The USDA’s September 2025 net farm income forecast projected net farm income to rise sharply from 2024, said Bernt Nelson, economist at the American Farm Bureau Federation, in a letter from the Livestock Marketing Information Center called In The Cattle Markets.
While stronger performance in some sectors was a factor in the increase, much of it was tied to continued support from government disaster assistance, Nelson said.
MIXED OUTLOOK
Overall, the USDA’s September 2025 net farm income forecast projected a mixed outlook, he said. Net farm income, a key measure of profitability, was forecast at $179.8 billion in 2025, an increase of $52 billion, or 40.7%, from $127.8 billion in 2024, Nelson said, but about $300 million less than the USDA’s February forecast of $180.1 billion.
LIVESTOCK AND CROP RECEIPT DISPARITY
The forecast showed significant disparities between livestock and crop receipts, Nelson said. On one hand, total animal/animal product cash receipts were forecast to increase by $30 billion, or 11.2%, from $268.6 billion in 2024 to $298.6 billion in 2025. On the other hand, cash receipts from crop sales were forecast to decrease by $6.1 billion, or 2.5%, from $242.7 billion in 2024 to $236.6 billion in 2025.
However, higher prices will help push receipts for all major animals/animal products, he said. Cash receipts for cattle and calves had the largest increase, rising by $17.6 billion, or 16%, to $129.7 billion. If realized, this would be a record high for cash receipts from animal products and receipts from cattle and calves.
Looking at crops, the USDA lowered its crop cash receipts projection by $17 billion from February’s $253.6 billion forecast, Nelson said. If realized, it would be the lowest cash receipts for crop sales since 2007.
INCOMING FARM DEBT VS INTEREST
This will be the third straight year of losses for many US farmers, which has led to another alarming statistic in the USDA’ s forecast, a rise in farm debt, he said. Total farm sector debt was forecast to increase by $28.35 billion, or 5%, to $591.82 billion in 2025. This is an increase of nearly 20% since 2022 when the Fed began raising interest rates to fight inflation.
Interest paid to service that debt was up about $1.6 billion, or 5%, in 2025, Nelson said. More alarmingly, interest expenses have gone up 16% since 2022.
While most of the debt/interest pain is being felt on the crop side of the ag economy, cattle producers are feeling it too, he said. Record cash cattle prices are great for profitability for established cattlemen, but are a major obstacle for anyone looking to get into the cattle business or grow by buying cattle.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $235.06 per cwt to $241.00, compared with last week’s range of $238.09 to $244.00 per cwt. FOB dressed steers and heifers went for $369.43 per cwt to $375.71, compared with $373.45 to $379.73.
The USDA choice cutout Thursday was down $5.25 per cwt at $363.22 while select was down $3.49 at $343.40. The choice/select spread narrowed to $19.82 from $21.58 with 104 loads of fabricated product and 28 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $430.88 per cwt, and 50% beef was $136.07.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.05 to $1.20 a bushel over the Dec corn contract, which settled at $4.21 3/4, up $0.05 1/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $361.63 per cwt, down $3.08. This compares with Thursday’s Oct contract settlement of $354.30, down $4.67.