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Spring 2025 North Dakota Farm Income Outlook: Government Payments Drive Temporary Income Surge Amid Weaker Market Conditions
- CAPTS NDSU
- May 26
- 4 min read
The latest North Dakota Farm Income Outlook, jointly produced by the Rural and Farm Finance Policy Analysis Center (RaFF) at the University of Missouri and the Center for Agricultural Policy and Trade Studies (CAPTS) at North Dakota State University, presents a cautiously optimistic projection for North Dakota’s agricultural sector in calendar year 2025. After a period of suppressed profitability and weather-related setbacks, net farm income (NFI) in North Dakota is projected to reach $4.79 billion in 2025, a 39% increase relative to 2024. However, this rebound is largely policy-driven and not rooted in improved market fundamentals, underscoring the temporary nature of the income gains.
A Temporary High: Understanding the 2025 Net Farm Income Surge
The most notable result in this outlook is the projected 39% increase in NFI in 2025, North Dakota’s highest farm income since 2021. As shown in Figure 1 (Projected Net Farm Income in North Dakota, 2023–2026), this rise reflects a strong counter-cyclical policy response rather than a structural recovery in agricultural markets.
Figure 1: Projected Net Farm Income in North Dakota, 2023–2026
Direct government payments are forecast to reach $3.0 billion, up from just $627 million in 2024. This $2.4 billion increase accounts for more than the entirety of the projected NFI gain. These payments reflect Congressional efforts to stabilize the farm economy after two challenging years marked by drought, input cost volatility, and depressed commodity prices. They also align with federal measures to offset economic and disaster-related losses, which have grown more frequent and severe.
The projected NFI rise occurs despite declining total farm receipts and stable yet elevated input costs, both of which signal continued stress in commodity markets and cost structures. Specifically, crop receipts are expected to fall by 10% in 2025, while livestock receipts are forecast to grow modestly by 5%, offsetting some of the weakness on the crop side. Inventory values are also projected to decline.
Crop Sector Pressures Dominate Receipts Outlook
The North Dakota crop sector is facing a broad-based revenue decline, with total cash crop receipts expected to fall by $1 billion to $8.83 billion in 2025. This represents a retreat from the high levels recorded during the 2022–2023 period, largely due to declining receipts from major field crops:
Wheat: Cash receipts are projected to decline by 12% ($255 million), driven by a reduction in planted area and expected yield normalization after a record year.
Soybeans: Receipts are expected to drop by 8% ($201 million), as lower prices and marketing volumes from the 2024 harvest carry over into 2025.
Canola: The steepest drop is anticipated in canola receipts, falling 30% to $824 million after a record production year in 2024 left little inventory for sale in 2025.
Corn: Despite a larger crop, corn receipts are projected to decline by 3%, as lower prices offset gains from acreage expansion.
The declining receipts contrast sharply with the relative stability of production costs, creating margin pressures that—absent policy support—would likely have further depressed farm income.
Livestock Sector Offers Modest Gains
On the livestock side, total cash receipts are projected to grow by $92 million (5%), buoyed by record-high steer prices and partial recovery in cattle marketings. Cattle and calves account for over 80% of livestock receipts in North Dakota, and a 6% increase in cattle cash receipts is the primary driver of sectoral growth. Pig receipts are also projected to rise by 8%, although they remain a small share of total revenue. Receipts from dairy, poultry, and eggs are expected to remain flat.
However, the long-run outlook remains uncertain. Livestock receipts are projected to decline by 4% in 2026, reflecting tight beginning inventories and structural constraints in herd rebuilding following drought-induced liquidation.
Cost Structure and Expense Trends Remain a Concern
Production expenses are projected to remain essentially flat at $10.69 billion in 2025. While fertilizer, pesticide, and feed costs are expected to decline slightly (by 2–3%), other major categories such as seed, fuel, and oil are projected to remain steady. Labor costs are projected to rise for the fourth consecutive year (+5%), and purchased livestock expenses are expected to hit a record high of $217 million, amid stronger cattle prices.
The stability in expenses, despite declining receipts in the crop sector, signals a continuation of the margin compression trend observed in recent years. In the absence of extraordinary government support, these cost dynamics would significantly erode profitability.
Looking Ahead: A Reversion in 2026 and Beyond
The income recovery in 2025 appears short-lived. The forecast for 2026 projects a 48% decline in North Dakota NFI, falling to $2.51 billion. This drop reflects the return of direct government payments to historical levels and the continued deterioration in crop receipts. Livestock revenue is also expected to decline due to lower marketing. These shifts signal the fragility of the current recovery and the persistent volatility of income in the state’s agricultural sector.
Over the 10-year baseline period (2025–2034), average NFI in North Dakota is projected at $3.03 billion, indicating a gradual stabilization at levels below the temporary 2025 peak.
Caution and Planning Amid Uncertainty
The report highlights that the 2025 income surge is not a turning point but rather a reprieve facilitated by policy support. Market fundamentals remain mixed, and risks related to weather, input cost inflation, and trade uncertainty remain elevated. The report also explicitly notes that the forecasts do not yet incorporate the potential impacts of new tariff announcements or market uncertainty, which could further influence the income trajectory.
Given these dynamics, the report emphasizes the importance of strategic planning, capital management, and risk mitigation for producers. As policymakers and farm organizations assess support programs, this outlook provides an important benchmark for anticipating the challenges ahead.
📘 Read the full report and download the accompanying data tables at:
Access the accompanying data tables at:
For questions and feedback, contact:
📩 Alejandro Plastina – aplastina@missouri.edu
📩 Sandro Steinbach – sandro.steinbach@ndsu.edu
