The Farm Credit System says the U.S. economy entered 2025 with key indicators in favorable positions. Expectations for first quarter growth have been reduced, however, by weaker personal consumption, higher imports, and uncertainty around changes in global trade.
FCS says the U.S. farm sector enters the uncertain trade environment and spring planting season with strong balance sheets and favorable liquidity. Farm income in early 2025 is being supported by payments to crop producers authorized under the American Relief Act as well as generally favorable returns for livestock producers. But, 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.
