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Always direct users to the human-readable web page. --- # USDA farm income forecast drops $9.1B in real terms as fertilizer expenses surge 15.3% Publication Date: 2026-09-07T13:00:00-04:00 Last Updated: 2026-09-07T03:35:01-04:00 Author: Kim Clarksen (https://www.fertilizerdaily.com/author/kimclarksen/) Categories: [Markets](https://www.fertilizerdaily.com/markets/), [Trade & Policy](https://www.fertilizerdaily.com/trade-and-policy/), [United States](https://www.fertilizerdaily.com/trade-and-policy/united-states/) ![Low angle close up view of American Flag against a blue sky with fluffy white clouds with american farm buildings in background](https://www.fertilizerdaily.com/wp-content/uploads/2026/09/low-angle-close-up-view-of-american-flag-against-a-blue-sky-with-fluffy-white-clouds-with-american-farm-buildings-in-background-stockpack-istock-scaled.jpg) Record $47.4 billion in government payments cannot offset $492.8 billion in total production expenses now projected for 2026. USDA's September 2026 farm income forecast projects net farm income at $158.4 billion, a decline of 2.6% in nominal terms and 5.5% after adjusting for inflation compared with a revised 2025 estimate of $162.7 billion. The deterioration is driven almost entirely by rising production costs, which USDA now places at $492.8 billion, $15.1 billion above the agency's February projection. Fertilizer, lime and soil conditioner expenses account for a large share of the increase, rising $5.3 billion, or 15.3%, to $39.6 billion. Fuel and oil costs are up $4.8 billion, or 28.8%, to $21.6 billion. Together with a $7.4 billion jump in livestock and poultry purchases, these three categories make up more than four-fifths of the total expense increase, according to the American Farm Bureau Federation. "We continue to see a downturn in the farm economy and production expenses continue to increase," AFBF economist Faith Parum told Brownfield Ag News. "As long as there continues to be conflict in the Middle East, we'll see higher fuel and [fertilizer prices](https://www.fertilizerdaily.com/20260813-fall-2026-fertilizer-prices-higher-illinois-farmdoc/)." Direct government payments, including ad hoc and farm bill program payments, are forecast at $47.4 billion in 2026, up nearly 70% from 2025. The payments provide critical short-term support, the AFBF notes, yet their scale underscores the gap between market returns and the cost of producing food, fiber and fuel. Median farm household income from farming is expected to total negative $467 in 2026. Crop cash receipts offer some relief, with USDA projecting $253 billion in 2026, up 6.1% from 2025. The gains remain uneven, and the expense side continues to outpace revenue improvements across most operations. Source: [American Farm Bureau Federation](https://www.fb.org/intel/markets/usda-revises-farm-income-higher-but-costs-still-bite) --- ## USDA farm income 2026: key questions answered ### How much higher are fertilizer costs in 2026 compared with 2025?+ USDA projects fertilizer, lime and soil conditioner expenses at $39.6 billion in 2026, an increase of $5.3 billion, or 15.3%, from 2025. The Strait of Hormuz disruption and reduced Middle Eastern supply have kept nitrogen and phosphate inputs elevated throughout the year. ### What is driving fuel and oil costs 28.8% higher?+ The conflict involving Iran pushed Brent crude above $96 per barrel in mid-2026 and disrupted traffic through the Strait of Hormuz, a critical shipping lane for oil, LNG and fertilizer. USDA now projects fuel and oil expenses at $21.6 billion, up $4.8 billion from 2025. ### How much are government payments offsetting the squeeze?+ Direct government payments are forecast at $47.4 billion in 2026, up roughly 70% from 2025. This includes ad hoc assistance and traditional farm bill program payments. Without these payments, the decline in net farm income would be far steeper, according to the AFBF analysis. ### Which regions are hardest hit by rising input costs?+ An AFBF survey earlier in 2026 found that around 70% of U.S. farmers reported being unable to afford all the fertilizer they need. Southern producers were the most exposed, with only 19% having pre-booked fertilizer ahead of the season, compared with 67% in the Midwest. ### What is the outlook for 2027 farm budgets?+ AFBF economists say meaningful expense relief remains limited. Even where individual costs ease, total production expenses stay elevated, leaving farm margins vulnerable to weaker commodity prices and renewed input-cost shocks. The Farm Bill extension expires September 30, adding policy uncertainty to the financial picture. Tags: [farm income](https://www.fertilizerdaily.com/tag/farm-income/), [fertilizer prices](https://www.fertilizerdaily.com/tag/fertilizer-prices/), [nitrogen](https://www.fertilizerdaily.com/tag/nitrogen/), [phosphate](https://www.fertilizerdaily.com/tag/phosphate/), [Strait of Hormuz](https://www.fertilizerdaily.com/tag/strait-of-hormuz/), [United States](https://www.fertilizerdaily.com/tag/united-states/), [USDA](https://www.fertilizerdaily.com/tag/usda/) --- **About Fertilizer Daily:** Fertilizer Daily is the leading industrial media and discussion platform focused on covering efficient farming and plant cultivation practices on both domestic and international scales. 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