2025 is challenging

David Sparks Ph.D.

The cattle and calves sector is one of the only ag commodity sectors that is doing well in 2025, according to USDA data released Sept. 3. The data from USDA’s Economic Research Service shows U.S. farm cash receipts – this is the money that farmers and ranchers receive directly for their commodity – will be up a total of 5 percent in 2025.

The report – “Farm Income and Financial Forecasts for 2025” – also projects that total net farm income will increase by 40 percent in 2025, compared to 2024. Net farm income is a broad measure of profits.

But that is misleading. The bulk of the increase, both in farm cash receipts and net farm income, is expected to come from the cattle and calves sector, which has been on a roll for a couple of years now.

According to the report, cash receipts from the cattle and calves sector are expected to increase by 13 percent this year relative to last year.

That’s one of the few pieces of good news contained in the report.

Cassia County rancher Paul Marchant said the cattle industry has enjoyed a good run recently, but it’s not by accident.

“Those in the beef industry are experiencing historically high prices; things that most could never have envisioned,” he told Idaho Farm Bureau Federation. “At the same time, however, the industry and its producers are still playing catch-up for years and decades of being price takers for a grossly under-valued product.”

Marchant said a “byproduct of both the good and hard times is an industry that has learned to adapt to demands of complementing and competing industry segments and consumer preferences.”

“Advancements in technological processes have been matched, if not exceeded by, increased efficiency in feeding, marketing and genetics,” he said. “All of these things have come together to aid the cow-calf and feeding sectors in producing more beef, with fewer cattle, than at any other time in history. In all of agriculture, there’s not a brighter example of creating more with less, all while enhancing product quality, than the American beef industry of the past decade.”

Cattle and calves is Idaho’s No. 2 agricultural commodity in terms of total farm cash receipts, behind the milk sector, which is forecast to see a 4 percent drop in cash receipts this year.

This is the forecast nationally, but it may or may not happen in Idaho, which ranks No. 3 in the nation in milk production.

Idaho Dairymen’s Association Executive Director Rick Naerebout said Idaho milk production was up 7 percent during the first half of the year.

“Our guys are cranking out milk right now,” he said.

Farm-level milk prices may be down slightly from last year, “but it’s still been a good year so far,” Naerebout said. “It’s not a record year, but it’s not a bad year either.”

Milk is Idaho’s top agricultural commodity with $3.87 billion in cash receipts in 2024, according to the USDA report. Cattle in calves came in at No. 2 in that category with $3.3 billion.

The U.S. vegetable sector, which includes potatoes, Idaho’s No. 3 ag commodity, is expected to experience a 5 percent drop in revenue in 2025.

Wheat, which ranks No. 4 in Idaho in total farm cash receipts, is forecast to see a 12 percent drop in revenue, and cash receipts for hay, which ranked No. 6 among Idaho farm commodities last year, are forecast to be down 3 percent.

Other major ag commodities in Idaho that are expected to see declines in cash receipts include barley and corn.

Chicken eggs over the past few years have become a major Idaho ag commodity in terms of cash receipts and USDA forecasts revenue from that commodity will increase by 32 percent this year.

USDA forecasts farm-level income from fruits and nuts will be up 4 percent in 2025. Farmers in southwestern Idaho do produce a decent amount of fruit such as apples and peaches.

The net farm income total is expected to be boosted by a large increase in total direct government payments to farmers and ranchers. While still a small percentage of overall farm income, total government payments to U.S. farmers are forecast to increase from $10 billion in 2024 to $40 billion in 2025.

In addition to declining farm-gate revenue this year, farmers also have to contend with another increase in overall expenses. USDA forecasts total U.S. farm and ranch production expenses will be up 3 percent, or $12 billion, compared with 2024.

Overall U.S. farm production expenses are forecast to total $457 billion in 2025.

Some expenses, such as labor, interest and property taxes, are forecast to be up between 4 and 5 percent, while livestock and poultry purchases are expected to be up 22 percent, according to USDA. Expenses that are forecast to be down include feed (down 6 percent), fertilizer (-1 percent), seeds (-1 percent), pesticides (-5 percent) and fuel (-4 percent).

According to the report, “Spending on livestock/poultry purchases are expected to see the largest increase relative to 2025 … while spending on feed is expected to decline in 2025.”

“When adjusted for inflation, the expenses are projected to be comparable to their 2024 levels,” the report states.

Total U.S. farm cash receipts in 2025 are forecast to rise by $24 billion to $535 billion, a 5 percent increase relative to 2024.

USDA forecasts that total U.S. crop receipts will fall by $6 billion, or 2.5 percent, from 2024, while total receipts from animals and animal products will increase by $30 billion (11 percent).

“Milk was an exception, with lower cash receipts,” the report states.