Aid For Economic, Weather-Related Disaster Assistance Pauses Two-Year Slide In Arkansas Net Farm Income

MARY HIGHTOWER

LITTLE ROCK, ARKANSAS

A two-year decline in Arkansas’ net farm income has been interrupted, but not because farming has suddenly become profitable, said Hunter Biram, extension economist for the University of Arkansas System Division of Agriculture.

The “Spring 2025 Arkansas Farm Income Outlook,” issued by the Rural and Farm Finance Policy Analysis Center said net farm income in Arkansas was expected to rise 22 percent in 2025 over 2024.

“Most of this increase is going to be driven by supplemental and ad hoc disaster assistance, from ECAP – the Emergency Commodity Assistance Program,” Biram said. “This disaster assistance is going to be from last year’s hurricanes that came through.”

Arkansas crops suffered damage from the remnants of Hurricanes Beryl and Francine.

Biram said the report projects Arkansas to see some $500 million to $600 million in weather-related disaster assistance.

While crop insurance indemnities are projected to drop by $119 million, direct government payments are set to nearly triple, reaching $1.02 billion in 2025, and will become the primary driver of farm income growth, the report said.

The pause in the decline is temporary.

Net farm income in Arkansas is projected to decrease by 25 percent to $2.8 billion in 2026, as direct government payments return to historical average levels while cash receipts decline for both crops and livestock, and production costs remain high. Net farm income averages $3.7 billion across the 10-year baseline projection, the report said.

Cash receipts down

Total cash receipts – the gross income farmers earn from selling their crops or livestock – are projected to decline by $544 million, as crop receipts and farm-related receipts drop. These declines are only partially offset by the 1 percent increase in livestock receipts, as beef prices rise.

Biram said that for corn, cash receipts declined 31 percent year over year, but when the last two years are counted, that decline is 42 percent.

“Corn took some big declines,” he said. Despite the likelihood that Arkansas farmers will be planting 210,000 more acres of corn this year, corn is still projected to see a big decline year-over-year. The acreage shift comes because “the fundamentals just look better for corn.

“Cotton receipts have declined 1 percent year over year, or 11 percent for the past two years. Soybeans saw a 6 percent decline in receipts year over year, but a 25 percent decline in the past two years,” Biram said.

The picture is somewhat better on the livestock side.

“Livestock receipts appear somewhat stable right now,” he said. “The biggest change in livestock is going to be from broiler chickenproduction which is projected to increase by about 73 million more pounds in 2025.”

The miniscule bright spot for farmers can be found in lower production costs driven mostly by lower  livestock feed expense resulting from low crop prices.

The University of Missouri’s Food and Agricultural Policy Research Institute was projecting a 30 percent increase in the U.S. net farm income.

Other key projections from the Arkansas Farm Income Outlook:

• Total crop receipts fall by 9 percent in calendar year 2025. Arkansas’ largest crops, soybeans and rice, are projected to see 6 percent and 8 percent declines in cash receipts in 2025. Crop receipts could see a further decline in 2026.
• Broiler and cattle receipts remain stable, supporting a 1 percent increase in total livestock receipts. Decreases in egg prices offsets an increase in production, bringing egg receipts down 4 percent in 2025.
• Production expenses decline further in 2025, by $326 million, as reductions in feed and purchased livestock expenses offset the increases in fertilizer, fuel and oil expenses. An additional decline in total expenses is projected for 2026.

“Positive profit margins in livestock production and one-time government payments will support farm liquidity in calendar year 2025,” said RaFF Director Alejandro Plastina. “Managing liquidity smartly will be key to protect farm operations from headwinds in 2026.”

Find the full report online.

The Spring 2025 Farm Income Outlook is co-published by the University of Arkansas System Division of Agriculture and RaFF at the University of Missouri, which provides objective policy analysis and informs decision makers on issues affecting farm and rural finances. The center collaborates with a number of states to develop farm income projections with local expertise.   ∆

MARY HIGHTOWER: University of Arkansas