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Higher fuel and fertilizer costs pressure 2026 farm income

An ag economist with American Farm Bureau says record production costs in USDA’s September Farm Income Report reflect how much net farm income is eroding.

Faith Parum tells Brownfield, “We continue to see a downturn in the farm economy and production expenses continue to increase.”

The USDA is projecting 2026 net farm income at $158.4 billion, down more than $9 billion (5.5 percent) from last year when adjusting for inflation. Total production expenses are forecast to increase 4.5 percent to $492.8 billion.

Parum says higher fuel and fertilizer prices have made up much of the $15 billion increase since February.

“As long as there continues to be conflict in the Middle East, we’ll see higher fuel and fertilizer prices,” she says. “The fertilizer market is already pretty volatile, so it does take a little bit for some of that disruption to come back down.”

She says while cattle and calf cash receipts are forecast to rise by more than five percent, other livestock categories are projected lower.

“For example, eggs are coming down 66 percent from the previous year on their cash receipts,” she says. “A lot of that is due to the really high prices we saw in eggs, but still notable, dairy products and hogs down around 4 percent.”

The USDA is calling for crop cash receipts to increase six percent, with gains for corn, soybeans, and cotton offset by decreases in rice and sugar.

The agency estimates federal support will rise nearly 70 percent from last year to $47 billion. 

Median farm income earned by farm households is expected to total -$467 in 2026.