The Farm Credit System says the U.S. economy entered 2025 with key indicators in favorable positions. However, expectations for first quarter growth have now declined after the administration change due to weaker personal consumption, higher imports, and uncertainty around changes in global trade. FCS says the U.S. farm sector entered the uncertain trade environment and spring planting season with strong balance sheets and favorable liquidity.
Farm income in early 2025 is supported by payments to crop producers authorized under the American Relief Act, which signed by President Biden in December, as well as generally favorable returns for livestock producers. But, recent extended periods of lower commodity prices, particularly for cash grains and tree nuts, are evidence of increasing risk.
Negative retaliatory tariffs on U.S. agricultural products will depend on tariff levels and duration and present additional uncertainty for the sector. Farmland values are showing signs of weakness and increased volatility, particularly for lower-quality land and in regions producing the commodities currently at weaker prices.