A method for controlling a wind farm having a power output constraint is disclosed. The method may include operating a plurality of wind turbines within the wind farm. Each wind turbine may include a baseline power output and a maximum power output. The baseline power output may be defined by a control-limited power curve as a function of wind speed. In addition, the method may include comparing a total power output for the wind farm to the power output constraint of the wind farm, controlling the operation of at least one wind turbine of the plurality of wind turbines to provide an increased power output for the at least one wind turbine when the total power output is less than the power output constraint.