Nearly half (46%) of U.S. farmers believe we are on the brink of a farm crisis, according to a new survey released by the National Corn Growers Association. And 65% are more concerned now about their farm financials than a year ago.
The economic conditions for many sectors in agriculture have been deteriorating for some time. John Newton, executive leader at Terrain, says this is the third or fourth year for many row crop producers to be facing profitability at break-even or below break-even margins.
He points to three trade-related examples driving challenges in ag sector profitability:
- China is out of the soybean market
- Canada hasn’t bought any U.S. wine
- The tree nut industry is facing pressures
“The whole farm economy is facing challenges maybe outside of the livestock markets,” he says. “We need an above-all approach to improve the farm economy.”
Newton says cash receipts for crop farms (adjusted for inflation) have declined by $71 billion in the last three years, which is the largest amount of all time.
What Can Change The Trajectory?
The news of the federal reserve lowering interest rates one-quarter of a percent is a welcome update.
“We’ve been waiting on this for some time,” Newton says. “The expectation is we need two more yet this year.”
He goes on to say for the average farmer, while this is positive news and increases some ability to take on more credit affordability moving into the spring, it’s not quite enough to change the dynamics of their total financial outlook. As NCGA reports corn margins are at a loss of $161 per acre for new crop in 2025, many farmers will be looking to take short-term debt and roll into long debt to help navigate the tough economic environment.
“The reality is we still have 10-year treasury notes and nearby treasury notes really tightly bundled together. It makes it difficult to restructure any debt for a farmer or find cost savings. What we need to see is more confidence long term in the economy —widening the spread between nearby treasuries and the 10-year treasury. When we have that, it gives lenders the flexibility to work with farmers to restructure debt and create cost savings in doing so,” Newton says.
As a longer-term domestic demand builder, Newton eyes year-round E15 as a potential boost to the corn farmer’s bottom line. NCGA reports for each 1% increase in the blend rate, the range of corn used is 200 to 400 million bu. of corn.
“While it may not do anything to eat into the 2 billion bu. we’ll have in ending stocks for the new crop, in five to six years, you’ll have the infrastructure for the corn we’ll continue to supply,” Newton says.
As for recent actions by Congress, and USDA Secretary Brooke Rollins saying financial aid may come as early as this fall to farmers, Newton says those are signs of how lawmakers and the administration are evaluating what they can do and what tools are in the toolbox.
However, he’s quick to point to the limitations they have.
“Of the $31 billion in the American Relief Act, only $14 billion will go out the door. The One Big Beautiful Bill put $66 billion in farm programs and risk management — but not until October 2026,” Newton says. “You have a gap. Even though congress has responded, it’ll take time for that to hit farms across the country.”
