05 September 2026, Washington, D.C.: Fertilizer expenses for U.S. farmers are projected to rise by 5.3 billion dollars, or 15.3 percent, in 2026, one of the sharpest cost increases in the U.S. Department of Agriculture’s (USDA) latest farm income forecast, even as the agency revised its overall net farm income estimate slightly higher than earlier in the year. The forecast, produced by USDA’s Economic Research Service (ERS), was published and reported on September 4, 2026.
The ERS now projects 2026 net farm income, a broad measure of farm sector profitability after expenses, at 158.4 billion dollars, up about 5 billion dollars from the agency’s February estimate. However, that figure still represents a 2.6 percent nominal decline from a revised 2025 net farm income of 162.7 billion dollars, or a 5.5 percent decline once adjusted for inflation. In other words, farmers are earning somewhat more than USDA expected earlier this year, but still less than they did in 2025.
The improvement in income projections is being outpaced by rising costs. Total production expenses for 2026 are now forecast at 492.8 billion dollars, up 21.2 billion dollars, or 4.5 percent, from 2025. Besides fertilizer, the largest cost increases are in fuel and oil, up 4.8 billion dollars or 28.8 percent, and livestock and poultry purchases, up 7.4 billion dollars or 11.4 percent. On the revenue side, crop cash receipts are forecast to rise 14.6 billion dollars, or 6.1 percent, to 253 billion dollars in 2026, while livestock cash receipts are expected to decline by 16.4 billion dollars, or 5.4 percent, even though cattle and calf receipts specifically are projected to climb from 133.7 billion dollars to 140.7 billion dollars.
Faith Parum and Daniel Munch, economists with the American Farm Bureau Federation (AFBF), reviewed the ERS data and noted that while the upward revision to income is welcome news for farmers, record high production costs, driven in large part by fertilizer and fuel, continue to squeeze margins across most major crop enterprises. Brad Lubben, director of the North Central Extension Risk Management Education Center at the University of Nebraska-Lincoln, said the report underscores how much of any income gain this year is being absorbed by input cost inflation rather than translating into stronger farm level cash flow.
The fertilizer cost increase comes against a backdrop of long standing concentration concerns in the U.S. nitrogen fertilizer market, where a small number of large manufacturers account for the majority of domestic production capacity, along with global supply pressures tied to natural gas prices, which are a key input for nitrogen fertilizer manufacturing, and ongoing logistics and trade disruptions affecting potash and phosphate imports.
For international agri-input markets, the ERS report is a useful benchmark because U.S. farm input cost trends often move in tandem with global fertilizer pricing, given how interconnected nitrogen, phosphate and potash markets are worldwide. When U.S. farmers face a 15 percent jump in fertilizer costs in a single year, it typically reflects broader global price and supply dynamics rather than a purely domestic phenomenon, meaning Indian and Latin American growers, cooperatives and fertilizer importers are likely navigating similar cost pressure in their own procurement cycles. Indian fertilizer policymakers in particular track U.S. farm economics data as one indicator among several when assessing global affordability trends that can inform subsidy and import planning decisions.
The September forecast is one of two major ERS farm income updates USDA issues each year, with the next major revision expected around February 2027 alongside updated planting intentions data. Farm groups are expected to cite the fertilizer cost figures in ongoing conversations with lawmakers about farm bill support levels and crop insurance adequacy heading into the 2027 planting season.
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