospects were moving in different directions. Those trends became even more pronounced during the year, with cattle fundamentally carrying farm income prospects for the state along with increased government payments.
Crop receipts in Nebraska have declined 30 percent since the record levels of 2022, falling from $16 billion to a projected $11.4 billion for 2025. Corn and soybeans make up about 90 percent of the total crop receipts in the state, so the decline is concentrated in the two primary crops, although other crops have struggled as well.
In the meantime, livestock receipts have grown more than 40 percent since 2022 and have more than doubled since 2020. Livestock receipts in Nebraska amounted to $11 billion in 2020 and $16 billion in 2022 before rocketing to $23.3 billion projected for 2025. Cattle and calves make up almost 90 percent of livestock receipts in the state, as well, and have outperformed the rest of the livestock sector.
Beyond crop and livestock receipts, the primary contributor to farm income in the state for 2025 is government payments. Government payments are projected at $2.2 billion for Nebraska in 2025, up $1.7 billion over 2024 as ad hoc government assistance signed into law in late 2024 mostly rolled out to producers in 2025. 
The projections are based on Nebraska’s share of assistance payments to date adjusted to the total expected payments, although some of the total assistance is projected to be delayed into 2026 given ongoing sign-up and government shutdown delays.
Of note, the projected government payments do not presume any potential but as of yet unannounced support. That includes potential trade assistance that has been widely anticipated but not officially announced as of the time of these projections.

How about expenses? 
On the other side of the ledger, higher production costs continue to challenge agricultural producers. Total production costs are projected to be $1.7 billion higher in 2025 compared with 2024, reaching a record of $30.4 billion for the year. 
The cost increase year over year is actually concentrated in purchased seed, feed and livestock. The same cattle price rally that drove cattle receipts higher also drove cattle purchases higher. 
In total, livestock purchases for the year are projected to increase by nearly $2.2 billion, while lower grain prices mean feed purchases are projected to be more than $300 million lower. Other production costs in aggregate were generally steady, although they remain high by historical comparison. 
In net, the further increase in livestock receipts and the increase in government payments more than offset the continued decline in crop receipts and the increased production expenses to drive Nebraska net farm income nearly $2.5 billion higher for 2025.
Looking ahead to 2026, the projections remain relatively strong, but they are filled with uncertainty about market, trade and policy issues ahead. Crop receipts are projected to grow modestly in 2026 and beyond, dependent on producer planting decisions and projected price recovery.
Livestock receipts are projected to continue trending higher through 2027 on reduced cattle supplies until herd rebuilding eventually leads to increased production and supply. Government payments are projected sharply lower in 2026, barring any additional assistance approved by Congress or the administration. 
Commodity program payments should increase substantially as higher supports passed in the budget reconciliation bill earlier this year for the 2025 crop show up as payments in the fall of 2026. But ad hoc and supplemental payments should decrease dramatically once ongoing assistance is paid out. Production expenses are expected to remain relatively stable as purchased feed and livestock level out.

Stable income
All of the expectations for 2026 and beyond show a stabilizing farm income outlook that may belie the heightened uncertainty and anxiety felt in the agricultural sector over market, trade and policy issues. 
The projections by definition do not presume any policy changes that have not been announced, but ongoing discussions over potential trade assistance suggests additional cash flow in the coming months. At the same time, the nearly continuous headlines in trade with deepening trade conflicts in some areas and advertised trade deals in other areas make economic forecasts for agriculture and agricultural exports extremely difficult.
Ultimately, agricultural producers have to manage for all kinds of risks and uncertainty, including the economic and policy risks described above. Producers may need to plan for what is expected, but they also need to analyze and manage the potential impacts if conditions or policies vary. 
That is the challenge ag producers know every year from managing for uncertain weather, but in this year and the coming years, they can add uncertain economic and policy directions as well.
The writer, Brad Lubben is a Nebraska Extension associate professor, policy specialist and director of the North Central Extension Risk Management Education Center in ag economics at the University of Nebraska-Lincoln. He has more than 30 years of experience in teaching, research and Extension, focusing on ag policy and economics. Lubben grew up on a grain and livestock farm near Burr, Neb., and holds degrees from UNL and Kansas State University. This article was originally published by Nebraska Farmer and is reprinted here with permission.