In Arkansas, “there have been nearly 60 farm equipment auctions since December,” said Hunter Biram, extension economist for the University of Arkansas System Division of Agriculture. “That’s about 10 times more than what we would typically see in this time frame and that’s an indicator of just how serious the economic downturn is in Arkansas” agriculture.
Biram, who co-authored a report on net farm income in Arkansas, noted that it was only federal aid that halted a two-year slide. Net farm income was expected to continue its downward trajectory in 2026.
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.
“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.
However, the latest House and Senate versions of a federal spending bill now headed to reconciliation, offers some glimmer of hope, keeping farm safety nets largely intact, with some notable changes, he said.
“The Senate's version of the reconciliation package is almost exactly like the House version in terms of the farm safety net, which I find to be pretty encouraging,” Biram said.
There are a variety of safety nets in farming including ARC, or Agriculture Risk Coverage, and PLC, or Price Loss Coverage. These programs are administered by the Farm Service Agency, part of the U.S. Department of Agriculture.
The ARC program provides payments when the county revenue for a farm is less than a guarantee set based on historical data and market conditions. The PLC program provides payments when the realized price for a covered commodity falls below its effective reference price, or target price.
In the face of chronically low commodity prices, farmers urged Congress to raise reference prices. In the most recent report on net farm income for Arkansas, corn receipts dropped 48 percent since 2022; cotton declined 11 percent since 2023 and rice has fallen 8 percent since 2024. Soybean receipts are down 31 percent since 2022.
“A stronger safety net will certainly help those who have been able to withstand the economic downturn so far. Many farmers have not been as fortunate to make it to this point.” Biram said.
“On average, it's looking like there's a 15 percent increase in the PLC statutory reference prices across all of the crops,” Biram said.
The Agricultural Risk Coverage county guarantee was increased from 86 percent to 90 percent, and the maximum payment rate was increased from 10 percent of expected county revenue to 12.5 percent,” he said.
Biram also noted increases in premium subsidies in crop insurance. The supplemental coverage option premium subsidy rate would increase from 65 percent to 80 percent and other major multi-peril crop insurance products would see anywhere from a 3 to 5 percentage point increase. Additionally, the maximum coverage levels for the supplemental coverage option would increase from 86 percent to 90 percent.
