The newest numbers from the U.S. Department of Agriculture show Washington’s farmers and ranchers went from last in earned income in 2024 to 30th in 2025. The data offers some hints about how the rebound happened and why it might not last long.
In 2024, the USDA numbers looked grim for Washington’s agricultural future with earned income recorded at -$238 million. The 2025 numbers show a remarkable rebound of about $1.27 billion in earned income for the year.
That kind of recovery seems unbelievable in one years’ time. Sifting through the data to find out what contributed to the turnaround is vitally important for drafting new policy, better recommendations for the future, and planning for what might be ahead. There are a few clues in the numbers that help tell the turnaround story.
In 2024, the USDA noted Washington state had 31,800 agricultural operations and approximately 13.8 million acres in production. The total number of farms and acres in production declined in 2025 to 31,500 and 13.7 million acres, respectively, or a loss of about one farm and 274 productive acres a day, every day during the year. This, too, is a slower rate of attrition than was noted in the 2022 USDA Census of Agriculture for our state.
The first major factor contributing to the 2025 rebound for our state is the “inventory adjustment.” In the earned income data set, the inventory adjustment calculates the value of stored crops and/or unsold livestock and converts them into their real cash value in the year in which they are sold. In the 2024 data set, Washington’s farmers and ranchers finished the year with -$169.3 million in inventory. By the end of 2025, the agricultural community had converted that negative inventory into $7.7 million in profit, a total gain of about $177 million year-over-year. What that really means is in 2024, farmers and ranchers had apples, potatoes, wheat, corn, even livestock, valued at $169.3 million that was not sold and recorded as debt. In 2025, that $169.3 million worth of agricultural products, plus enough to show a $7.7 million profit was sold. This reversal does not mean our agricultural community is out of the income woods.
The second, and probably more important factor, in the year-over-year rebound for Washington’s agricultural community came in production expenses. Overall farm production expenses declined from about $13.9 billion in 2024 to $12.6 billion in 2025. Some of the decline in operating expenses can be attributed to the reduction in the number of farms and ranches operating in the state.
While overall production expenses declined, it is worth highlighting the following areas within production expenses that showed significant shifts either higher or lower.
Farm labor is a perennial topic of discussion in our state. Overall labor expenses increased, despite production expenses decreasing, between 2024 and 2025. Farms reported labor expenses of about $3.5 billion in 2024, those expenses escalated to nearly $3.6 billion in 2025. During the same period, contract labor expenses declined sharply from $1 billion to $109.8 million. The USDA defines contract labor as a hired “independent contractor, crew leader, or service provider who brings and manages workers for specific time-limited tasks (like harvesting, packing, or custom spraying).” Likely, the decline in contract labor denotes a decline in the hiring of specialized crews to do one-off work like thinning, pruning, or weeding and, instead, assigning those tasks to workers already employed by a farm.
Numerous reports of farmworkers seeking secondary employment and farmers maintaining shortened shifts to keep labor costs low are not a viable long-term solution to labor shortages and the overtime law. Washington state needs to consider a new policy that encompasses the needs of both farmworkers and employers by listening to the pleas of four years’ worth of legislative testimony in House and Senate hearings that have asked for a reworking or repeal of the overtime law. The USDA data backs up those pleas by showing continued cost escalations.
There has also been a steady increase in “manufactured inputs” which include items like fertilizer, lime, pesticides, fuel and oil, and electricity. Despite promises from the legislature, not all farms and ranches have been given a reprieve from Climate Commitment Act taxes. As the conflict between Russia and Ukraine continues, the price for fertilizer steadily increases because much of the world’s supply of urea, a key ingredient for commercial fertilizer, is produced in the Crimea.
Other key agricultural inputs like lime, pesticides, and electricity all increase in price annually as the market changes. State policies cannot address globally sourced ingredients, but they can incentivize local companies to create homegrown solutions and market to local purchasers. If the local business environment was made more advantageous for businesses of all varieties, local solutions to some of these escalated costs would likely present themselves.
The numbers in the latest USDA report don’t show an agricultural sector that has recovered from poor policies; instead, the numbers show farmers and ranchers taking advantage of good market conditions and selling inventory to pay bills. If Washington state wants to see real agricultural recovery, it is time to start incentivizing creative solutions to problems like lack of materials from global suppliers, inability to pay overtime to farmworkers who need more hours, and to bring people directly involved in agriculture to the table to help craft those solutions. Now is the time to change that so the next round of USDA numbers shows even more improvement.
