Ag Economists Monthly Monitor

New Data: Is U.S. Agriculture Facing a Typical Cycle or a ‘Geopolitical Reset’?

Thu, 30 Apr 2026 18:56:51 GMT

The latest Farm Journal Ag Economists’ Monthly Monitor shows a bit more pessimism from respondents on the current state of the ag economy as well as how the present compares to one year ago.

Farm Journal regularly reaches out to a vetted list of 80 ag economists from across the industry. Providing directional insights, 10 of the 16 economists who responded to the April survey believe the ag economy is in a worse state than it was a year ago. Slightly fewer than half expect conditions to be “somewhat better” in 12 months, while one-third still anticipate further decline.

“I just haven’t really changed my level of pessimism regarding this year. This is going to be a tough year. There’s no doubt about it,” says Michael Langemeier with Purdue University.

The conflict in Iran weighs heavy on economists’ minds; high fertilizer prices and high energy costs dominate concerns. This overshadows the previous looming concerns of the trade fragility and export deficit. The previously announced government payments are in the rearview mirror.

Wes Davis from Meridian Agribusiness Advisors agrees that profit margins squeezed by high input costs are the top concern.

“When we talk about the more pessimistic view of the ag economy, fertilizer prices driven by the outbreak of war in Iran is certainly top of mind,” he says.

But Davis says there have been some positive tailwinds for commodity prices over the past few months, and there’s ‘no slowdown’ in demand for animal proteins.

“Those tailwinds continue to be present,” he says.

A Fundamental “Structural Shift”

Three-quarters of the economists believe U.S. agriculture is undergoing a permanent structural shift rather than a typical cyclical phase. They cite increased competition from Brazil, changing trade policies and the rapid adoption of artificial intelligence as factors reshaping the industry for the long term.

(Farm Journal Survey, April 2026)

“I’m thinking of this one as the geopolitical and input reset,” Davis says. “What I mean by that is, where things go and how we interact with the global ag economy when this cycle or when this shift is over will be different. The way that farmers get their agrichemicals, their fertilizers, their vitamins/trace minerals for feed, their tractors will all be different.”

Davis brings up the farm bill as another example. He questions whether the structural shift in policy is moving away from supporting “commercial farm preservation” and more toward “rural economic development.” This distinction could change the long-term framing of ag policy.

While Davis’ perspective is in the majority, Langemeier offers a counterpoint. He says this today reminds him a lot of the 2014 to 2019 period when there were about six years in a row of relatively low crop margins.

“I know there are a lot of changes going on, and certainly we’re worried about the competitiveness of U.S. agriculture compared to Brazil, particularly for soybeans,” he says. “As one example, I think the AI developments actually could be positive, and so I don’t necessarily see why that would necessarily mean a structural shift that would be negative.”

Geopolitical Impacts on Input Costs

The conflict in Iran and broader Persian Gulf instability are identified as primary drivers of agriculture’s economic health. Economists are specifically concerned about how these tensions are “pinching margins” by driving up the costs of energy and fertilizer while commodity prices remain relatively low.

“The negative impact of the Iran conflict has been increased fertilizer and energy prices. I did some crop budget calculations: If you hadn’t bought your fertilizer and most of your fuel is yet to be purchased prior to the Iran conflict that’s a pretty large effect on corn break-even price. I calculate it to be 25 cents a bushel. And when your break-even price is already at $5, which is way above what the futures price adjusted for basis is this fall, that’s certainly not helping matters,” he says.

It’s not just fertilizer and fuel. It’s other input categories in row crop agriculture and livestock production as well.

Noting input prices are 15% to 20% higher than pre-COVID levels, Davis points out that prices for active ingredients have gone up 20% to 30% since the conflict in Iran started.

“This continues to exacerbate that question around how long are we going to continue to see input prices increasing?” Davis says. “The other things that are less talked about but are starting to show up in pricing data are things like low inclusion additives for livestock feeds, so things like vitamins and trace minerals are starting to show up in pricing increases as well as they are being disrupted in trade flow and a slowdown of exports from China.”

Langemeier adds to the question around input pricing increases, saying it’s unknown if the uncertainty and elevated costs will go into 2027.

Strategic Deferment of Capital Expenses

To manage tight margins, farmers are expected to prioritize paying down debt over investing in land, equipment/technology, capital improvements and labor. Machinery and equipment purchases are the top items likely to be reduced or deferred in 2026, with half of economists also warning that cuts to fertilizer and crop protection could start impacting yields.

(Farm Journal Survey, April 2026)

“The number one thing as always is farmers want to be paying down debt,” Davis says. “Equipment is going to continue to be in a trough, and my expectation is that tractor sales year over year are still going to be 10 to 15% lower this year versus last year.”

He also foresees a continued transition to generic crop chemicals for the next two years.

Davis makes a distinction regarding which farms could survive this pinch on profitability. He describes a “tale of two economies” where disciplined farms with high liquidity can still find financing to grow, while those who grew aggressively at the peak of the cycle are facing a “pullback” from lenders. This adds a layer of nuance to the “commercial viability” discussion.

Langemeier provides a sobering warning about how farmers are managing the third year of low margins. He notes a trend of farmers starting to borrow against their land (non-current debt) to cover operating expenses — a pattern seen during the 2014 to 2019 downturn. He emphasizes the urgent need for “contingency planning” and a “Plan B” for debt repayment this fall.

“Usually, farms will try to cover their owner withdrawals and repay debt before they even think about making down payments on machinery. Capital expenditures always get squeezed when cash flow is tight. That’s just the way it works. We’re in one of those situations where capital expenditures are just going to be lower, primarily machinery and buildings,” Langemeier says.

Analysts Fear 2027 Could Be The Toughest Year Yet For Farm Margins

Thu, 30 Apr 2026 21:27:02 GMT

The most important tool on many U.S. farms this spring isn’t a tractor or a high-speed planter — it’s a pencil. Faced with climbing fertilizer costs, some growers are still hunched over spreadsheets and notepads as April shifts to May, trying to determine if corn or soybeans can pencil out.

Market analysts Naomi Blohm of Total Farm Marketing and Matt Bennett of AgMarket.net say they believe the current planting season remains in a state of flux as farmers’ input budgets are tightened to the breaking point.

According to a recent American Farm Bureau Federation survey, 48% of Midwest farmers say they cannot afford their full fertilizer needs for this season.

“Farmers who haven’t paid for fertilizer, are running behind, or are stuck out of the field due to weather are having to factor that into their decision-making,” Bennett says.

Blohm is seeing this reality play out in real-time with her clients. “Two of them openly shared this [past] week that they booked some fertilizer early and went with corn on those acres,” she reports. “But for the remaining acres, they had to stop and think it through and ultimately decided to switch to soybeans.”

Bennett notes that while soybean futures aren’t necessarily “explosive,” they could be a safer bet for cash-strapped operations. “If I’m a grower, and I’m sitting here trying to figure out whether I can make money putting $1,000, $1,100 [of nitrogen an acre] into this corn crop, I look over on the board on beans, and you’re looking at a price a lot of growers can make work just with average yields,” he says.

Blohm adds that what farmers decide to plant will be much clearer by USDA’s June 30 acreage report.

A Three-Year Financial Drain

The current financial stress isn’t happening in a vacuum. Bennett points out that consecutive years of financial pressure have taken their toll across the Midwest.

“The liquidity drain over the last three years has made it really tough for people, and we are even seeing an equity drain for some,” Bennett says. “When cash is this tight, it highlights why you might plant soybeans if you don’t have your anhydrous or urea on yet.”

The fertilizer crisis is fueled by global energy markets and geopolitical instability. Blohm points to India’s recent, aggressive moves to secure supply as a sign of things to come.

“I saw that India this week booked what they needed for fertilizer at double the cost,” she says. “But they don’t have a choice really, based on the amount of wheat that they grow in the world. They have to have a good wheat crop there, and they need that fertilizer.”

Bennett adds the issue isn’t just price — it’s access. “India bought 2.5 million tons of urea to front-run a potentially problematic situation,” he notes. “Disrupted natural gas facilities create a cascade effect that impacts anhydrous and urea production globally.”

2027: “It Scares the Daylights Out of Me”

While 2026 is beyond difficult, analysts are sounding the alarm for 2027. During an afternoon AgriTalk segment , host Michelle Rook asked if 2027 will be even worse.

“It scares the daylights out of me,” Bennett replied. “Projected cash flows and breakevens for 2027 don’t look good at all. Even if someone talks about $5 corn, you have to look at what you’ll have invested in it.”

Blohm agrees that the uncertainty is unprecedented. “Producers have to stay on their toes,” she says. “We don’t know if this shock will be a springboard for higher prices or if it will simply compress margins further.”

The Rotation Debate: Markets vs. Agronomics

How will crop rotations look by 2027? Farm Journal regularly reaches out to a vetted list of 80 ag economists from across the industry. Providing directional insights, the latest Ag Economists’ Monthly Monitor shows almost half of the respondents (seven of 16) to the April survey expect soybeans to gain more acres due to renewable diesel demand.

Northeast Iowa farmer Tim Recker sees some potential for a shift. “Renewable diesel demand underpins my local market,” he says. “I see value in policies that turn surplus crops into fuel, but we have to remember that Brazil is still eating our lunch in the global market.”

Central Illinois grain producer and hog producer Chad Lehman has a more cautious outlook.

“Pigs need corn,” Lehman says. “There are real risks with bean-on-bean rotations, including yield penalties and agronomic challenges. Even with more crush capacity, soybean meal prices remain strong, which reinforces the need for steady corn production.”

University of Missouri Agricultural Economist Ben Brown suggests that while “swing acres” might lean toward soybeans next season, many farmers will stick with their rotations.

“I believe 85% of acreage is determined by rotation,” Brown says. “That leaves only 15% to be adjusted based on outside influences.”

Long-Term Risks Of Changing Rotations

Shifting rotations in 2027 can’t be a financial decision only; it carries long-term agronomic consequences. Connor Sible, associate professor and row-crop field researcher at the University of Illinois, cautions that fertilizer cuts made this season could contribute to nutrient depletion in soils.

“If we pull back on nutrients now, those minerals are going to have to come from somewhere — likely the soil supply,” Sible says. “We want to maintain a healthy system over time, so we can’t go too far with input pullbacks.”

For those farmers already eyeing a move to soybeans in 2027, Sible recommends starting the planning process now.

“Think about what herbicide programs you are putting out this summer,” he advises. “You need to account for potential carryover effects if you switch the rotation in a field that was planned for corn to go with soybeans.”

You can hear more from farmers Chad Lehman and Tim Recker and their thoughts on the year ahead in this discussion on AgriTalk, available at the link below:

A Crisis of Confidence: Inside the Ag Economy and How Farmers Are Preparing for What’s Next

Wed, 11 Feb 2026 15:11:32 GMT

If there is one word that defines the U.S. agricultural economy in early 2026, it’s confidence, or more precisely, the lack of it. It’s not just an eroding confidence in data, but declining confidence in policy and whether the traditional tools used to stabilize farm income still work.

The first Farm Journal Ag Economists’ Monthly Monitor of 2026, coupled with input from producers and ag retailers, reveals an industry that broadly agrees it is in trouble, but sharply disagrees on why, who should fix it and how farmers will survive it.

Across the economists, farmers and retailers surveyed, the results paint a picture of a crop sector stuck in recession, magnified by the squeeze caused by high input costs and low commodity prices.

Factors Driving the Health of the Ag Economy Today

Economists in January’s survey pointed to a familiar but intensifying split in the ag economy: strength in livestock, particularly beef cattle, versus persistent financial stress across much of the row-crop sector. Tight cattle supplies and strong global demand for animal protein continue to support profitability in the livestock sector, even as economists warn that future prospects remain uncertain. At the same time, global surpluses of corn, soybeans and wheat, combined with weak export demand for certain commodities, are weighing heavily on crop prices.

(January 2026 Ag Economists’ Monthly Monitor)

Across nearly all responses, margin pressure emerged as a dominant concern. Elevated input costs, rising interest rates and tightening access to operating loans are pushing break-even costs above market prices for many producers, especially in grain production.

Economists repeatedly cited policy uncertainty, ranging from trade relations to biofuels policy, as a pivotal factor. While government assistance and expectations of additional ad hoc payments are providing some near-term relief, many note those funds are largely being used to service debt rather than reinvest in operations, underscoring ongoing liquidity challenges in farm country.

In the anonymous survey, when asked the two factors driving the health of the ag economy today, the economists said:

“Continued strength in the cattle business and that the world is awash in corn, wheat and soybeans.”
“Cost-price margins: Agriculture’s economic health is being driven first by whether commodity prices are high enough to cover still-elevated input, labor and operating costs.”
“Policy uncertainty hurting export demand and biofuels demand — cattle receipts providing lucrative returns but with uncertain future prospects.”
“Break-even costs above market prices, demand uncertainty on multiple fronts.”
“Persistent high input costs and uncertainty regarding trade, particularly trade with China.”
“Access to operating loans and the amount of debt producers are carrying from the previous two years of down revenue.”
“Positives include strong beef cattle margins and relatively stable land prices; negatives are burdensome crop supplies, high input prices and very low liquidity.”

A Crop Sector in Recession By Consensus

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes )

On the state of the economy itself, there is little debate:

76% of economists say the U.S. crop sector is in a recession.
74% of producers agree.
More than 76% of economists believe conditions are worse than a year ago.

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes )

Economists warn this environment is accelerating consolidation, with 72% expecting low prices and high costs to push weaker operations out of the market with 80% of retailers saying it will increase consolidation in the industry.

When you look at what’s preventing profitability, high input costs remain the dominant hurdle for producers:

67% of producers cite input prices as their biggest obstacle.
62% of economists agree that high input costs are a hurdle for farmers in 2026.

Sticky costs for fertilizer, labor, interest rates and materials, combined with soft commodity prices, have pushed many producers to sell at or below break-even.

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes)

“Maximum Is Rarely Optimum:” How Farmers Say They’ll Stay Alive and Competitive in 2026

When asked a simple but heavy question: “What can you do to be successful in 2026,” farmers didn’t sugarcoat the challenge. Their answers reflect pressure, fatigue and uncertainty. But underneath the blunt language is a clear, consistent strategy emerging across operations: protect cash, defend ROI and stay flexible long enough to outlast the cycle.

While several producers said they’re looking to diversify as a key to success, the most dominant theme was cutting costs to the bone, especially when it comes to capital spending. Farmers repeatedly emphasized zero, or near-zero, capex, delaying equipment upgrades and scrutinizing every purchase.

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes )

The mindset is not panic, but discipline. In this month’s survey, farmers said the key to success is:

“Zero capital spending or as close to zero as possible.”
“Don’t buy anything that isn’t absolutely necessary.”
“Hold off on major capital expenditures.”
“Ask yourself before you purchase something, is it a want or a need. Wants can break you fast.”

Many farmers framed this as a return to fundamentals: preserving working capital, maintaining flexibility, and avoiding irreversible decisions in an uncertain margin environment.

The Federal Aid Gap: Band-Aid or Lifeline?

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes )

Few issues expose the disconnect between economists and producers more clearly than federal aid.

There is broad agreement on one point: Ad hoc farm payments are not a long-term solution. Just under 60% of both economists and producers describe them as “a Band-Aid that won’t heal the wound.”

January 2025 Ag Economists’ Monthly Monitor

(Lori Hayes )

Beyond that, thoughts on federal aid differ.

51% of producers believe more than $20 billion in additional aid is required to stabilize the ag economy.
28% of economists believe no additional aid is needed at all while the remainder are split across ranges from $11 billion to $20 billion.

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes)

This gap matters because it directly influences behavior. Both groups agree that government policy will be a major driver of planting decisions in 2026, with a clear bias toward corn . Expectations around payments, programs and biofuels demand are shaping acres before a seed ever goes in the ground.

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes )

Biofuels: One Industry, Two Visions of Salvation

No policy area reveals the philosophical divide between “on the ground” agriculture and “on the spreadsheet” analysis more clearly than biofuels. Producers want more demand now, whereas economists are looking five to 10 years out.

Producers and retailers overwhelmingly prioritize E15 expansion, viewing it as the single fastest way to generate real, immediate demand for corn and reduce reliance on government support.

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes)

Economists, while supportive of E15, are more focused on structural, longer-term demand drivers, particularly:

45Z tax credit
Development of Sustainable Aviation Fuel (SAF) markets

Among economists, 39% ranked the 45Z tax credit as the most impactful policy, while SAF ranked much higher than it did among producers where 44% ranked SAF as least impactful.

The Collapse of Trust in USDA Data

USDA’s January Crop Production Report was a point of contention last month. With much debate about the validity of the latest yield, acreage and production data from USDA, Farm Journal’s January survey results is the near-universal erosion of trust in USDA data, not only among producers, but also economists and retailers.

68% of economists say they are not as confident in USDA reporting as they were in the past.
73% of producers agree.
78% of retailers say their confidence in USDA has waned.

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes)

For economists, the concern centers on revisions, lagging indicators and the challenge of modeling markets amid policy uncertainty. For producers, the distrust is far more emotional and personal. Open-ended responses frequently referenced “market manipulation,” “bearish curveballs” and a sense that official numbers no longer reflect what’s happening at the farm gate.

In a market environment already defined by thin margins, the loss of confidence in baseline data further complicates marketing, risk management and lending decisions. When trust in the numbers erodes, so does the ability to plan.

Political Support Remains, But Confidence Is Slipping

One year into the Trump administration, producers remain broadly supportive of the president. But confidence in Washington’s ability to improve the ag economy is fading.

52% of economists say they are less confident the administration can improve agriculture.
44% of producers report declining confidence as well.

January 2026 Ag Economists’ Monthly Monitor

(Lori Hayes)

The divide between the groups is notable. Only 8% of economists feel more confident than a year ago, while 34% of producers say their confidence has increased, suggesting optimism on the farm still exists, even as economists grow more skeptical.

Trade uncertainty, shifting biofuels policy signals and questions about the future of ad hoc aid have all contributed to a sense that political alignment does not automatically translate into economic relief.

Strategy vs. Survival

Where the survey becomes most revealing is in the open-ended responses about survival. Economists see a severe but cyclical downturn. Many producers see a structural breaking point.

Economists speak the language of optimization. Their recommendations include:

Margin-first decision-making
Defensive marketing
Strategic planning
Focusing on high-productivity acres
Driving down per-unit input costs

Producers speak the language of survival, saying the key to weathering this story will be:

“Find an off-farm job”
“Send my spouse back to work”
“Sell out”

Some responses went further, referencing bankruptcy and financial collapse, a level of personal desperation absent from economists’ professional analysis.

One producer wrote: “I am facing financial crisis and homelessness … in the worst financial situation ever.”

An economist, by contrast, said: “Key to profitability lies in driving input costs down… a shift from maximizing inputs to optimization.”

Navigating 2026: From Maximum Yield to Maximum ROI

Despite the pressure, confidence in farmers themselves remains surprisingly strong.

Between 62% and 80% of respondents believe producers will find a way through, by abandoning the long-held pursuit of maximum yield in favor of maximum return on investment.

January Ag Economists’ Monthly Monitor

(Lori Hayes)

How that transition looks will vary, according to economists and producers, including:

More defensive marketing
Reduced input intensity
Greater scrutiny of every acre
More off-farm income
Tough conversations with lenders

The 2026 ag economy will not be defined by a single policy fix or market rally. It will be shaped by trust, or the lack of it, by how quickly demand can be grown without government intervention and by how much pain producers can absorb before the structure of the industry permanently changes.

Bottom Line for the Ag Industry

The U.S. ag economy enters 2026 in a clear crop-sector recession, but the deeper crisis is one of confidence. High input costs, weak prices, policy uncertainty and eroding trust in data have pushed many producers from planning for profitability into fighting for survival. Economists largely view the downturn as cyclical and manageable through optimization, while farmers experience it as a structural stress test on their operations and livelihoods.

How 2026 ultimately unfolds will depend less on short-term aid and more on rebuilding trust, growing demand without permanent government support and farmers’ ability to preserve cash, adapt quickly and endure a prolonged margin squeeze.

Fertilizer Prices Top List of 2026 Profitability Threats as Global Supply Tightens

Wed, 11 Feb 2026 19:00:02 GMT

When Farm Journal asked economists, farmers and ag retailers what could threaten profitability in 2026 in the latest Ag Economists’ Monthly Monitor , fertilizer prices rose to the top. Despite farmers cutting back on fertilizer and increased political scrutiny, analysts say the odds of meaningful relief remain slim.

“There’s never a moment where I like to say prices can’t come down,” says Josh Linville, vice president of fertilizer at StoneX Group. “Because the second you do that, the market will humble you. But when I look at everything that’s happening globally, and I look at how little time we really have between now and the start of spring, I see a lot more roads that lead to flat or higher prices than I do to lower ones.”

Cutting Back Fertilizer Has Limits

Farmers are clearly responding to high prices, particularly on nutrients where application can be adjusted. Linville says phosphate took the brunt of those cuts last fall.

“If you go back to the fall season, we believe phosphate application in North America was down about 20% from normal,” Linville said at the 2026 Top Producer Summit . “That’s exactly what we expected to see. We had high fertilizer prices, low grain prices and phosphate sitting there saying, ‘I’m the highest-cost input, and I’m variable-rate.’ If you’re a farmer looking to cut costs, that’s where you go first.”

What happens next remains uncertain, and if you ask Linville, that uncertainty itself is a risk to the market.

“The question we don’t know yet is what that means for spring,” Linville says. “Is spring demand down another 20%? Or does some of that fall reduction just get pushed into the spring window?”

Even with reductions, acreage levels keep overall demand elevated.

“At the end of the day, we’re still talking about planting roughly 93 million acres of corn in 2026,” Linville says. “There are people making a very good argument for 95 million acres. I’m not ready to move our team there yet, but even at 93, that’s still a massive amount of demand.”

And for certain nutrients, farmers simply don’t have a choice.

“If you’re going to plant corn, if you’re going to plant wheat, you have to have nitrogen,” Linville points out. “There’s no getting around that.”

“Waning Optimism” on Price Relief

From Rabobank’s perspective, the outlook is growing more discouraging. Samuel Taylor, farm inputs analyst for Rabobank, says hopes for relief on fertilizer affordability are fading.

“To be honest, I think we’re going to be talking about high input prices and poor affordability through most of this year, and even into the third and fourth quarters,” he says. “Some nutrients might see short-term improvement, but phosphate remains the biggest concern.

“There is some optimism around ammonia,” he adds. “We do have new North American capacity coming online, and over a longer time period that should help. But when it comes to phosphate affordability, we actually run the risk that average phosphate prices this year could be higher than last year.”

A Hard Message for 2026

Neither analyst downplays how difficult the current environment is for farmers.

“Farmers should be frustrated. They should be angry, upset, every negative emotion under the sun. When you look at urea relative to corn prices for this time of year, we’ve never seen that ratio this high going back to at least 2018,” Linville says. “Phosphate ratios are as high as ever starting a year.”

And prices are moving the wrong direction.

“Since the first half of December, urea is up about $100 a ton,” Linville says. “UAN looks like it’s about ready to jump. Anhydrous looks like it’s about ready to go. Phosphate is likely to rally as soon as spring demand shows up.”

Taylor is blunt in his assessment, as he thinks it’s unlikely we’ll see fertilizer prices come down.

“I’m fairly bearish on the outlook for input prices coming down,” he says. “In many ways, we’re just kicking the can down the road.”

Phosphate Prices Are Being Set Globally

Both analysts point to phosphate as the clearest example of why fertilizer prices might stay elevated and why the problem is structural.

“When we talk about phosphate, we’re not talking about a lack of competition,” Linville says. “We’re talking about a lack of global supply.”

Production and exports are concentrated in just five countries: China, Russia, Morocco, Saudi Arabia and the United States. China alone dominates global trade.

“Normally, China exports 8 to 10 million tons of phosphate,” Linville says. “In 2025, they exported just over 5 million tons. As we sit here right now, with the information we have, China is not exporting phosphate until August.”

The impact of that absence ripples through the entire market.

“If the world’s biggest exporter is not participating for several months of the year, global prices are going to be higher,” Linville says. “There’s nothing the U.S. can do about that. We move up with the global market.”

Taylor sees the same dynamic playing out, and he doesn’t believe it will resolve quickly.

“China is looking like an unreliable supplier to the global market again,” Taylor says. “When you combine that with geopolitical risks in other key producing regions, this is starting to look much more structural than temporary.”

High Costs Are Forcing Production Offline

Even if demand softens, analysts say prices have a built-in floor because production costs have surged.

“One of the biggest things people miss is intermediate pricing,” Taylor says. “Sulfur prices ran up in the third and fourth quarters, and that’s pulling marginal phosphate production off the market.”

That squeeze is already visible, according to both Taylor and Linville.

“The stripping margins for phosphate producers have collapsed through the floor,” Taylor says. “In certain geographies, the stripping margin, which is essentially your gross margin, is actually negative.”

“We’ve already seen an [Single Superphosphate] facility in Brazil shut down because the cost of production was higher than the value of the finished product,” he says. “If we try to push prices lower from here, you’re not going to get cheaper fertilizer. You’re just going to get less of it.”

In the U.S., phosphate rock availability adds another constraint.

“We only have so much phosphate rock left. Producers aren’t going to mine it at a loss. As soon as you get back to breakeven or worse, production shuts off, and that lost supply fixes the price again,” Linville adds.

Consolidation Isn’t the Whole Story

With fertilizer prices high, consolidation in the industry has drawn increasing scrutiny from policymakers . Taylor acknowledges the frustration but cautions against simplistic conclusions.

“I’m not sure I’m the right person to say whether there are anti-competitive practices,” Taylor says. “But what I do think gets missed in this conversation is the sheer cost of bringing new production online.”

He points to multibillion-dollar investments, long permitting timelines and environmental obligations.

“Look at the Canadian potash expansion projects. We’re talking about $8 billion in capital. Look at retirement obligations at phosphate facilities. Look at the cost of building a nitrogen or ammonia plant today. You need a very strong balance sheet just to survive that process,” Taylor says.

That reality creates economies of scale that are difficult to avoid.

“We do need some semblance of consolidation,” he adds. “That’s not necessarily the answer farmers want to hear, but if you aim for total self-reliance, particularly in potash, you might actually end up paying more, not less.”

Nitrogen Shutdowns Aren’t Manipulation

Accusations of intentional supply restriction are especially common in nitrogen markets. Linville, who previously worked for a nitrogen manufacturer, pushes back on that idea.

Plant outages, he says, are often misunderstood and planned shutdowns are often a safer option.

“You either shut it down with the people, the parts and the plan in place, or you wait for something to break, and then it’s down even longer,” Linville exp From the outside, it can look like manipulation. From the inside, it’s just reality.”

Policy Is Blurring Market Signals

Taylor says domestic policy is also preventing markets from correcting.

“Government support is blurring the demand falloff we might otherwise see, and that demand destruction is often what helps correct prices,” Taylor says.

But then when you throw in trade policies, Taylor says that adds another layer of cost.

“We’ve seen reciprocal tariffs, countervailing duties and those costs are passed straight through to farmers,” Taylor says. “There are mechanisms within our control that could help, but there’s very little we can do about Chinese domestic policy or geopolitical conflicts in the Middle East, which sit right at the heart of global fertilizer production.”

What Farmers Need to Know for 2026

Despite the frustration, both analysts stress discipline.

“My advice is always the same: Farm to return on investment, not to yield,” Taylor says.

“Be emotional right now, that’s human,” Linville adds. “But when it comes time to make decisions for your fields or your marketing, leave that emotion at the door. That’s where people get hurt.”

For now, fertilizer remains one of the biggest threats to farm profitability in 2026 and one that might not offer easy relief.

Economists Forecast Farm Economy to Stabilize, But High Costs and Policy Uncertainty Block a 2026 Rebound

Wed, 07 Jan 2026 18:26:39 GMT

As 2026 ushers in a fresh start, agricultural economists say the U.S. farm economy has stopped sliding, but it’s far from fully healed.

The December Ag Economists’ Monthly Monitor shows month-to-month sentiment is improving, but deep structural strain remains — especially in row crops. Meanwhile, livestock markets continue to provide strength. Crop producers face another year of tight margins driven by high input costs, weak prices and unresolved trade and policy uncertainty.

“There’s cautious optimism,” the economists say, “but very little belief that 2026 will bring a meaningful rebound without cost relief or stronger demand.”

Those themes mirror the perspective of Seth Meyer, former USDA chief economist and now director of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. In a recent interview, Meyer connected the dots between narrow margins, policy responses and what might actually move the dial for U.S. agriculture heading into 2026.

Stabilizing, Not Recovering

December Ag Economists’ Monthly Monitor

(Lori Hayes )

Economists see the ag economy holding its ground — but not gaining strength.

54% say the ag economy is somewhat better than one month ago.
Compared with a year ago:
- 42% say conditions are worse
- 33% say they are better
Looking ahead 12 months:
- 46% expect conditions unchanged
- 38% expect improvement
- 15% expect conditions to worsen

“Momentum has improved since mid-2025,” Meyer notes, “but tight margins have been with us for a long time. Turning that around requires demand growth, not just price stabilization.

Farm Journal’s December Ag Economists’ Monthly Monitor

(Lori Hayes )

Grant Gardner, assistant Extension professor at the University of Kentucky, tells AgriTalk’s Chip Flory: “I think as we move into kind of this next marketing year, you’re looking at what looks like a breakeven and not a loss, but breakeven still doesn’t look great after three years of breakeven or losses.”

He says even with the $11 billion in Farmer Bridge Program payments , it won’t drastically change the outlook for the farm economy.

“Purdue had a good survey about a month ago, where they looked at what were these payments going to go to, and research would show that a lot of these payments go into long-term assets, and so land tractors, but I think over 60% of producers right now are in such a tight cash crunch that you’re going to see a lot of these payments go into that short-term debt,” Gardner says.

Consolidation a Growing Threat

Economists are nearly unanimous that the crop sector remains under extreme financial stress. 83 percent say row crops are currently in a recession. That isn’t about production declines — acres and yields haven’t collapsed — but about persistently weak profitability.

“Negative returns for at least the third consecutive year across nearly all row crops,” one economist wrote in the survey.

Another said: “Margins remain below full costs of production for many producers.”

Farm Journal’s December Ag Economists’ Monthly Monitor

(Lori Hayes)

Meyer traces that back to how abruptly agriculture moved from the high prices of 2021 and 2022 into today’s tighter margins.

“We moved very quickly from a very high price environment and good profitability in 2022 to very tight margins,” he says. “That usually happens coming off price peaks, but this time it happened really rapidly.”

A minority of survey respondents argued farms are “treading water,” supported by strong land values and government aid rather than eroding further, which Meyer acknowledged aligns with how risk and safety nets have interacted this year.

But when you look at how the current stress in the farm economy could impact consolidation, the ag economists say it’s the economic pressure combined with demographic trends causing the acceleration. In fact, 92% of them say consolidation is underway and unavoidable.

“Markets go to the lowest-cost producers,” one economist wrote. “That sorting is consolidation on the production side.”

Aging producers exiting and rent-heavy operations under pressure only add fuel to that trend, with one economist saying: “Consolidation happens because producers have to exit, not because they want to.

What’s Driving the Farm Economy Right Now

When economists were asked to identify the two most important factors shaping agriculture’s economic health today, their responses clustered around a familiar, but increasingly sharp, divide: strong demand in livestock and the protein sector versus persistent oversupply and cost pressure in crops, all layered with trade and policy uncertainty.

Several economists pointed to continued strength in beef demand, both domestically and through export channels, as a key stabilizing force. While the dairy sector is an area that shows signs of weakness for 2026.

“Livestock revenues are a bright spot,” one respondent noted, underscoring why the livestock sector continues to outperform crops financially.

Looking to 2026, economists overwhelmingly point to input costs, not interest rates, as the biggest barrier to profitability. Nearly 70% cited input prices as the largest challenge as well, far ahead of trade concerns or capital availability.

Farm Journal’s December Ag Economists’ Monthly Monitor

(Lori Hayes )

“We have too much supply and not enough demand for row crops,” one economist wrote.

Another said: “Input costs are still too high.”

Trade remains a central wild card, especially relationships with China and uncertainty around global supply. Several respondents cited trade disputes and agreements as critical factors, along with questions about the size of South American crops and how that could shape global competition in the months ahead.

Policy uncertainty was also featured prominently, with economists pointing to domestic biofuels policy, government payments and broader market signals as factors influencing both short-term cash flow and longer-term demand growth.

Overall, economists say the ag economy is being pulled in opposite directions: strong livestock demand providing support, while crops struggle under high costs, oversupply and unresolved trade and policy questions — a dynamic that helps explain why the broader farm economy feels stable, but far from healthy, as 2026 approaches.

Livestock: A Continued Bright Spot

Livestock continues to stand out as the most financially healthy segment of the ag economy. Every economist surveyed rated beef as above average or excellent, supported by strong domestic demand and tight supplies. Dairy and pork were viewed as stable to moderately strong.

That success creates a stark contrast with row crops, where corn and cotton were cited by 38% each as the commodities most at risk financially in 2026.

What Could Move Crop Prices in the Next Six Months

Looking ahead to the first half of 2026, economists say crop prices will hinge less on domestic fundamentals and more on global supply, trade flows and policy clarity.

Across responses, South America emerged as the dominant influence, with economists repeatedly citing Brazilian weather, the size of the South American harvest and how those supplies compete with U.S. exports. Several noted that clarity around South American production will be critical in setting price direction for corn, soybeans and wheat.

Trade, particularly with China, remains another key swing factor. Economists emphasized not just the announcement of trade agreements, but whether purchases translate into actual shipments.

“China purchases of U.S. crops, but also if and when actual shipments occur,” one respondent noted, adding that details within any trade deal, including purchase commitments, will matter just as much as headlines.

Domestic factors still play a role, but economists see them as secondary in the near term. Input prices, early U.S. planting conditions and assumptions about 2026 acreage were all cited as important — especially as markets begin to trade expectations for next year’s crop mix.

Policy uncertainty also hangs over the outlook. Economists pointed to ongoing questions around trade policy, biofuels policy and broader economic conditions as variables that could amplify or mute price moves.

Economists say crop prices over the next six months are likely to be driven by how global supply unfolds, whether export demand materializes and how quickly policy uncertainty is resolved, rather than by any single domestic production shock.

Biofuels Policy: A Potential Turning Point?

One of the clearest themes Meyer highlights as a possible game changer for demand, and ultimately prices, is biofuels policy.

For economists, policy levers like year-round E15, Renewable Fuel Standard (RFS) volumes, 45Z investment tax credits and how small refinery exemptions are handled could meaningfully influence demand for corn and soybeans in 2026 and beyond.

“It’s one of the places where policymakers actually have levers to help with tight margins in the row crop sector,” Meyer says.

He emphasizes that final rules on RFS volumes and how biobased credits are implemented could impact feedstock demand.

“For the next couple of crop seasons, RVO (Renewable Volume Obligations) and how EPA reallocates small refinery exemptions are big factors,” Meyer says. “Should we raise the RVO to soak up that pool like a sponge? Should imported feedstocks get full 45Z credit? Those decisions could move demand.”

On year-round E15, a long-sought policy priority for corn growers, Meyer is cautiously optimistic.

“I do think it matters,” he says. “Maybe it’s not a huge swing this year, but offering certainty and building demand over multiple seasons is supportive. Other countries like Brazil are ramping up their biofuels production too, so this isn’t happening in a vacuum.”

Policy Uncertainty Still Looms

Economists also flagged top priorities for 2026 policy action:

Year-round E15 (row crops)
Trade policy clarity (row crops & livestock)
Labor reform and regulatory issues (livestock)

They also highlighted under-covered risks, which include pressure on land rents and values, labor shortages, biofuels policy details (such as 45Z credits) and slower population growth affecting long-term demand.

What Could Move Livestock and Dairy Prices in the Next Six Months

When economists look ahead to livestock and dairy markets in early 2026, they see a mix of strong demand signals, supply-side risks and policy uncertainty shaping price direction.

Consumer demand remains the cornerstone of the outlook, particularly for beef. Several economists pointed to continued buying interest from U.S. consumers as the primary support for cattle prices, even as affordability pressures rise. At the same time, some warned that a more “K-shaped” economy could begin to shift demand, pulling some consumers away from beef and toward pork.

Supply dynamics and herd trends are another major focus. Economists cited herd size, potential herd expansion and the availability of feeder cattle as critical variables. The expected resumption of feeder cattle imports from Mexico was highlighted as a key factor that could influence cattle supplies and pricing, depending on timing and volume.

Animal health risks also remain on the radar. Issues such as avian influenza, screwworm and other disease threats were mentioned as potential disruptors that could quickly alter supply conditions in both livestock and dairy markets.

Policy and trade uncertainty continues to hover over the sector. Economists pointed to ongoing questions around tariffs, restrictions on live animal trade with Mexico and the next steps under the USMCA as factors that could impact both imports and exports. Political uncertainty more broadly was also cited as a potential source of market volatility.

For dairy, economists noted that beef-on-dairy dynamics are likely to continue weighing on milk prices by increasing beef supplies while complicating dairy herd decisions.

Taken together, economists say livestock and dairy prices over the next six months will be driven by a delicate balance between strong consumer demand, evolving supply conditions and unresolved trade and policy questions, with any shift in one of those areas capable of moving markets quickly.

Acreage Expectations: Stress, Not Shock

Despite margin pressure, economists do not expect dramatic acreage pullbacks in 2026. Most expect:

Corn: 93 to 95 million acres
Soybeans: 84 to 86 million acres
Wheat: 44 to 45 million acres
Cotton: 9 to 10 million acres

Corn acreage expectations have edged lower since November, as economists backed away from another year above 95 million acres. At the same time, soybean acreage expectations have firmed, with 75% now targeting 84 to 86 million acres, suggesting stronger relative economics for beans.

“Export demand has helped keep corn acres supported,” Meyer says. “The question is whether that demand holds and whether policy supports it.”

As for acreage, the major impact on prices would be a large acreage reduction, which is unlikely.

“That’s what it comes down to, too. What I’ve been thinking about is what else can you use land for? And you’ve got the pushback on urban sprawl, you’ve got pushback on other uses for ag land. But right now, the simple fact is we’ve got way too much production. Without that slowing, or a drastic increase in demand, I don’t see prices improving to very lucrative levels,” Gardner says.

Overall, The Ag Economy Is a Grind, Not a Rebound

When you look at all the results from the December Ag Economists’ Monthly Monitor, economists paint a picture of an industry that has stopped getting worse, but has not yet found a path to durable profitability.

Crops remain mired in margin compression; livestock continues to outperform but remains sensitive to policy decisions. Government aid is buying time but not addressing structural challenges, but it’s policy outcomes, especially around biofuels, trade and E15, that could be decisive in shaping 2026 outcomes.

For now, the farm economy has found a floor. The tougher question, economists say, is whether policy can help lift it, or if it will continue to grind forward without a genuine rebound.

Related News: As Screwworm Inches Closer, When Could the U.S. Reopen the Southern Border to Cattle Imports?

Where Could Farmers Spend Bridge Assistance Payment Dollars?

Tue, 06 Jan 2026 20:18:57 GMT

With USDA’s and Agriculture Secretary Brooke Rollins’ Dec. 31 announcement detailing rates for Farmer Bridge Assistance Program payments , set to be distributed by Feb. 28, there’s the matter of how farmers will spend the funds.

“If we look at it as a share of revenue, it looks around 5% to 20% for different farms. So, it’s meaningful, it’s something, but it might not necessarily change the picture for all of the farmers,” says Wes Davis, chief ag economist at Meridian Agribusiness Advisors.

Davis estimates the payment rate per acre for corn is about $0.25 per bushel and $0.62 per bushel for soybeans.

Per the Purdue/CME Group Ag Economy Barometer earlier this fall, when asked how they’d spend potential government payments, 53% of farmers said they would use the money to pay down debt.

(Purdue Center for Commercial Agriculture)

“Farmers are getting that debt off their books and concentrating on reducing their payment rates,” Davis says.

This, he adds, is supported by data from the Kansas City Federal Reserve indicating a growing segment of farmers selling mid-to-long-term assets to improve working capital or pay down debt.

(KC Federal Reserve Bank)

One-quarter said the money would go toward improving working capital.

“So, farmers may have more funding available to spend on inputs as the spring buying season starts,” Davis says.

From Farm Journal research, 75% to 80% of farmers have input decisions made by the end of February, when farmers expect to receive bridge program payments. Davis says this means the program won’t have substantial changes in seed or fertilizer purchases but will most likely have an effect on crop protection purchases.

From the Purdue research 12% and 11% of farmers, respectively, said it could be used to invest in machinery and cover family expenses.

Respondents in the latest Farm Journal Ag Economist Monthly Monitor warn the payments may help with short-term cash flow, but could delay market adjustments.

“Payments will prolong high input costs and land values,” one respondent said.

When economists in the Farm Journal Monitor were asked if they expect the Farmer Bridge Payments to sufficiently cover financial losses experienced by farmers in 2025:

54% said the payments are “partially suﬃcient , the aid will cover some but not all losses.”
38% said, “The aid will be insuﬃcient to cover losses.”

When followed-up with, “What impact, if any, do you expect the bridge payments to have,” economists said:

May help pay down current operating loans for some and for others, help get a start on 2026 inputs
All players in the farm supply chain know about the payments and will know the exact payment rates. The payments will prolong high input costs and land values/rental rates. Any adjustments that should occur from an economic perspective are delayed because of the cash influx.
Support cash rent and land values
The payments will help producers with short-run cash flow issues. They will not help encourage needed adjustments in rental rates and other production expenses.
They will help pay down debt for most producers, providing a much needed boost the the agricultural lending sector.
It will help the younger producers that don’t have the capacity to roll operating loans, but many of the dollars will flow-through to input suppliers. That delays what should be a downside correction in input prices.

“A lot of this money — half of it — is just going to be a simple pass-through,” Davis says. “So, farmers have already spent it on that debt; they’re going to use it to pay down those balances. It might actually reduce the amount of interest payments that farmers have over the next season, but for it to pass through and increase the spending on some of their inputs or equipment or potentially land, that’s not really showing up in the data that we’re seeing, and farmers are not telling us that’s what they’re going to go and use the funding for.”

The bridge program is an economic assistance program, not a tariff relief program.

Seth Meyer, the former USDA chief economist and now director of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. explains the intent behind the $11 billion in farmer bridge payments that were announced late in 2025: they weren’t designed to offset trade losses, but to bridge producers to the point where long-standing safety nets take effect.

“These were calculated based on shortfalls in cost of production, not trade impacts,” he tells Farm Journal. “If this is going to be a bridge payment, it needs to be quick. That’s why an ECAP-style approach made sense, it could be administered fast.”

Davis says is an important distinction.

“If you look at the last trade war that we had, there were payments, and they were directly tied to the price impact and the actual damage that was done to farm prices,” he says. “Potentially, it leaves some options open for the administration to add funding that does supplement those prices. We’ve heard chatter over time that there may be another round of payments or funding available over the next year. I think that leaves the window open for trade relief if this is positioned as economic relief, with inputs staying well above the level that they were even five years ago.”

One big question remains.

It’s how the program will support specialty growers. USDA announced an additional $1 billion for specialty crop growers, but further details on timing and eligibility have not been released.

“Analysis from the American Farm Bureau showed almost every single major specialty crop is in the red by 1x to 2x what they have been historically,” Davis says. “Figuring out how that payment will be distributed to those growers will be really important.”

AFBF notes specialty crops account for more than one-third of U.S. crop sales: $75 billion.

Meyer also acknowledges a smaller $1 billion pool for specialty crops and sugar poses challenges: “With the diversity in specialty crop areas, it’s much more complicated to implement, how do you cover all of that efficiently?”

Can China Live Up to Its 12 MMT Soybean Promise?

Mon, 01 Dec 2025 21:14:40 GMT

As year-end approaches, soybean markets are entering what is normally a quiet stretch, but this year, the calm might be deceptive. Arlan Suderman, chief commodities economist at StoneX, says two uncertainties could spark volatility: the EPA’s final biofuel regulations and China’s ability to follow through on its promise to purchase 12 million metric tons (MMT) of new U.S. soybean sales.

And as USDA weighs market loss payments due to tariffs and trade disruptions, which are reportedly coming this week , ag economists cast doubt on if China will buy 12 MMT yet this year, Suderman says the market might have have already priced in a lower amount.

Markets in a Holding Pattern But Not for Long

Suderman describes the current market tone as typical for late November and December, saying: “We’re in a holding pattern right now, and typically between Thanksgiving and Christmas, you get kind of sluggish markets as we’re waiting for new direction after the first of the year.”

But he immediately adds that this year could carve its own path.

“I think this year we have more potential for volatility, perhaps in both directions, because over the next few weeks, we anticipate getting direction from the EPA on the final regulations for the biofuel program,” he adds. “That could be very bullish, it could be bearish. Our bias is to the positive side, but until we know, that’s an unknown that the market’s really not pricing in yet at this point.”

The Million-Dollar Question: Can China Really Buy 12 MMT?

A major focus remains China’s pledge to buy 12 MMT of soybeans in 2025, but even the timing of those purchases is unclear.

“The White House says it’s new purchases for the calendar ’25. China hasn’t given their side of it. That’s why we need to see the agreement, and we hope to get that this week. That should detail it out in addition to details on the other commodities,” Suderman explains.

Beyond the calendar debate, he says there are real logistical limitations.

“What we hear from our cash sources on the ground in China is they don’t have enough storage space if their state grain buyers are going to buy all these because it’s not economical for the private crushers,” he says. “So the only way they could do it would be to wash out some purchases from Brazil. Now that would be bearish for Brazil, cause their basis to collapse, and then some customers who normally buy from us might go to Brazil instead, kind of rearranging the deck chairs, so to speak.”

Suderman says the core issue is straightforward and there are two looming questions that only China can answer.

“How it all plays out is a big question mark. But I think the big key is: Does China make the full 12 million metric tons of new purchases by the end of the year? And when do they take shipment? They can make the purchases and not take shipment till the next marketing year, or they could take shipment in the next few months. That’ll have a big impact on the dynamics of this market,” says Suderman.

Economists Cast Doubt

U.S. Secretary of Agriculture Brooke Rollins and the White House have said China will live up to its promise to buy 12 MMT of soybeans this year, but ag economists aren’t so sure.

Farm Journal’s November Ag Economists’ Monthly Monitor , an anonymous survey, found more than three-quarters (76%) of economists surveyed say China won’t purchase that amount of soybeans this year; 24% of economists think China will.

(Farm Journal)

Those same economists are also divided on whether additional trade aid is needed. Exactly half of economists say yes, trade aid is still necessary, while the other half say no.

But economists overwhelmingly agree on two key risks:

U.S. agriculture has become too reliant on ad hoc payments. A striking 94% say the industry has become “too addicted” to emergency programs. And it’s not just farmers, but also industry and input suppliers who have become reliant upon these payments. Many economists say repeated aid packages distort land values, cash rents, equipment purchases and overall decision-making.
One hundred percent of economists argue tariff-aid payments will keep fertilizer prices high. Every economist surveyed says tariff aid would keep input prices elevated, particularly fertilizer.

November Ag Economists’ Monthly Monitor

(Lori Hayes )

But this also leads to a bigger issue: Is there enough competition in the fertilizer market? Two-thirds (67%) of economists surveyed say there is not enough competition in fertilizer markets.

Fertilizer prices track crop prices, not energy costs — a sign of market power.
The market is concentrated and driven by a handful of global producers.

“The fertilizer market appears to be very concentrated, limiting competition,” said one economist in the anonymous survey. “In a competitive fertilizer market, fertilizer prices should track more closely with energy costs as the primary input cost in fertilizer production (supply) instead of tracking more closely with crop prices as the primary demand for fertilizer. Prices correlating more closely to production costs suggest a competitive supply-driven market. Prices correlating more closely with crop prices suggest a demand-driven market with some market power.”

“More competition is always better, but closing out competition with trade barriers right now is a bad idea,” one economist said.

“While we only have a few suppliers, there is not competition to offer lower prices. Fixing this is a whole other issue,” said another economist in the monthly survey.

“Economies of scale are so large that firms will be few in number. Breaking them up may lead to more competition but also higher prices as economies of scale are lost,” was another comment in the November survey.

What Traders Are Actually Pricing in

Right now, Suderman says the market is assuming something less than the full 12 MMT pledge.

“I think the market has priced in expectations that maybe they’ll take 8 to 10 million metric tons, and they’ll take it during the marketing year between now and the end of August,” he says.

He adds that traders expect the 25 MMT earmarked for 2026 could be purchased sooner but shipped later.

U.S. Soybeans Still Too Expensive for Private Buyers

Even if China lifts its 10% retaliatory tariff, as many expect, it still won’t make U.S. soybeans the cheaper option for commercial crushers.

“For the private crushers, what they would have to pay if there were no additional tariff—and there still is a 10% retaliatory tariff—we expect that to come off soon. But even if it comes off, our U.S. soybeans are priced 70 to 80 cents above Brazilian soybeans landed at the port in China,” he says. “And so we’re still not competitive from that standpoint. And with new crop harvest just weeks away in Brazil now, we’re probably not going to get competitive. So it’s going to have to be state purchases.”

Livestock Margins, Not Disease, Are the Real Drag on Feed Demand

While there are recurring late-year rumors of disease in China’s hog herd, Suderman doesn’t see unusual issues at the moment.

“Every year we hear this time of year about disease in China,” he says. “We don’t see anything at this point that’s out of the ordinary.”

Instead, he points to weak margins across all major protein sectors.

Instead, he says the real challenge is weak livestock economics.

“The bigger problem is the poor returns, the poor margins for livestock feeding—be it pork, be it poultry, be it all forms of protein right now. Demand for protein is simply not there,” Suderman explains. “So they’re shrinking the size of their herds, their flocks, etc. And that’s reducing demand for corn consumption. They actually expect to see corn consumption go down next year versus prior year. That’s a reversal of the normal trend for soymeal demand as well.”

He adds that China is still buying soybeans for a strategic reason and one that agriculture needs to prepare for now.

“Soybean demand is only being held up right now by China building its reserves so that when President Trump’s no longer in office, they can never buy another soybean from us again.”

If the U.S. Must Rely Less on China, What’s the Quickest Way to Do So?

Rollins recently warned that reducing reliance on China will be difficult. Suderman agrees but insists it’s necessary and will take not only striking new trade deals and finding new markets, but building domestic demand.
That includes:

A strong biofuel program
New trade agreements
Expanded global access
Domestic demand growth

“I’ve been saying that for four or five years, that we were going to lose China. Let’s go to all of the above,” he says.

He believes some recent trade pacts signed by Trump are “very good for demand,” though he cautions nothing can fully replace China’s market size.

Still, Suderman says there is reason for optimism as biofuel infrastructure.

“With the all-of-the-above approach, we do have a bright picture down the road,” he says.

What to Watch Through the End of the Year

China’s ability to follow through on its 12 MMT soybean promise remains highly uncertain. Storage constraints, price disadvantages, and weak domestic protein margins are all complicating factors.

Suderman says the market is prepared for 8 MMT to 10 MMT but not the full pledge.

What China does, or doesn’t do, over the next few weeks could shape the soybean market well into 2026.

“Some of these trade packs that President Trump has signed are very good for demand. It’s not going to replace China by any means. You can’t do that, it’s not the same size market. But I think with the all-of-the-above approach, we do have a bright picture down the road as we get the biofuel infrastructure built up,” says Suderman.

2026 Acreage Expectations: Economists See Fall in Corn Acres, Rebound for Soybeans

Wed, 26 Nov 2025 17:43:39 GMT

U.S. farmers are expected to trim corn acres next year after plantings in 2025 hit a nearly 90-year high, while soybean acres are seen posting a rise, according to Farm Journal’s latest Ag Economists Monthly Monitor .

Views vary, however, on the size of those expected shifts.

The November survey found 40% of economists expect corn acres to top 95 million in 2026, while another 40% see plantings coming in between 93 million and 95 million acres. Twenty percent look for acres to fall to between 91 million and 93 million, a sharp drop from the 98.7 million planted in 2025.

Last year’s figure was the highest since 1936, with plantings driven by a more profitable outlook for corn, signs of robust demand and crop rotations. Corn acres jumped 8.1 million acres in 2025, taking area away from other crops. Soybean acres fell around 6 million acres, with farmers in part spooked by rising trade tensions with China early last year. Those concerns proved well-founded.

Crop rotation and input costs are likely to be a major driver in a pullback in corn acres relative to soybeans in 2026. Soybeans typically require less expense toward certain inputs like fertilizer, making them a more economically viable option as chemical prices remain well above a year ago.

The survey found 53% of economists expect farmers to plant 82 million to 84 million acres of soybeans in 2026, up from 81.1 million acres in 2025. A significant minority expects a bigger increase, with 40% pegging plantings at 84 million to 86 million acres and 7% looking for a figure above 86 million.

Most economists expect total wheat acres to decline amid a weak profitability outlook. The survey found 43% see wheat acres between 44 million and 45 million versus 45.3 million in 2025, while 36% see total acres at less than 44 million. The remaining 21% look for wheat plantings to total between 45 million and 46 million acres.

Earlier this month, advisory firm S&P Global Energy estimated 2026 corn acres at 95 million and soybean acres at 84.5 million. Wheat acres were projected at 44 million. The estimates were based on a survey of farmers and agribusinesses.

Cotton acres fell 1.9 million in 2025, with a chunk of that ceded to corn. Economists largely see little change in cotton acres next year, with 60% looking for plantings between 9 million to 10 million acres versus 9.3 million last year. Around 13% expect cotton acres to total between 10 million and 11 million acres, while 27% see a fall to below 9 million acres.

Lackluster demand and the absence of firm commitments to purchase U.S. cotton has weighed heavily on prices this year, reducing the incentive for growers in the south who have alternative crops to choose from.

The last time cotton acres dipped below the 9 million mark was 2015, a year where the average farm price per pound was down to 61.3 cents for the year. Currently USDA estimates the average farm-price for this season at 64 cents per pound.

USDA Signals Possible Trade Aid Soon, Economists Warn It Could Keep Input Prices High

Tue, 25 Nov 2025 21:20:47 GMT

As financial pressure continues to grip agriculture, Secretary of Agriculture Brooke Rollins says trade aid could come as soon as next week. But with ongoing discussions about potential tariff-related assistance, the November Ag Economists’ Monthly Monitor found economists are mixed about the possible impact on the farm economy and whether the payments will keep input prices high.

Before the government shutdown, the situation looked bleak. Hope of a trade deal with China seemed slim. But in October, China committed to buying 12 million metric tons of U.S. soybeans by the end of 2025, followed by at least 25 million tons annually for the next three years. That news buoyed soybean prices, and while sales were slow, a string of purchases the past two weeks further fueled prices, with soybean prices up more than $1 since the beginning of October.

Rollins was on CNBC this week talking about those recent sales, as well as possible tariff aid.

“Just a couple of weeks ago, the announcement was that China is back on to buy soybeans, 12 million metric tons this year, 25 million metric tons over the next few years. They’ve already put in a purchase order. We’ve already started shipping soybeans their way, almost a million and a half metric tons. We have every indication they will continue to buy soybeans, sorghum, etc.,” Rollins said during the interview. “But it goes to the larger effort of President [Donald] Trump. We can’t be so reliant as Americans producing American products on one country, our foreign adversary.”

Is Tariff Aid Still Needed?

At the center of the most recent debate is whether USDA should issue new tariff-related aid payments to offset market disruptions that began years ago and continue to depress cash prices, even though China and the U.S. seem to have a deal. Rollins gave a more specific timeline about when producers impacted by lower crop prices, along with trade disputes, can expect some financial help.

“We are looking at the aid right now. We have always said it is to solve for, to mitigate, anything under these new trade negotiations. Every day that changes, and that’s what we’re working on. So we’ll have an announcement probably in the next week or two on what that’s going to look like,” Rollins said on CNBC.

Reuters reports that aid package could total more than $15 billion, which is higher than the $12 billion Politico reported.

November Ag Economists’ Monthly Monitor

Rollins and the White House have said China will live up to its promise to buy 12 million metric tons of soybeans this year. But ag economists aren’t so sure. Farm Journal’s November Ag Economists’ Monthly Monitor, an anonymous survey, found more than three-quarters (76%) of economists surveyed say China won’t purchase that amount of soybeans this year, while 24% of economists think China will.

But there’s also some confusion. While some reports say China made this purchase commitment for the calendar year, there’s talk it’s for the marketing year, which would give China until Aug. 31, 2026, to make good on its promise.

Under Secretary Richard Fordyce Says USDA is Still Working on Possible Tariff Aid

Under Secretary for Farm Production and Conservation Richard Fordyce sat down with “U.S. Farm Report” for a one-on-one interview last week. During that interview he said USDA is working daily to understand the severity of the situation across multiple commodities and regions — pressure that economists and farm groups say is reaching crisis levels for some commodities, including cotton and rice.

“We’re having conversations almost on a daily basis with the secretary’s office, the chief economist’s office, the White House,” Fordyce says. “When and if we do something, we want it to be well-informed through the data we have available. We want it to be representative of where we are today but also representative of where we were.”

He also says they are taking into consideration many farmers were forced to sell at harvest for much lower prices than they’re seeing today.

New Monthly Monitor data shows the Mid-South, Midwest and parts of the Southwest are experiencing the most severe financial stress.

Cotton growers might be among those facing the most immediate hardship, and Fordyce says their situation is not lost on the department.

“There are multiple commodities that are part of the conversation,” he says. “Cotton is absolutely one of them. When we make a decision, it’s going to be informed, it’s going to be representative of where we are, and it’s going to use the data we have access to.”

Economists Say Aid Alone Won’t Fix Structural Problems and Could Keep Input Prices High

Farm Journal’s November Ag Economists’ Monthly Monitor reflects a divided view on whether additional trade aid is needed. Exactly half of economists say yes, trade aid is still necessary, while the other half say no.

November Ag Economists’ Monthly Monitor

But economists overwhelmingly agree on two key risks:

U.S. agriculture has become too reliant on ad hoc payments. A striking 94% say the industry has become “too addicted” to emergency programs. And it’s not just farmers, but also industry and input suppliers who have become reliant upon these payments. Many economists say repeated aid packages distort land values, cash rents, equipment purchases and overall decision-making.
One hundred percent of economists argue tariff-aid payments will keep fertilizer prices high. Every economist surveyed says tariff aid would keep input prices elevated, particularly fertilizer.

November Ag Economists’ Monthly Monitor

But this also leads to a bigger issue: Is there enough competition in the fertilizer market? Two-thirds (67%) of economists surveyed say there is not enough competition in fertilizer markets.

Fertilizer prices track crop prices, not energy costs — a sign of market power.
The market is concentrated and driven by a handful of global producers.

“The fertilizer market appears to be very concentrated, limiting competition,” said one economist in the anonymous survey. “In a competitive fertilizer market, fertilizer prices should track more closely with energy costs as the primary input cost in fertilizer production (supply) instead of tracking more closely with crop prices as the primary demand for fertilizer. Prices correlating more closely to production costs suggest a competitive supply-driven market. Prices correlating more closely with crop prices suggest a demand-driven market with some market power.”

“More competition is always better, but closing out competition with trade barriers right now is a bad idea,” said one economist.

“While we only have a few suppliers, there is not competition to offer lower prices. Fixing this is a whole other issue,” said another economist in the monthly survey.

“Economies of scale are so large that firms will be few in number. Breaking them up may lead to more competition but also higher prices as economies of scale are lost,” was another comment in the November survey.

AFBF: Farmer Assistance Urgently Needed as Trade Deals Came “Too Late”

AFBF says for farmers who had to sell at harvest price lows due to the lack of storage, the benefits of recently announced trade frameworks will come too late.

(American Farm Bureau Federation)

A new analysis from the American Farm Bureau Federation underscores the severity of the financial downturn. The group cites USDA’s most recent Commodity Costs and Returns, WASDE, and Farm Sector Income and Finances reports, saying they “confirm what those in agriculture have known for several years: U.S. farm income is under immense pressure as input costs have increased dramatically while crop prices have fallen sharply.”

AFBF says even with an expected record yield of 186 bushels per acre and a $4 per bushel national average price, the return over total cost is estimated at a loss of over $150 per acre, with total losses nationwide eclipsing $15 billion.

(American Farm Bureau Federation )

The result, according to AFBF, is that margins for row crops and specialty crops have been at or below breakeven for several consecutive years.

AFBF outlines three urgent warnings:

Farm financial stress is severe and persistent.
Margins remain below breakeven, working capital has eroded, and Chapter 12 bankruptcies are rising. Lenders expect profitability to remain elusive heading into 2026.
Trade losses have compounded economic pressures.
Farmers have suffered multibillion-dollar export declines in major markets, including China. While new trade frameworks have been announced, export volumes have not increased and cash prices remain at or below early-2025 levels.
Without action, long-term viability is at risk.

According to AFBF, the math is the same for every major crop — as well as specialty crops — and it’s been that way for several consecutive years, with combined annual returns below total costs (for nine principal crops) from the 2023/24 to 2025/26 crop years at -$20.2 billion, -$34.8 billion and -$34.6 billion, respectively, and before crop insurance indemnities and other support.

(American Farm Bureau Federation )

AFBF says additional financial support is critical to offset trade losses and provide a bridge until new farm bill enhancements take effect. It also notes that while recent trade discussions offer some optimism, many benefits might come too late, especially for farmers who were forced to sell grain at harvest price lows because they lacked storage.

November Ag Economists’ Monthly Monitor Reflects that Strain

Even though economists fear more ad hoc aid will keep input prices inflated for longer, economists still say the ag economy is strained.

70% of economists say the crop sector is currently in a recession.
88% say the current margin squeeze will accelerate consolidation.
Working capital is deteriorating, and many economists believe cash rents are not adjusting to economic reality.

The latest survey also showed modest month-over-month improvement, largely due to improved crop prices, but year-over-year conditions are still weaker.

47% say conditions are somewhat better than a month ago.
21% say things are worse; none say “much worse.”
68% say the ag economy is worse than a year ago; 16% say “much worse.”
Only 5% see year-over-year improvement.

Economists describe the outlook as ongoing strain, not a 1980s-style collapse, but with little relief in sight.

USDA to Farmers: We Understand the Strain

Fordyce says USDA leadership is not detached from the reality on the ground.

“My first operating loan was in 1983. It was 18%, and I still wanted to farm,” he says. “There are people up and down the hallways within USDA leadership who have farmed, who are farming or who have direct ties to a farm. There’s absolutely a 100% understanding of what’s happening — big picture, commodity specific and geography specific.”

While USDA weighs whether tariff-related assistance is appropriate — and whether it would help or worsen long-term challenges — farmers, economists and lenders agree on one point: The financial pressure in agriculture is real, widespread and growing.

AFBF warns that without action, the long-term viability of many farms is at risk. Economists caution that too much ad hoc aid could distort markets even further, and USDA says it wants any decision to be grounded firmly in data.

As Fordyce puts it: “We want it to be informed, we want it to be representative and we want it to use the data we have access to.”

From Harvest to Hardship: Farmers Struggle With Cash-Flow Crunch

Tue, 25 Nov 2025 22:14:34 GMT

Across America’s heartland, most corn and soybean crops are harvested, combines have been put away, and farmers will gather with their families to enjoy the holidays ahead. But as farmers gather around dinner tables and give thanks for what they have, many are concerned about what they don’t have this fall – adequate cash flow.

That lack is the No. 1 issue facing farmers now, according to southeast Illinois farmer Sherman Newlin, who’s based in Crawford County.

“I think these low prices are starting to take a toll on guys trying to meet their cash-flow needs,” he says.

For many farmers, Newlin believes the issue isn’t just about surviving until next spring — it’s about paying land rents, covering input bills coming due, and staying afloat right now.

“Unless you’re in a good area that had really good yields, cash flow is probably going to be tight,” Newlin says.

Northeast Iowa Brent Judisch doesn’t sugarcoat the numbers he penciled out last Wednesday. “Our cash corn today is at $4.10 — that’s not going to cut it with an average yield. Our cash beans today are $10.60. With a good bean crop, that probably cash flows, but it doesn’t make any money,” he says.

Farmers Took Grain To Town At Harvest
Selling grain is about the only option many row-crop growers have had this fall to meet expenses, even if the market timing isn’t ideal, Newlin says.

“Prices for corn and soybeans have come up some. At harvest, things were quite a bit lower than where they are right now,” Newlin says. “But it’s kind of hard to take advantage of a rally if you sold across the scale and didn’t come back in and reown [the crop] on paper.”

Judisch says there are some “better bids out there” for farmers who can wait to market corn in late winter, February and March.

“But for the short term, [buyers] are not having to bid up that much to get it because guys are just having to turn some stuff into cash to pay the December rents,” he says.

(Ag Economists’ Monthly Monitor)

The November Ag Economists’ Monthly Monitor survey reflects farmers’ current cash-flow pressure as well as their mindset in how they are approaching marketing decisions now. The survey, administered by Farm Journal, shows:

53% of ag economists say farmers are marketing defensively, prioritizing liquidity and risk reduction.
41% of ag economists say farmers are reactive, delaying decisions due to uncertainty.

Where Is The Financial Stress Most Severe?
Jackson Takach, chief economist for Farmer Mac, tells Farm Journal his reports indicate farmers’ top concern is liquidity (working capital) and their second-highest concern is farm income.

“We know cash flows are top of mind,” he says. “As prices have come down, people are talking about it more and digging into working capital, and that’s causing a little bit of distress, particularly in the grain side of the ag economy.”

Takach says the economic stress is highest in parts of the country where soybeans are farmers’ No. 1 crop.

“You look at the Delta, that’s where we’re seeing a lot of stress popping up in bankruptcies as well as late payments, because of some of that additional stress coming through with lower commodity prices specific to soybeans.”

That sentiment is similar to what was shared in the November Ag Economists’ Monthly Monitor survey, though the Monitor paints a broader picture. When asked in which region farmers face the most severe financial pressure, economists reported that “cotton and rice country is suffering from especially poor profitability and weak sentiment.”

Without action, long-term farmer viability is at risk, according to John Newton, American Farm Bureau Federation economist. “Additional financial support is critical to offset trade losses and provide a bridge until farm bill enhancements from the One Big Beautiful Bill Act go into effect,” he says in a release. “This will stabilize the farm economy, sustain rural economies and maintain affordable food prices.”

Will China Come Through On Soybean Purchases?
The fate of soybean exports is on nearly everyone’s radar, especially as China’s purchases for 2025 still hang in the balance.

Reuters’ Karl Plume reports that China is starting to make good on its promises, noting that “two cargo vessels were headed for grain port terminals near New Orleans on Monday to load with the first U.S. soybean shipments to China since May, according to a shipping schedule seen by Reuters.”

But Judisch warns the window for 2025 U.S. soybean sales to China is closing fast.

“We’re going to have to see some immediate results from this agreement [with China], because if this drags into January and February and Brazil comes online, I’m not very optimistic that we’re going to make the goals that were set between the U.S. and China.”

Farmers Press On And Start Planning For Next Season
With 2026 around the corner, cautious optimism about the new year mingles with the current hard reality of farmers’ cash-flow drought.

Judisch notes that successful negotiations by the Trump administration to drop tariffs on some items, such as fertilizer, aren’t helping financially strapped farmers. He says that was a scenario of a little help that arrived too late.

“Stopping the tariffs on fertilizer this late in the game does no good for the 2026 crop because you’ve either got it on fields already or your buildings are already full of high-priced fertilizer,” Judisch contends.

“It’s kind of a bugaboo for us,” he adds. “Our costs are staying high even with the tariffs being dropped on fertilizer, but our income is just not going to be there until probably next summer.”

Cash rents for 2026 is one important aspect of the financial equation for the year ahead that 100% of ag economists surveyed this month recommend farmers dig into now. Notes one ag economist: “Cash rent could use more attention as a majority of land is rented… it would be nice if landlords knew that they may need to lower cash rent.”

(Ag Economists’ Monthly Monitor)

Newlin says he and other farmers he knows in his area are sorting through crop rotations for next season – whether to plant more corn and
fewer soybeans or less corn and more soybeans.

“We’ll probably be heavier corn next year just because of our rotation, but a lot of guys are going to be heavier in corn in our area,” Newlin says.

Judisch is sticking with his 60-40 ratio of corn to beans next season. Like Newlin, he believes other farmers could lean toward more corn in the year ahead, given the financial opportunity many believe corn offers.

“We’ve seen some very good export sales on corn, so there are some good things happening,” Judisch says. “We need to keep them going in the future. That’s the biggest thing.”

Your next read: USDA Signals Possible Trade Aid Soon, Economists Warn It Could Keep Input Prices High

Tight Margins, Tough Decisions: Farmers Face 1980s-Like Pressures as Harvest Rolls On

Tue, 28 Oct 2025 15:55:14 GMT

Peanut harvest is in full swing across the southeastern corner of Alabama. But as combines hum and dust fills the air, Jonathan Sanders says the mood in the field is far from upbeat.

“Commodity prices are always a challenge, but weather’s the biggest concern right now,” Sanders says. “We’ve been dry for a month, and it’s making harvest losses go up — it’s harder to get the peanuts out of the ground.”

Sanders has been farming for just over a decade.

“My first crop year was 2014 when I got out of college,” he says.

He’s the sixth or seventh generation on this farm — though he’s lost track of exactly which. With peanuts, cotton, corn, cattle, timber and small grains, diversity remains the operation’s lifeline. But this year, he says, margins are razor thin.

“Cotton seems to be producing negative returns,” Sanders says. “Peanuts are going to be right there at the mark, depending on yields.”

Costs Keep Climbing, Prices Stay Stuck

For Sanders, the biggest challenge this season isn’t just market volatility — it’s the relentless rise in input costs. And this isn’t a phenomenon that started in 2025. While many reports want to turn the situation into a political blame game, thin-to-negative margins have been a reality for southern farmers since 2021.

“Electricity and fuel are always high, but the cost of repairs has gone through the roof,” he says. “Parts that used to be $20 or $30 are now $70 or $80. Everything’s gone up, but crop prices haven’t.”

Government assistance programs may offer short-term relief, but Sanders insists they’re not the goal.

“It always helps, but that’s not the goal of any farmer,” he says. “The goal is to make a profit without government interference, but oftentimes government interference is what causes the commodity prices to be low.”

Despite all the pressures, quitting isn’t an option.

“It comes with a lot of pride, but a lot of determination to not fail also,” Sanders says. “You don’t want to be that generation that loses the farm.”

Economists Warn Cotton Losses Exceed $200 Per Acre

At Auburn University, agricultural economist Mykel Taylor says the numbers confirm what farmers already feel — cotton growers are deep in the red.

“Our Extension economists here at Auburn have put together some estimates of net returns above total costs, excluding land costs, and cotton is negative $236 an acre,” Taylor says. “And that means that if you’re paying rent, that’s even more.”

Taylor says farmers are draining their reserves to survive.

“I think so,” she says when asked whether some will be forced out. “That’s a really difficult conversation that the lenders are gonna have to have with their clients because they don’t wanna lose those clients for next year. But when you have year on year on year negative returns... if they had money in the bank, they’re using it. They are using up those reserves to make it to the next year, and at some point, they’re not going to be able to keep doing it.”

Even giving up rented ground isn’t always an option, as it’s a difficult decision that could change the landscape of an operation.

“It’s not a good situation,” Taylor says. “When you look at the $1 million cotton pickers that they’re buying and you look at the tax implications of selling that farm machinery, they don’t have a lot of options to not just keep farming. They’re kind of digging themselves into a hole, and it’s one that I’m not sure how we’re going to get out of easily or quickly.”

Farm Journal’s Monthly Monitor: ‘History Doesn’t Repeat, But It Rhymes’

According to Farm Journal’s October Ag Economists’ Monthly Monitor , 69% of economists say the financial stress on farmers today is “slightly similar” to the 1980s farm crisis.

Ben Brown, senior ag economist, says the parallels are striking.

“There’s a famous saying that says that history sometimes doesn’t repeat itself, but it often rhymes,” Brown says. “And I think that’s what this signals to me — that we do see some similarities. The biggest similarity here is the low profitability, declining net capital that a lot of farms have. The working capital reserves have been drawn down here multiple years in a row, and that liquidity issue is really starting to impact some of the broader financial indicators.”

He adds that while farm bankruptcies aren’t near 1980s levels yet, they’re trending higher.

The outlook for 2026 is also bleak. Nearly 90% of economists surveyed say the ag economy is worse than a year ago, and 76% expect it could stay the same or even worsen through 2026.

“Just this continued downturn and extended pressure on farm finances absent some type of market rally,” Brown says. “Maybe that’s a yield shortfall due to drought somewhere in the world. But absent that, we’re kind of just in this slow grind lower trying to find an equilibrium point.”

Brown says some producers may look at alternatives like converting cropland to pasture or participating in the Conservation Reserve Program (CRP) — though that has its own tensions.

“I know there’s a lot of hard feelings around CRP in some cases, because it feels like the government’s competing with you for land, and I get it,” he says. “But that’s one of those programs that could take land out of production in the short run.”

‘We Can’t Keep Bleeding Equity’

Brown says the best way forward is to rethink what can be controlled — even if that means changing long-standing practices.

“So, what are the things that we can control? Well, being disciplined in our cost,” he says. “Is there something that can help us reduce our cash rent burden? Maybe crop share. I have not heard a lot of producers ask about crop share agreements yet this year, but that would be one indicator that people are starting to say, ‘Hey, I’m trying to figure out a way to share that risk with my landowner.’”

He adds that new lease structures and risk-sharing arrangements could be key survival tools.

“It’s going to take a change of behavior,” Brown says. “We can’t just keep doing the same thing we’re doing, or we’re just going to keep bleeding equity. The takeaway is we need to start re-evaluating and figuring out — if this continues for a while — what are the things I can control now before I run out of options?”

A Heavy Decision for Generational Farms

For many, 2026 is shaping up to be a turning point — not just for operations, but for legacies.

“I think it’s going to be a very personal decision that they’re going to have to make,” Taylor says. “Do they give up on land that they’ve had in their family for generations? Do they look for other options? It’s giving up on a lifestyle. It’s giving up on a business that is intergenerational. And there are heavy consequences to that.”

In farming, so much is out of your control: the commodity markets, weather, input prices. But farmers are shouldering an even bigger weight this year - and that’s the fact they don’t want to be the generation that loses the farm and breaks their family’s legacy.

Taylor says the emotional weight of those choices goes beyond numbers on a balance sheet.

“Some people are able to run their farms strictly as a business — it’s just a business decision,” Taylor says. “But for most farmers, it’s not. It’s also a personal lifestyle, a family operation. And I think that’s what’s gonna make these decisions even harder than just the dollars and cents in the spreadsheet.”

Consolidation Concerns Grip Agriculture

It’s the unfortunate reality of agriculture today: as some farms are forced to exit farming, it accelerates consolidation in agriculture. In fat, nearly all economists surveyed in the Ag Economists’ Monthly Monitor foresee continued or accelerated consolidation in agriculture into 2026 .

Bill Lapp, founder and president of Advanced Economic Solutions, points to a steady trend of consolidation in agriculture.

“We used to have a lot more farmers. Today the same acreage is being farmed by fewer producers who are farming a larger scale of acres,” he says.

In the face of margin pressure, Lapp says consolidation accelerates when it comes to farmers who are:

ready to retire
voluntarily stopping farming
being forced out of farming after multiple years of financial stress

While there is an average rate of farmer retirements every year, Michael Langemeier, ag economist at Purdue University, says hard economic conditions spur many to consider it earlier than normal.

“You do see an uptick in farm retirements when you have low margins like this. We saw that back in the 2014 to 2019 period,” Langemeier says. “We had some really good years in 2021, 2022 and 2023, and quite frankly, if you’re at retirement age, it’s just not as fun to farm when you have extremely low margins. We’ll have an uptick of retirements during 2025/2026.”

Farming is a competitive business, but it’s that competition and farmers desire to add more acres - no matter the cost- that can create the most economic pain.

“The mistake we are making is the over enthusiasm of outbidding the other farmer down the road for cash rents,” says Arlan Suderman with StoneX Group. “That will eventually result in pain. In the moment, they aren’t paying attention the economic reality.”

The result is cash rents remain high, all while major commodity prices have fallen 50% in just a few years.

“The painful reality is we may not fix the land rent issue until farmers say ‘no.’ That’s an emotionally difficult thing for them to do, especially if the farmer down the road is willing to do it. It’s a painful part of the cycle, and it’s probably required,” Suderman says.

You can read more about the consolidation concerns here .

China's Trade War Playbook Keeps U.S. Soybeans Sidelined

Fri, 24 Oct 2025 18:35:25 GMT

As combines roll across soybean fields at the start of harvest, exports typically pick up. Vessels ladened with the U.S. oilseed usually begin heading to China, with the bulk of shipments made between September and January.

That’s not shaping up to be the case this year.

Not a single order for the U.S. soybean crop was placed by China at the start of harvest in September.

At about the same time, Brazil set a record for shipments to China – with sales of 2.474 billion bushels of soybeans – from January through August 2025, reports Michael Langemeier, Purdue University ag economist.

Brazil soybeans have accounted for approximately 93% of China’s total soybean imports this year, to date, according to Brazil’s National Association of Grain Exporters.

‘A More Reliable Source For Soybeans’
Langemeier expects Brazil to continue supplying the majority of China’s import needs for soybeans, a transition he says has been underway since the last round of U.S.-China trade tensions in 2017-18.

“Brazil has become a more reliable source for soybeans, if you will, than the U.S.,” Langemeier says.

He does anticipate U.S. soybean exports to China will resume eventually but not at previous levels.

“I don’t believe it’s going to go to zero – people ask me that all the time – but it’s going to be something less than what it was prior to 2025,” he says.

A large percentage of U.S. ag economists agree with Langemeier. In the latest Ag Economists’ Monthly Monitor, when they were asked, ‘Do you believe U.S. agricultural exports to China will return to pre-trade war levels (e.g. 2017) in the future,’ 88% of economists responded no. Learn more here: Ag Economists Warn of Lingering Farm Economic Strain: ’Not the 1980s, But Close’

The ability of Brazil to capture more of China’s soybean business and improve its government policies pertaining to agriculture, in general, frustrates Steele, N.D., farmer Chase Dewitz.

“There’s so much progress going on there in agriculture in Brazil, outside of all the market share they’ve taken from us,” says Dewitz, referencing the country’s ethanol industry. “And here we just sit. We just keep getting backed into a corner here.”

China Prioritizes Its Own National Interests
Sandro Steinbach says China’s refusal to buy U.S. soybeans this fall is less about economics and more about politics.

“China is making a calculated move to limit its dependence on the United States,” says Steinbach, associate professor and director of the Center for Agricultural Policy and Trade Studies at North Dakota State University.

“If Chinese leaders see Washington as a strategic threat, they have the resources to pay a little more for Brazilian soybeans or draw down state reserves,” he contends. “It’s about control and national leverage, not about getting the cheapest beans.”

Steinbach adds, in an effort to not be overly reliant on either Brazil or U.S., Beijing is also working to reduce its overall need for imported soybeans through domestic feed policy changes.

“Our latest analysis shows Chinese feed mills are exploring ways to lower the share of soybean meal in livestock rations, with limited pilot programs already underway in several provinces,” he says. “If those efforts expand, even small cuts in feeding intensity could trim import needs, but they come at a cost. Lower-protein rations reduce feed efficiency and could hurt China’s livestock productivity over time.”

Faith Parum, American Farm Bureau Federation economist, points out that the ongoing trade tensions between the U.S. and China aren’t limited to soybeans. She says China has not “purchased any U.S. corn, wheat or sorghum this year, and pork and cotton exports continue only at reduced levels.”

USDA projects that U.S. agricultural exports to China will total $17 billion in 2025, down 30% from 2024 and more than 50% from 2022. In 2026, exports to China are expected to fall to just $9 billion, the lowest level since the 2018 trade war, Parum adds.

Trade Talks Next Week Offer Hope
Jacquie Holland, American Soybean Association economist, says upcoming meetings between President Trump and China’s Xi Jinping at next week’s APEC summit in South Korea offer farmers some encouragement that trade between the two countries will resume soon.

“If we see a de-escalation of tariffs, then China will have financial incentive to buy cheap U.S. soybeans,” Holland says.

She adds that if Brazil farmers have any delays harvesting their crop early in 2026, the Chinese could face a potential supply crunch and move to source U.S. soybeans to bridge the gap.

“But our research suggests those volumes could be minimal, based on the high volume of South American purchases China has made so far in 2025, the capacity of their state reserves, the timing of China’s hog production cycles and negative Chinese crush margins right now,” Holland says.

Farmers across Brazil have begun planting the 2025/26 crop season, with expectations for another record in corn and soybean acreage, report Purdue Ag Economists Langemeier and Joana Colussi.

“In its preliminary estimate released on October 14, the National Supply Company (Conab) projected that Brazil’s soybean acreage will increase by 3.5%, reaching 121 million acres – the largest area on record. For comparison, U.S. farmers planted 81 million acres of soybeans in the current crop season,” Langemeier and Colussi write here .

If Trade Doesn’t Resume Soon, What Then?
Unfortunately, there is no one country or market that can absorb China’s lost U.S. soybean purchases.

“There are certainly opportunities for some market expansion, as evidenced by Japan’s sentiments to increase trade on Wednesday, but the biggest constraint is that demand outside of China is limited in the short-run,” Holland says. “Long-term, we are hoping to develop these markets, but that takes time and doesn’t provide immediate relief to U.S. farmers now.”

Looking ahead to next spring, farmers are likely to plant another huge corn crop if a trade agreement isn’t reached and soybean prices remain in the basement, Langemeier anticipates.

“In that scenario, if we have two big years of corn production back-to-back, you’re going to be looking at some very sick corn prices in the fall of 2026,” he says. “That’s a big concern. That worries me.”

Holland adds there are other factors to consider, as well. She believes soybean acreage next spring will also depend on usage factors like how quickly EPA finalizes 2026 and 2027 renewable volume obligations for biofuel blendings and how fast the U.S. can expand domestic livestock consumption and export sales for soymeal.

“With all of that uncertainty and sticky input prices, I wouldn’t blame farmers for picking lower risk acreage options next spring, and I’m guessing 2026 acreage allocations are going to rightly reflect that level of risk aversion,” she says.

Holland discusses the soybean trade outlook with China in detail with Chip Flory, host of AgriTalk, here:

Consolidation Concerns Rise As Economists Expect Stagnation or Continued Stress

Fri, 24 Oct 2025 17:18:20 GMT

As reported in the latest Ag Economists’ Monthly monitor, nearly all economists foresee continued or accelerated consolidation in agriculture into 2026. The respondents warn of:

Businesses of greater scale and reduced rural populations.
One economist says there will likely be “fewer larger farms and fewer larger crop service centers who provide farmers with supplies.”
Mounting obstacles for some segments of farmers.
Another economist anticipates “higher barriers to entry for young and beginning farmers. Dwindling political support for agriculture.”
Loss of political and economic diversity in rural America.
“Larger operations will get larger, and we’ll lose some of the diversity that smaller producers bring to the industry.”
Potential efficiency gains but worsening rural socioeconomic divides.
“The continuation or acceleration of trends toward fewer prosperous rural communities” could result from consolidation in agriculture, says an economist.

Shrinking Pool of Farmers Grow in Scale

Bill Lapp, founder and president of Advanced Economic Solutions, points to a steady trend of consolidation in agriculture.

“We used to have a lot more farmers. Today the same acreage is being farmed by fewer producers who are farming a larger scale of acres,” he says.

In the face of margin pressure, Lapp says consolidation accelerates when it comes to farmers who are:

ready to retire
voluntarily stopping farming
being forced out of farming after multiple years of financial stress

While there is an average rate of farmer retirements every year, Michael Langemeier, ag economist at Purdue University, says hard economic conditions spur many to consider it earlier than normal.

“You do see an uptick in farm retirements when you have low margins like this. We saw that back in the 2014 to 2019 period,” Langemeier says. “We had some really good years in 2021, 2022 and 2023, and quite frankly, if you’re at retirement age, it’s just not as fun to farm when you have extremely low margins. We’ll have an uptick of retirements during 2025/2026.”

As for the geographic areas most prone to consolidation, Arlan Suderman, chief commodities economist for StoneX Group Inc., points to the Plains and Mid-South, which persistently carry the tightest margins for production.

Highlighting the obvious but also an area of caution, when farmers retire, owned land and rented acres become available to the market, Suderman says.

“The mistake we are making is the over enthusiasm of outbidding the other farmer down the road for cash rents,” he adds. “That will eventually result in pain. In the moment, they aren’t paying attention the economic reality.”

He says this is particularly noticeable with younger farmers who might be eager to grow the size of the operation.

“We have a whole generation who only knew good prices and low interest rates. Now prices are low, interest rates are elevated and input prices are high,” Suderman says.

Cash rents provide a frontline perspective to potential economic downfall.

“The painful reality is we may not fix the land rent issue until farmers say ‘no.’ That’s an emotionally difficult thing for them to do, especially if the farmer down the road is willing to do it. It’s a painful part of the cycle, and it’s probably required,” Suderman says.

Ag Retail Sector Faces Changes

Lapp says he’s also watching the farmer-adjacent businesses — those who provide products and services.

“This financial stress carries into the suppliers, grain elevators, co-ops and ag banks,” he says.

Brad Oelmann, a consultant in the ag retail business, says he foresees continued consolidation in the ag retail space, perhaps slightly higher than normal.

“I don’t think it’s always economy-related,” he says “It starts with succession planning, costs to implement technology and managing risks with higher input costs. Those are the primary drivers right now.”

Regarding the consolidation of ag retail locations, Oelmann says labor availability has accelerated that trend.

In the near future, if there is a segment in the retail industry that could face more consolidation, he points to smaller to medium-sized businesses, and perhaps cooperatives more so than the independents.

Ag Economists Warn of Lingering Farm Economic Strain: ’Not the 1980s, But Close’

Thu, 23 Oct 2025 22:35:02 GMT

The October Ag Economists’ Monthly Monitor paints a tough picture for U.S. farmers heading into 2026: weak trade demand, stubbornly high input costs and continued consolidation across agriculture. While experts say today’s challenges don’t match the full-blown crisis of the 1980s, most agree the current downturn is dragging on with few signs of a quick turnaround.

“High input costs and the inability of domestic soybean crush growth to offset lost Chinese demand” continue to weigh heavily on profitability, one economist explains.

Another adds: “The lack of trade opportunities, and high input costs, are doing the most damage right now.”

A third economist sums it up more bluntly: “Margins are collapsing, and optimism is evaporating fast.”

By the numbers, here are highlights from the latest Ag Economists’ Monthly Monitor.

(Lori Hayes )

Conditions Expected to Continue or Worsen Into 2026

One of the major themes in the latest survey is the fact negative margins could be a theme for row crop agriculture for the foreseeable future.

Nearly 60% (59%) of economists say the farm economy is worse off than a month ago, and almost 90% believe it’s weaker than last year. 76% expect the situation to persist or even worsen through 2026, while only a quarter expect any improvement in the next 12 months. As one economist puts it: “It’s not a collapse, but it’s a grind.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

Others emphasize the fatigue setting in across the countryside.

“Farmers have been absorbing higher costs for two years without any real recovery in prices,” says one respondent.

“That wears on you,” another adds. “It’s like death by a thousand cuts — not one thing is breaking the farm economy, but everything’s contributing.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

With nearly eight out of every 10 economists surveyed projecting conditions to persist or worsen over the next 12 months, Ben Brown, University of Missouri Extension economist, says it reiterates the concern that farmers could face more tough decisions next year.

“I think the expectation for conditions to stay challenging shows up in multiple points of the responses, just this continued downturn and extended pressure on farm finances absent some type of market rally. Maybe that’s a yield shortfall due to drought somewhere in the world. But absent of that, I think we’re this slow grind lower trying to figure out how to find an equilibrium point where producers are looking at moving cropland out of production, maybe putting it to more pasture or CRP,” Brown says. “Long story short, we’re looking for any of those available measures that reduce production enough to help rally prices.”

Even livestock markets, one of the few bright spots, come with caveats.

“Livestock returns have been better than nearly anyone expected at the beginning of the year,” one economist notes, “especially cattle and hogs.”

But another warns: “If consumer spending slows down, beef and pork demand could take a hit, and that changes the outlook quickly.”

Echoes of the 1980s — But Not the Same

While 69% of economists say today’s farm economy shows similarities to the 1980s crisis, most stress the safety nets are stronger now.

“There are far more safeguards today: crop insurance, FSA loan programs and countercyclical payments,” one economist says.

Still, they caution against complacency.

“While farm bankruptcies may increase, it’s not likely to reach the 1980s level,” another economist adds, “but let’s not understate how bad things are now.”

Another adds: “The lack of profitability for row crops and the number of farmers exiting the industry — that’s what feels eerily familiar.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

One economist offers a sobering parallel, saying: “Things are bad — even if it’s not the same type of bad as the ’80s. The difference is this time, it’s a slow burn instead of a crash.”

University of Missouri’s Brown says the similarities between now and the 1980s are glaring: Profitability and working capital have eroded for several consecutive years.

“That liquidity issue is really starting to impact some of the broader financial indicators,” he says. “That’s what’s similar [to the 1980s] is the tight liquidity margins. We’ve seen farm bankruptcies start to take up as well. They’re not as high as what we saw during the 1980s yet.”

Yet, Brown points out there are some clear differences, as well as indicators, such as land values, that signal this period is vastly different from the 1980s.

Farm Consolidation Pressures Mount

Nearly all economists see continued consolidation reshaping rural America. In the September survey , 91% of ag economists said they expect the current situation to accelerate the current rate of consolidation in agriculture. In this month’s survey, economists think this will cause fewer, larger farms, fewer service centers and higher barriers for beginning farmers.

“Larger operations will get larger, and we’ll lose some of the diversity that smaller producers bring to the industry,” one respondent says.

Another adds: “Fewer, larger farms mean fewer families in rural communities — and less political and economic diversity.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound )

Some economists express concern over how this trend could alter the future of farming.

“Higher barriers to entry for young farmers, dwindling rural populations and loss of local ag suppliers — that’s where we’re headed,” one respondent warns.

Another sums it up: “We’re becoming a nation of mega farms. That’s efficient, but it’s not healthy.”

Livestock Outlook Still a Bright Spot

Nearly half of the economists expect the cattle bull market to continue for another 19 to 24 months, while others see a slowdown by late 2026 as herd rebuilding begins.

“At current prices, we’ll see no or little herd expansion,” one economist warns. “Clear signals that domestic beef production is increasing may be the key catalyst for a market top.”

October Ag Economists’ Monthly Monitor

(Lindsay Pound )

Others were more optimistic, saying the current supply and demand picture will continue to provide fuel to the current cattle market.

“Tight supply and strong global demand could keep this market higher for longer,” one respondent writes, “but beef demand depends on consumers continuing to open their wallets.”

Another adds: “The market’s got legs — but it’s walking on thin ice.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

It’s key to note this survey was conducted prior to President Donald Trump saying the U.S. would start importing more beef from Argentina, while also suggesting the White House is working to bring beef prices down . Once that news broke this week, the cattle markets crashed, sending cattle futures limit down.

Why are U.S. farmers and ranchers furious about the Trump administration’s new allegiance with Argentina? Arlan Suderman says it’s all part of a 3D chess match with China. He explains the complex relationship, and the impact on U.S. farmers and ranchers, in the video below.

Trade Troubles Deepen

China’s cooling appetite for U.S. ag products remains a major worry. The October survey found 76% of economists believe China won’t return to 2022 purchasing levels, and 88% say pre-trade-war demand is gone for good.

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

“China has been working toward deleveraging from the U.S. for two decades,” one expert says. “This is the culmination of a long-term process.”

Another wrote: “China will not purchase U.S. ag products unless it has to; it will always prefer other suppliers.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound )

The biggest winner? Brazil. When asked who’s winning the trade war between the U.S. and China, 100% of economists said Brazil.

“Brazil has definitely benefited; it’s literally being handed additional market share,” another economist notes.

Others agree: “Make Brazil great again — that’s what’s happening,” one quips. Several economists warn if the U.S. doesn’t aggressively pursue new markets, “our export position could permanently erode.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

Looking Ahead

Despite stronger farm balance sheets and fixed-rate debt, the mix of low profitability, high costs and global oversupply continues to pressure producers. Labor shortages, rising cash rents and limited trade growth are adding to the strain.

“Rising cash rents are eating into margins faster than yields or prices can recover,” one economist says.

Another points to policy fatigue: “There’s too much focus on short-term trade aid and not enough long-term market strategy.”

As one respondent summarizes: “Things are bad, even if it’s not the same kind of bad as the 1980s. We’re in a long, grinding cycle — and patience is wearing thin.”

Breaking Down the 4 Biggest Challenges Facing the Ag Economy

Mon, 29 Sep 2025 19:15:37 GMT

Farm Journal’s Ag Economists’ Monthly Monitor, an anonymous survey sent to nearly 70 ag economists each month, shows growing concern about the farm economy. “AgriTalk” host Chip Flory breaks down the latest results, pointing to four key findings.

1. Recession Calls Hit a Survey High

A record 91% of ag economists now say the farm economy is in a recession. That’s the highest level since the survey began, fueled by record input costs while commodity prices remain depressed. Still, about 10% pushed back, arguing that as long as farmland values hold strong, agriculture’s store of wealth remains intact and technically keeps the sector out of a recession.

“Basically what they’re saying is that we’re not going to be in a recession until we see land prices start to pull back,” Flory explains. “That’s where agriculture stores its wealth. As long as those land prices hold up … we are not going to be in a recession as long as that store of wealth remains safe.”

91% of ag economists say the crops sector of agriculture is currently experiencing a recession, which is a survey high.

(September Ag Economists’. Monthly Monitor )

2. Bleak Outlook for 2026

46% of ag economists say the economy situation is “somewhat worse off” compared to last month and 27% say it’s “much worse off” compared to last year.

(Lindsey Pound, September Ag Economists’ Monthly Monitor )

While opinions about the next 12 months are mixed — 50% expect some improvement, 30% think it will worsen — the longer-term picture is troubling. Economists expect 2026 corn and soybean crops to be breakeven at best, with potential losses of up to $200 per acre.

“The expectations on the ’26 crops are that, at best, it’s going to be breakeven on corn and soybeans,” Flory says. “There’s expectations for losses up to $200 an acre among the survey respondents … We’ve drained a lot of working capital out of the industry already. And it’s really going to get tight in 2026 if this continues.”

Results from the latest Ag Economists’ Monthly Monitor

(Lindsey Pound, Ag Economists’ Monthly Monitor )

3. Soybean Exports Under Pressure

Economists see U.S. soybean demand as vulnerable. USDA currently projects 1.705 billion bushels in exports, but survey respondents say that’s a best-case scenario. Some expect exports could fall below 1.4 billion bushels, a 300-million-bushel drop that could be catastrophic.

“China is obviously doing everything that it possibly can to avoid buying U.S. soybeans,” Flory says. “The current USDA export estimate … is a best-case scenario that the economists expect. Some see it all the way down under 1.4 billion bushels. To take another 300 million bushels off of bean export demand might be catastrophic.”

There are still a majority of economists who think China will still buy soybeans from the U.S. this year, with 54% responding “yes.”

Even though China has bought zero new crop soybean cargoes from the U.S., more than half of economists still think China will come to the table in 2025.

(Lindsey Pound, September Ag Economists’ Monthly Monitor )

4. Screwworm Detection Near Border Raises Concerns Over Mexican Cattle Imports

This week, New World screwworm was detected just 70 miles from the U.S.–Mexico border, sparking renewed debate over cattle imports and whether USDA should keep the border closed to live cattle imports.

In the September Farm Journal Ag Economists’ Monthly Monitor, economists were asked: Should the U.S. reopen its border to cattle imports from Mexico? Eighty percent said no.

91% of ag economists say the crops sector of agriculture is currently experiencing a recession, which is a survey high.

(September Ag Economists’. Monthly Monitor )

Their concern is the risk of screwworm spreading to U.S. herds.

“It’s important we continue to protect the health of our beef herd. Screwworm could have a devastating effect,” said one economist.
“Each day of delay [on reopening the border] gives more time to develop effective treatments/response,” was another response.

With the U.S. cattle herd already at a 75-year low, screwworm infestations can cause massive losses in livestock, threatening both animal health and, according to economists, the ag economy.

The Bright Spot: Beef Demand Stays Strong

There is a bright spot. Despite record-high retail prices, which economists thought would taper the hunger for U.S. beef, beef demand is holding firm. Two-thirds of economists say beef demand is inelastic, meaning consumers keep buying even as prices rise.

Even with record retail beef prices, the majority of ag economists say beef demand is proving to be inelastic.

(Lindsay Pound, Ag Economsits’ Monthly Monitor )

“It’s quality. Quality is a big part of the reason why,” Flory says. “We’ve done an unbelievable job responding to consumer demands to put choice and prime beef in the meat case … Consumers recognize the improvement in quality, and they’re responding by continuing to buy beef. The other thing is … high protein diets. That is a real thing that we need to adjust to, not only in beef, but in pork too.”

You can see the full results of the latest Monthly Monitor here .

How Will The Ag Economy Climb Out of Its Bottom?

Fri, 26 Sep 2025 20:29:41 GMT

According to the latest Ag Economist’s Monthly Monitor, all respondents say the U.S. ag economy is in worse shape than one year ago (27% much worse off, 73% somewhat worse off). As this year marks the third year or economic hardships for many row crop producers, economists believe we might have found the bottom of this ag cycle.

“We’ve got to bridge the gap to next year, where things look better from the policy perspective,” says Grant Gardner, University of Kentucky ag economist. “From that point on, it’s about what farmers can weather, and if we can get a bump to push beans to $11 cash price and see cash $5 corn. That’s what’s needed with input prices today,”

Perhaps the biggest question beyond how long farmers can persist through the tough conditions is what it will take to bounce out of this recession. Ag economists point to more than a handful of factors impacting profitability for row crop farmers , including low grain prices, high input costs and trade uncertainty.

“The current era of relatively low commodities prices can be defined not as prices relative to historical prices, but the price ratio to input costs,” says Ben Brown from the University of Missouri. “The financial burden of these low price ratios to input cost situations becomes particularly acute when consecutive years are stacked together — as we are seeing now.”

Long-Term Solution

Ag economists point to one action that would inject positivity in the outlook for row crop profitability — a trade deal with China. Based on the September survey, 77% say current U.S.-China trade policies hurt farmers, but uncertainty still looms as 54% think China will buy U.S. soybeans in 2025.

“It’s fair to say a trade deal with China is the silver bullet,” says Michael Langmeier at Purdue University. “Trade uncertainty hurts farmers short-term and long-term. We’ve already hurt our export prospects for ’25. We are so far behind. Long term I worry about losing market share for China.”

Langemeier says Brazil has been expanding soybean production since 2018 and could become China’s sole supplier of soybean imports.

Gardner echoes the importance of China for soybeans.

“The best hope we have — a trade deal with China,” Gardner says.

While Brown agrees there’s no 1-for-1 substitute for China when it comes to trade, he’s optimistic for expanding efforts to additional export countries and building domestic demand.

“There has been a lot of talk about reshuffling the deck and effectively trading players. That will happen to a point, but there is not a full substitution — we call this “slippage.” If we can’t replace China, can we reconstruct them?” Brown says. “I would argue we can. It comes in a variety of small changes that seem inconsequential but add up.”

He says while none of these examples individually equal China’s tons, they help consume the abundant supply of U.S. crops: increased support for domestic biofuels use, more research and development around products using soybean by-products and lowering restrictions and red tape on other international countries.

Short-Term Solution

From the September monthly monitor, 62% of economists say direct government payments would provide meaningful relief, though many believe challenges are too severe for short-term fixes.

“Short term, the pain is here,” Langemeier says. “Having an MFP payment is going to get us over the hump.”

He cites 50¢ to 75¢ per acre would be an “immense” help, which is lower than the 80¢ to 90¢ payments in 2018.

“When you look at the ARC and PLC programs, the One Big Beautiful Bill upped some of the payments. But payments won’t come until October 2026. Farmers need the payments now. There’s an urgency. Net income in 2024, 2025 and 2026 is ugly. This isn’t like 2014 to 2019, when only one year was bad — 2015. This is just as bad, but we’ve got three years in a row,” Langemeier says.

Brown and Gardner agree there’s a lot at stake with the current conditions and farmers could go out of business.

“My sense is there are farms that will go out of business regardless of if there are payments or not,” Brown says.

Gardner says the current financial support being discussed for farmers won’t equal profitability for farmers, but rather just survivability.

“If you look at where the payments were recently, it may cover some loss, and it may cover enough loss to keep a farmer producing into the next calendar year, but it won’t make them whole. There’s still going to be a loss,” Gardner says.

Survey High: 91% of Ag Economists Say Crop Sector in Recession, Losses Likely Through 2026

Fri, 26 Sep 2025 18:18:09 GMT

The financial squeeze gripping row crop agriculture is only growing more severe, according to the latest Ag Economists’ Monthly Monitor. As of September, 91% think the U.S. crops sector is in a recession, which is an all-time high for the anonymous survey, and few see relief in sight.

In July, 53% of ag economists responded agriculture was in a recession. That number was 72% in May .

Economists point to low grain prices, high input costs and trade uncertainty, especially with China, as t he biggest drags on the farm economy . Beef prices are providing some cushion, but economists say it’s not enough to offset row crop challenges.

“2025 is bringing negative returns for at least the third consecutive year across nearly all row crops, with 2026 setting up to be another negative returns year.”
“Multiple years of low to no profitability qualifies as a recession to me.”
“We are near record low prices and record high inputs.”
“Net farm income is consistently negative.”
“I fear that commodity prices may have found a ‘new normal,’ so adjustments may have to occur (painfully) on the cost side.”

Those economists who say row crop agriculture is not in a recession point to land values and cash rents as the main reasons.

“The U.S. crop sector is losing working capital, but cropland values are showing little weakness, either in terms of rents paid or cropland prices. Until the latter two start to weaken, the sector is not in a recession,” said one economist. “I understand government payments from crop insurance, commodity programs and ad hoc assistance are a key reason, but government payments have been a constant presence over the last 10 years. They are a second source of income. You cannot simply ignore them in answering this question, especially given the changes made in the 2025 farm bill.”

Consolidation Concerns Continue

As more farmers face financial collapse , 92% of economists think the situation will accelerate consolidation.

“We are currently in a sustained period of high costs and low prices across the crop sector — this will cause some farmers to go out of business sooner than expected.”
“Hard times drive us toward higher efficiencies, which often leads to consolidation.”
“Larger producers are likely to have more wherewithal to sustain losses than smaller producers.”
“The most efficient and well-capitalized producers will survive and absorb land from the least efficient producers.”

2026 Could Be Another Year of Negative Returns

46% of ag economists say the economy situation is “somewhat worse off” compared to last month and 27% say it’s “much worse off” compared to last year.

(Lindsey Pound, September Ag Economists’ Monthly Monitor )

Nearly half (46%) of ag economists say the ag economy is somewhat worse off in September compared with August, and 27% say it’s worse off versus 2024.

The outlook for next year is mixed. Fifty percent say it will be somewhat worse off or unchanged, while the other half expect the situation to slightly improve. Most economists expect continued financial stress into 2026, with projected losses of $100 to $199 per acre for corn and $100 to $199 per acre for soybeans.

Producers are Looking to Cut Costs

The September Ag Economists’ Monthly Monitor asked what is the most likely cost-saving option for producers for the upcoming year.

(Lindsey Pound, September Ag Economists’ Monthly Monitor )

Farmers are postponing major equipment purchases, a trend that’s plagued the equipment industry the past two years. The latest Association of Equipment Manufacturers (AEM) report for August 2025 showed U.S. tractor sales fell 8.2% and combine sales dropped 34.6% compared with August 2024.

With the majority of economists forecasting the row crop side of agriculture to produce negative margins in 2026, farmers could be looking to cut back even more. Other than reducing machinery purchases, the majority of ag economists (85%) think farmers will slow technology upgrades. Fifteen percent say farmers will reduce fertilizer use. None of the economists surveyed think farmers will sell farmland.

The China Effect on the Ag Economy

Economists say the lack of export demand from China is having a negative impact on U.S. agriculture. In fact, 77% of economists surveyed say current U.S.-China trade policies are hurting farmers. Half of the respondents (54%) in the September survey think China will buy soybeans in 2025.

Even though China has bought zero new crop soybean cargoes from the U.S., more than half of economists still think China will come to the table in 2025.
(Lindsey Pound, September Ag Economists’ Monthly Monitor )
“We have a demand problem — or more specifically we have a demand access problem,” said one economist.
“Record high cattle prices are helping to offset the challenging conditions for grain producers. Uncertainty related to China, trade policy and tariffs [is a major risk].”
“The long-term damage to our trade relations. It will take years to solve,” was another response.

Possible Economic Aid for Farmers

As China remains absent from buying U.S. soybeans , it’s having a negative impact on soybean prices. Areas that rely heavily on China’s business, such as the Northern Plains, are seeing cash soybean prices in the $8 range.

Secretary of Agriculture Brooke Rollins said Wednesday an economic aid package for farmers has been the focus of conversations at the White House. Some type of program and payments will be announced very soon, Rollins said, and while void of details, she promised such announcement will be made “in the next two weeks.”

President Donald Trump also made remarks in the Oval Office Thursday, saying he will use tariff revenue to bail out farmers.

“We’re going to take some of that tariff money that we made, we’re going to give it to our farmers, who are, for a little while, going to be hurt until the tariffs kick into their benefit,” Trump told reporters. “We’re going to make sure that our farmers are in great shape because we’re taking in a lot of money.”

62% of ag economists say direct payments like the Market Facilitation Program benefit crop producers.

(Lindsey Pound, September Ag Economists’ Monthly Monitor )

Considering the factors impacting farmers, such as trade policy, interest rates, commodity prices and input costs, 62% of ag economists said government direct payments benefit crop producers. Fifteen percent say such payments wouldn’t adequately address the challenges, while 23% think a different approach would be more effective.

Overlooked Issues in Agriculture

Ag lenders in some regions, such as the mid-South, warn farmers are experiencing the most financial stress since the 1980s . While the issues are at the forefront of conversations, the latest survey also asked economists to chime in on other agricultural issues currently being overlooked:

“The increasing percentage of farmland that is owned by absentee, non-operators … I’m seeing more investor activity, creating greater competition with actual operators.”
“Storage problems in the northwestern Midwest due to a lack of trains moving soybeans to the PNW.”
“The risk to the U.S. farm economy of weaker global economic growth … there is a broader set of macroeconomic uncertainties that affect world demand for agricultural products.”
Interest rate impact on asset values (not borrowing costs).
“Macroeconomic uncertainties that affect world demand for agricultural products, many of which have little or nothing to do with U.S. policies.”
“Tax rollover and the fact that even with significant losses, many taxes will become due this year.”
“The benefits of trade. I know it is talked about a lot, but it’s still not enough relative to how important it is.”

Is the Ag Economy in a Recession? Why Economists and Farmers Don't Agree

Fri, 08 Aug 2025 19:34:49 GMT

Fewer agricultural economists think the row crop side of agriculture is currently in a recession, but when you consider most major row crops are seeing four consecutive years of poor profit margins, farmers argue an agricultural recession is currently underway.

Fifty-three percent of agricultural economists surveyed in Farm Journal’s July Ag Economists’ Monthly Monitor say the row crops side of agriculture is currently in a recession, which is down from the 72% who responded that way in May .

For the 53% who think agriculture is in a recession, economists argue the poor profit margins and another year of projected negative returns mean any cash reserves are being drained.

In the July survey, economists said:

“While the BBB will raise reference prices for the ARC and PLC, current market prices remain low, and crops went in with expensive inputs, so most producers are going to have a hard time profiting under the current conditions. Losses may be lessening but it’s a tough situation for grain producers.”
“2025 is bringing negative returns for at least the third consecutive year across nearly all row crops, with 2026 setting up to be another negative returns year.”
“Farmers are seeing cash flow drain and lower revenues compared to the past two years.”

The negative returns projected for 2025 and 2026 aren’t just due to low commodity prices, but the fact input prices, like fertilizer, are trending higher.

The poor profitability picture is impacting nearly every major row crop in the U.S., with at least four consecutive years of negative margins when you look at just the price versus costs.

(Krista Swanson, National Corn Growers Association )

Krista Swanson, chief economist for National Corn Growers Association (NCGA), says poor profitability margins are projected for every major commodity in the U.S.

“I think the big concern, especially as we turn to looking at 2026, is that we’re talking about for almost every single crop, 2026 being at least the fourth consecutive year of negative returns, and we’re not just talking about small negative returns on average, but over $100 an acre losses, and again, that’s not accounting for crop insurance or any government payments that is specifically looking at costs and returns from those grain sales,” Swanson says.

Why Some Ag Economists Argue Agriculture Isn’t in a Recession

Additional farm program payments from Congress, along with the fact land prices aren’t declining, are two reasons 47% of ag economists argue the ag economy isn’t in a recession.

In the July survey, ag economists who say the row crop side of agriculture isn’t in a recession, gave the following reasons:

“Farm program payments and strong corn exports. Land prices also do not appear to have declined, according to the August land report from USDA.”
“Although prices are currently low, production prospects are very good, supporting expected crop revenue and lowering crop cost of production per unit.”
“Prices and income are down sharply from their 2022 peak. Defining a ‘recession’ for a sector is difficult. To me, it implies a temporary downturn, but something like current prices appears more likely to be ‘the new normal’ than a temporary blip.”
Although crop farms have been facing considerable financial challenges, so far, farm finance has been sustained by cutting down on some of their working capital. I would worry about the actual (bigger) recession possibly to come. In my opinion, tariff effects will be less likely to take place immediately in this harvest season, but the shock (without negotiation scenario) will likely hit the farm input cost first, threatening farm financial health of 2026.”
“Government payments and crop insurance guarantees are removing the downside risk that would typically allow input costs to reset.”

Ohio State’s Carl Zulauf agrees a price squeeze is impacting margins for farmers, but a big piece of why he doesn’t think U.S. agriculture is in a recession is land values.

“It’s a price squeeze on the input prices versus the cost of the output prices,” Zulauf says. “But I think for the farm economy to be in a recession, you have to see some softening land prices both on the rental side and on the ownership side. And USDA just released on the first of August their latest land estimates, and I think a fair characterization of it is that land values were up, cash rent was stable to slightly up. That does not corroborate in my mind with a sector that’s in recession.”

American Farm Bureau Federal looks at how land values have trended over time. This is based on the latest UDSA NASS data.

(American Farm Bureau Federation (AFBF))

USDA’s annual land survey released earlier this month shows on average, land real estate values came in at $4,170 per acre in 2025, which is a 4.3% increase from 2024.

Zulauf says you can make an argument that land values are holding steady because of government payments.

“But the point is that government payments are at least apparently keeping the land price in check,” he says. “And that’s a really big thing because of borrowing capacity and all that that goes along with asset prices.”

Not Just the Midwest and South Feeling the Financial Pinch

July Ag Economists’ Monthly Monitor

(Lindsey Pound )

The latest Ag Economists’ Monthly Monitor also asked which region of the country is seeing the most severe financial pressures impact farmers.

38% responded the Midwest
15% said the Mid-South
8% responded the West
8% also said the Northwest

“The first thing I have to remind everybody is we are incredibly diverse,” says Dan Sumner, an agricultural economist with the University of California, Davis. “So the top ag commodity in California is milk. And milk isn’t doing that bad these days in terms of prices. Beef is also a huge part of our economy. So I picked the two that are doing OK. The rest of them are struggling.”

He says from tree nuts to fruit and grapes, growers in California are also struggling with lower prices and higher costs.

He says the grape industry, especially wine grapes, are struggling with a demand problem. Tariffs and the uncertainty surrounding trade is also impact tree nuts and other fruits.

“Since China used to be such a big market for them, and China, you’re dealing with the government there. So you could write down what the tariffs are, and then you write down what the government policy says to the importers, and of course they’ve got their centrally planned economy. So it’s been tough on tree nuts with the loss of that Chinese market,” he says.

What to Watch Over the Next 12 Months

Economists say trade will play a major factor in the health of the ag economy over the next 12 months. It’s not just how the tariff issues are resolved, but with which countries the U.S. is able to strike trade deals.

“What happens with trade/tariffs is likely the biggest factor now and over the next 12 months across all of agriculture. I’ve made this statement in the past, but it continues to be the biggest wild card that could boost or harm the ag sector. Another factor I’m watching in the short term is crop size,” said one economist.

When asked to outline the two most important factors that could impact the ag economy over the next 12 months, economists varied in their responses, but said:

Trade negotiations
Government payments and farm safety net programs
Crop prices versus production costs
Strength in livestock markets
Biofuel policies
Interest Rates

Economists say provisions within the One Big Beautiful Bill are also important to agriculture over the next 12 months.

“The two most significant drivers are the recently passed Big Beautiful Bill that will spend about $50 billion on commodity programs over the next 10 years, as well as recently announced trade deals,” said an economist in the anonymous survey. “Increased reference prices in the BBB will help support farm income, and it appears the administration is making a point of securing deals for ag as part of the trade pacts being negotiated. These both bode well for agriculture.”

59% of Ag Economists Think Congress Won’t Pass a New Farm Bill Until 2026

Thu, 08 May 2025 22:29:32 GMT

It’s a contentious battle continuing to play out in Congress. Two years overdue, Congress still hasn’t passed a new farm bill, and as the calendar approaches the half-way point of 2025, optimism of passing a farm bill this year is waning.

The April Ag Economists’ Monthly Monitor found most agricultural economists think it could be 2026 before we see Congress finally pass a new bill. One reason why, according to agricultural economists, is the fact Congress passed $10 billion in financial relief payments late last year.

The April Monthly Monitor asked the nearly 70 ag economists surveyed each month when they think Congress will pass a new farm bill:

59% said 2026
24% think it won’t happen until 2027
18% said the second half of 2025.

April Ag Economists’ Monthly Montior

(Lindsey Pound)

None of the economists think Congress will pass a new farm bill in the first half of 2025. The survey also asked economists, “Does the Emergency Commodity Assistance Program (ECAP) program make it more difficult for Congress to pass a new farm bill this year?

62% said yes
38% responded no.

Most major agricultural groups argue that the current farm bill is outdated. Passed in 2018, it was designed to cover five years. Congress has passed an extension for two straight years that’s helped agriculture limp along, but another extension might not suffice in addressing the current financial pain being felt on the farm, especially for cotton and rice farmers.

Other Hurdles for Passing a Farm Bill in 2025

Even with the GOP in control of the House and Senate, it’s no secret one of the main obstacles in passing a new farm bill, or any bill in Washington, is the budget.

The April Ag Economists’ Monthly Monitor asked economists what are the biggest hurdles in passing a new farm bill, the top response was budget. But economists also say Congress is racing against a calendar, and deeper cuts to SNAP could end up hurting agriculture priorities in the end. One economist even argued ARC and PLC just aren’t effective programs.

“The farm bill just isn’t as important to the administration as is getting their policy agenda through Congress,” said one economist.
“The budget. If farm legislation is approved in 2025, it will likely be part of the budget reconciliation bill and passed without Democratic support, meaning increased support for farmers is provided by deeper cuts in SNAP. Only if that effort collapses is there any real possibility of a bipartisan farm bill,” said another economist in the anonymous survey.
“In general, Congress has difficulty passing any legislation. This is very detrimental to the long-run health of U.S. agriculture and the U.S. economy. We simply have to address entitlements and deficit spending in the next few years.”
“If the new farm bill has to have no new spending similar to the 2018 farm bill, then which title wins and which title loses is the biggest fight,” an economist said in the April survey.
“They have to be working on a bill first. Currently, I do not think a bill is even in the works,” said another economist.
“Pushing back on SNAP,” stated an economist.

Bottom line: The likelihood of passing a farm bill this year is low. Both the Senate and House Committees say it’s a top priority and are working behind the scenes to get a farm bill passed this year, but similar bottlenecks remain, which are a lack of additional funding and a polarized Congress. Debates were heated this week, and the blame game continues. Until Congress can find a way to compromise on Title I and SNAP, the stalemate could continue.

Concerns About a Recession in Agriculture

The farm economy doesn’t seem to be improving. The latest Ag Economists’ Monthly Monitor shows agricultural economists are also growing more pessimistic about the ag economy. The April survey found 72% of ag economists say the row crop side of agriculture is in a recession, up from 62% last month. Eighty-two percent of economists also think this could force more consolidation in agriculture.

What's the Bigger Question: Can the U.S. Reduce its Reliance on China or Can China Survive Without the U.S.?

Mon, 05 May 2025 13:33:39 GMT

Agricultural exports to China have shuttered since this tariff tit-for-tat started in April, and as the reality of the Trade War 2.0 plays out, the latest Ag Economists’ Monthly Monitor uncovered the potential impact, both positive and negative.

Tariffs from both countries are high, but when it comes to agriculture, tariffs U.S. cotton are as high as 140%. The tariffs are 172% on U.S. pork and pork variety meat and over 150% on soybeans. There’s talk China is already hurting from the trade war and “quietly” exempting nearly 25% of all U.S. imports from tariffs, but no details have officially been released.

Until then, the trade war continues, and the bigger question now is if the U.S. can reduce its reliance on China.

83% of economists think it can
76% say the U.S. can function without imports from China

The 83% of economists who think the U.S. can reduce its reliance on China say:

“There’s always the opportunity to reduce reliance on another nation, but it will take time and could be painful.”
“By virtue of tariffs so high, the U.S. farmer has no choice.”
“We can probably reduce our reliance, but we will be worse off.”
“Ignoring comparative advantage is inefficient, and the U.S. should look to expand markets elsewhere in Southeast Asia.”

For the other 17% of economists who don’t think the U.S. can cut back on China, the reasons were pointed:

“China is such a significant buyer that the loss of China as a key importer just cannot be replaced by other markets in the near term.”
“Any reduction in reliance will be small. That train has left the station.”

One area where U.S. ag relies heavily on China is for ingredients used in herbicides and other chemistries in the U.S.

“There are too many inputs imported from China to effectively replace them all, even in the long run. The strategy of reducing reliance on Chinese imports is misguided,” one economist said.

Potential for High Rewards

The stakes are high, but the upside potential of a trade deal with China could be monumental. Sixty-one percent of ag economists think China and the U.S. will reach an agreement to revisit the Phase One trade agreement.

April Ag Economists’ Monthly Monitor

(Lindsey Pound)

That deal, which was struck by the previous Trump administration, committed China to purchase an additional $200 billion in U.S. ag products over the next two years.

China didn’t complete the promised purchases after Trump lost the election, but made massive corn buys in 2020, including the biggest single-day U.S. corn purchase on record in July 2020.

April Ag Economists’ Monthly Monitor

(Lindsey Pound)

Since then, Brazil has gained ground and displaced the U.S. as the top corn exporter in 2023. Economists believe it won’t be the U.S. benefiting from this trade turbulence, but instead these competitors:

Brazil (76% of responses)
China (12% of responses)
India (6% of responses)
Ukraine (6% of responses)

None of the economists said the U.S.

Which Commodity Gains the Most?

As some economists say nobody wins in a trade war, others say some areas can benefit:

“All sectors if we can get a trade agreement that forces China to buy.”
“Specialty crop producers who may be insulated from competition from Latin America in the domestic market.”
“In the longer run, the trade war could be beneficial to livestock producers if gains can be made with increased access to European markets and even Australia.”
“Biofuels are an area with ground to gain.”
“Cotton, as that sector has seen a significant negative influence of global trade shifts.”

Economists were also asked what the best way for the ag economy to counter the long-term tariff effects is:

Negotiate tariff rates down around the globe (47% of responses)
Build domestic demand for U.S. ag products (32% of responses)

In terms of how long it would take to restore American manufacturing, 47% responded never, 29% said 10 years and 24% said at least five years.

Bottom line: The risks are high. Unless the U.S. invests in domestic manufacturing over an extended period, the loss from exports could be a big hit to ag commodities. But if the Trump administration can gain more trade access to key countries, the rewards could be even bigger.

Your Next Reads:

Economists Fear Trade War Will Push Agriculture Deeper Into a Recession

Panic Slowly: China’s Cancellation of 12,000 Tons of U.S. Pork Sends Loud Message

Economists Fear Trade War Will Push Agriculture Deeper Into a Recession

Fri, 02 May 2025 17:19:11 GMT

Agricultural economists are growing even more pessimistic as the latest Ag Economists’ Monthly Monitor shows the majority are concerned President Donald Trump’s tough stance on trade could push agriculture deeper into a recession while also giving Brazil more of a competitive edge. As one economist stated, the stakes are high, and the key is whether Trump’s policies push ag deeper into a recession, and if U.S. agriculture can survive without China.

The Ag Economists’ Monthly Monitor is a survey of nearly 70 agriculture economists nationwide. This month, 72% of those surveyed say the row crop side of agriculture is in a recession, up from 62% last month. Eighty-two percent of economists also think this could force more consolidation in agriculture.

Despite Trump’s 90-day pause on tariffs for most countries except China, economists stress agriculture is in peak uncertainty.

Of the 72% who think agriculture is in a recession, their reasons are:

Compressed margins and concern about operating debt carried over from last year.
Prices for most crops have declined more than production expenses since 2022.
Negative returns for at least the third consecutive year across nearly all row crops.

Yet, the 28% who believe the crops side of agriculture isn’t in a recession say:

“Profit opportunities are there, but slim.”
“Economic performance and growth of U.S. ag is slowing and/or stable but not declining. It’s too early for the impacts of tariffs to change ag business decision-making.”
“Given the volatility in the crop session, a recession requires at least two bad return years, where returns include both private market and government payments. We do not know about 2025 yet, nor do we know the extent of government payments for 2024 crops yet and thus what will be the total return for 2024.”

Economic Drivers

In the survey, 42% of economists said the current state of the ag economy is “somewhat worse” than a month ago, while 26% said it’s unchanged. But when you compare outlooks to a year ago, 58% of economists responded the ag economy is somewhat worse.

Ag Economists’ Monthly Monitor

(Lindsey Pound )

Economists were asked to list the two most important factors driving agriculture’s economic health today, as well as in 12 months. Tariffs and trade war topped the list.
“Weather will always be one of the primary factors, but we can add President Trump’s efforts to restructure global trade to that list this year. We’re in worse shape if he fails and better shape if he succeeds. Big stakes,” one economist said.

In addition to tariffs and the trade war, economists also said:

Inflation
Interest rates
Political uncertainty
Consumer demand
Status of trade issues and the supply-side (crop size) of the balance sheets.
The inability of farmers to manage price volatility due to uncertainty around trade

High Stakes with Trade

Agriculture is an export dependent business. According to the Trump administration, when it comes to tariffs and the impact on the overall economy, long-term gain will be worth the short-term pain. However, when it comes to agriculture, the economists surveyed don’t agree.

When ag economists were asked if they think Trump’s strategy of using tariffs as a negotiating tool will benefit U.S. agriculture in the long run:

76% responded no
24% responded yes

April Ag Economists’ Monthly Monitor

(Lindsey Pound)

Since the last trade war, Brazil has gained ground and displaced the U.S. as the top corn exporter in 2023. Economists believe it won’t be the U.S. benefiting from this trade turbulence, but instead these competitors:

Brazil (76% of responses)
China (12% of responses)
India (6% of responses)
Ukraine (6% of responses)

Will Farmers Be Compensated for Short-Term Pain?

As Web reported, Agriculture Secretary Brooke Rollins has stated since winter that if farmers suffer financial pain from the trade war, the Trump administration will look at compensating farmers at some point.

April Ag Economists’ Monthly Monitor

(Lindsey Pound)

Of the economists surveyed, 89% think USDA will compensate farmers with financial payments, similar to what the previous Trump administration did with the Market Facilitation Program Payments (MFP). However, 80% of economists say it’s too early for USDA to be considering compensating farmers for financial fallout.

Bottom line:

The risks are high. Unless the U.S. invests in domestic manufacturing over an extended period, the loss from exports could be a big hit to ag commodities. But if the Trump administration can gain more trade access to key countries, the rewards could be even bigger.

Your Next Read:

92% of Ag Economists Say the U.S. is Already in the Middle of Another Trade War

New Warning Signs Agriculture Is In A Recession

Thu, 27 Mar 2025 21:43:08 GMT

ADM and Syngenta are just two of the latest companies to announce layoffs in the agriculture sector. They join a long list of equipment manufacturers, seed and chemical companies and other agribusinesses who are restructuring and laying off employees to weather the current challenges in the ag economy. These are just the latest signs of a glaring reality: the U.S. ag economy is in a recession.

According to Farm Journal’s March Ag Economists’ Monthly Monitor, 62% of ag economists think the row crop side of agriculture is already in a recession. The survey of nearly 70 ag economists from across the country has been tracking the concerns of a recession for months, and as consolidation consumes agriculture, it’s a reminder of the fallout that comes with a downturn.

“Low cotton and wheat prices are a real disaster,” said one economist in the anonymous survey. “Corn and soybean prices continue to move around with some increases ahead of planting lately but they are not at great levels.”
“A recession is a sustained period of economic decline. We may not be able to say the entire agriculture sector is in recession, but the row crop sector has been in economic decline since 2022 and looks like that will continue into 2025,” another economist responded.
“Costs have outpaced revenue for some time now, and recent policy shifts are unlikely to alleviate that pressure,” one economist responded.

Recession concerns in agriculture

(Lindsey Pound )

One economist pointed out net returns are as tight as they have been since 2007, but even then, there are still 38% of economists who don’t think the row crop side of agriculture is in a recession.

“There are folks struggling for sure; however, this is part of the ebbs and flows of commodity agriculture. The difference this time is there was not as much liquidity saved during the good years to assist in the bad years. Therefore people are having to pull back,” one economist said. “ I don’t think the crop sector is in a recession because producer continue to be the dominant buyer of land and crop acreage estimates do not currently anticipate the American producer is going to drastically pull back on planting a crop. If we were in a recession, we would see declining land prices and people would be pulling back on production; neither is happening.”

Growing Concerns Among Ag Lenders
Eroding balance sheets are a concern echoed by agriculture economists, as well as ag lenders across the U.S.

“The end of the year last year was rough, but looking at projected cash flows for ‘25, we see that looking even worse,” Alex McCabe, agribusiness loan officer for CUSB Bank based in Iowa told “U.S. Farm Report.” “It’s unrealized, of course, but definitely looks like it could be a challenge.”

“Most have held together, but working capital has taken a hit,” says Tim Homan, relationship manager for Rabobank. “You’re a lot more confident in your balance sheet when you have good working capital with whatever comes along. It gets a little more nerve racking once that safety net on your balance sheet falls off.”

Concerns About More Consolidation Ahead

Consolidation concerns

(March Ag Economists’ Monthly Monitor )

With the majority of agriculture saying agriculture is currently in a recession, it lends itself to another tough reality: consolidation could continue. Eighty-five percent of economists who responded to the March Ag Economists’ Monthly Monitor said they think the current situation will accelerate consolidation not only on farms but also agribusinesses.

“Farmers who rent land, and some who own land, are not able to generate enough revenue to cover loan obligations and have to liquidate. Those who own land will likely be the ones to weather the economic downturn we are in,” one economist said.
“A sustained period of high costs and low prices will likely result in some farmers going out of business sooner than expected, which may be due to point of financial need or stopping by choice ahead of that. When farm consolidation is accelerated, there are fewer farmers buying inputs. Even those the acres are the same, fewer input retailers are needed to serve the customer base. Also, have greater pressure on the whole industry as big farmers grow,” another economist responded in the anonymous survey.
“Higher cost producers may be leaving the industry because they have to, not because they choose to,” one economist said.
“The agricultural industry has long valued hard work as a fundamental principle of it’s demographic makeup. For a while, government programs and loosening credit conditions have allowed people to receive more for less work. That is changing. I continue to hear conversations with ag service providers that they are focusing on those producers that are willing to put in the business planning themselves and not expecting someone else to do it for them. The process consolidates the sector by removing those that are inefficient and unwilling to do the work,” said another economist.

Another economist in the Ag Economist Monthly Monitor pointed out that when you look out there at available credit, the situation seems okay, but there are some reports out there of lenders having to deny loans.

“I don’t believe it’s widespread, at least not in my area,” said Homan, who is an ag lender in central and northeast Iowa. “There are probably certain areas that have been hit harder by weather and harder by price than what we have.”

No New Farm Bill as a Backstop
Those areas that are particularly struggling are the ones that rely heavily on rice and cotton, and without a farm bill, farmers in the south are worried the financial pain will accelerate in 2025.

Farm Bill timing

(Lindsey Pound )

The March Ag Economists’ Monthly Monitor also asked economists when they think Congress will pass a new farm bill. While just over one-third of economists think there’s still a chance to get a farm bill during the second half of 2025, 42% now say it could be 2027 before Congress passes a new farm bill.

“It’s really tough,” one farmer located north of Lubbock, Texas told Farm Journal. “Honestly, if I could get 50¢ on the dollar, I would sell out today. I’ve never been more disappointed. It’s not just commodity prices, but the fact we don’t have a farm bill that has been a real backstop for so long. We have used insurance way too much, and it’s just not sustainable anymore.”

Your Next Read:
92% of Ag Economists Say the U.S. is Already in the Middle of Another Trade War

Poll Results: More Than Half of Farmers Say They Don’t Support Trump’s Use of Tariffs

Mon, 24 Mar 2025 18:38:29 GMT

President Donald Trump has been clear since the campaign trail: Tariffs are a tool he would use aggressively during his presidency, and that’s exactly what the president is doing as tariffs have become a bit of a trademark during Trump 2.0 and the first 100 days.

As he prepares to impose more tariffs on April 2, Trump said Monday that he will impose tariffs of 25% on any nation that purchases oil from Venezuela.

“Venezuela has been very hostile to the United States and the freedoms which we espouse. Therefore, any country that purchases oil and/or gas from Venezuela will be forced to pay a tariff of 25% to the United States on any trade they do with our country,” Trump said in a post on Truth Social.

As both targeted and blanket tariffs are applied, retaliatory tariffs on U.S. agriculture are also caught in the middle of the latest trade war. How do farmers feel about this? That’s exactly what we wanted to uncover during the latest AgWeb poll.

The latest AgWeb poll asked, “Do you support President Donald Trump’s use of tariffs as a negotiation strategy?” And even though the majority of farmers say they don’t support Trump’s use of tariffs, according to the recent AgWeb poll, it wasn’t on overwhelming majority.

(AgWeb Poll)

Out of the nearly 3,000 farmers who responded,

54% responded “no”
41% responded “yes”

The poll then followed-up by asking, “Do you believe USDA will compensate farmers for losses if agriculture is affected by a trade war?”

The responses here were much more mixed.

36% responded “no”
34% said “yes”
30% responded they were “unsure”

What are farmers saying in the field? Michelle Jones, a fourth-generation farmer in south central Montana was asked the question about if she supports Trump’s use of tariffs on “AgriTalk” last week.

“No, definitely not,” Jones said. “I don’t think that tariffs are an effective negotiation strategy, and I also don’t think that we’re truly being surgical in how we are applying them.”

Jones says there are cases in history where tariffs are effective, but she says in the majority of those cases, the tariffs are extremely targeted and apply to a certain industry or specific country.

“They were also very short-term whereas now, we’re just using them as basically a blanket approach and then escalating when the president gets angry, and then he rolls them back, and it creates too much uncertainty. It’s just not wildly effective,” Jones also said on “AgriTalk.”

“I agree, they were used before the Phase One deal with China, and they were never dealt with under the Biden administration either,” added April Hemmes, an Iowa farmer, who was also on “AgriTalk” last week. “Now all we’ve done is piss off our neighbors with this, the Canadians, bringing Canada and Mexico into it. And now all consumers are going to have to pay up, not just the farmers.”

However, there are some farmers and those in agriculture who support the president’s heavy use of tariffs. One of those is Bubba Horwitz of Bubba Trading, who focuses on the commodity markets.

“I think it’s a great tool to use,” Horwitz said on “AgriTalk.” “I think you’ve seen it with Canada and Mexico to get things that he wanted to get done. And certainly, you can bargain with those tariffs, you can do whatever you want. I think it’s a great negotiating tool, and it certainly can put pressure because remember one thing, the United States of America could stand alone. We could be an island without anybody. We don’t need anybody else to survive, whereas other countries and nations do need us to survive. We could be totally an island and exist perfectly well without the help of any other country in the world.”

Secretary Rollins Defends Trump’s Use of Tariffs
During a recent interview with Fox News’ Maria Bartiromo, Agriculture Secretary Brooke Rollins defended the president’s use of tariffs, also saying he’s holding Canada accountable.

“This president’s vision of tariffs being such an important part of his toolkit, as he begins to realign the economy to put America first, to put our men and women, our families first. Everybody knows, and when they voted in November of 2024, they knew that’s what they were voting for. And so as we see the president begin to roll out, as we see him hold accountable Canada with their 250 % tariffs on our dairy products, as they see him hold accountable, Mexico, China, all these countries where we have a 5 % on our end when our products go out. They’ve got 15 %,so three times, this is on average on their end when their products come in. It’s not fair. And it’s got to be equalized as we move toward more free trade,” said Rollins.

Rollins pointed out the president has been very clear that there will be an interim period where the economy readjusts.

“Real transformation takes these harder decisions. And no one’s willing to do that, except now President Trump is,” Rollins said during the interview. “So obviously 100 % behind it, I am talking to farmers every single day. They know that the president has their back. They know and are prepared for potentially, you know, an interim period as we move toward what the president has said is the greatest age of prosperity not just for all Americans, But for our farmers in our ranchers as well.”

Ag Economists are Concerned About Tariffs and Impact Long Term
Farm Journal asked a similar question regarding using tariffs to negotiate in the March Ag Economists’ Monthly Monitor, and the survey found an overwhelming majority of economists are concerned about the impacts long term.

Ninety-two percent of economists think Trump’s strategy of using tariffs as a negotiating tool won’t benefit U.S. agriculture in the long run.

“Lost trade and lost reliability in a key sector for aggregate ag demand will hurt agriculture more than any specific market gains made from negotiations or reciprocal trade battles,” one economist said.
“Tariffs not only have a negative impact the short run, they also have negative impacts in the long run,” said an economist in the anonymous survey.
“Lost market share is extremely difficult to regain, especially when the U.S. becomes known as an unreliable market partner,” another economist noted.
“I responded yes, although I believe there are scenarios where this is harmful and scenarios where it could be beneficial,” said another economist. “For it to be beneficial depends on it being short lived and resulting in trade initiatives with market access or purchase commitments. And in the meantime, action is taken quickly related to President Trump’s post to offset trade loss with increased domestic use such as removing dated rules that limit ethanol blends, renewing or creating biofuels production incentives, and adding SAF as a mandated fuel.”

Market Facilitation Program 2.0?
If agriculture is caught in the middle of another trade war, the March Ag Economists’ Monthly Monitor wanted to know if economists think USDA will compensate farmers for their losses again, similar to what the previous Trump administration did with Market Facilitation Program (MFP) payments.

Even though Secretary of Agriculture Brooke Rollins has promised to make farmers whole through another trade war, economists are concerned about available funding.

Seventy-seven percent of economists think USDA will compensate farmers, but 23% don’t think so.

Here’s what economists in the March Ag Economists’ Monthly Monitor had to say.

“Congress might be the limiting factor,” one economist said.
“They will want to do so, but their ability to do so may be limited. The failure to include replenishment of the Commodity Credit Corporation’s borrowing authority in the continuing resolution limits available CCC funds, and other options may also be limited in potential scope,” another respondent shared.
“Yes, I expect more trade compensation because of the political sensitivity of ag and the administrative commitments already to doing so. I don’t know what and how much it might be, particularly if we are entering a new era of budget austerity or at least stated goals of budget restraint,” responded one economist.
“Depends on who is calling the shots Trump or Musk,” another economist noted. “Trump might want to because farmers voted for him. But will he spend the money? He probably would. But, who else are farmers going to vote for? Is Trump running again?”
“Tariffs are not good revenue creators — they are a poorly targeted tax on U.S. consumers. If the federal government believes it will raise revenue from these tariffs like it claims, it is hard for me to believe that they will turn around and give that limited revenue back to the people it impacted the most,” said an economist in the anonymous survey.

No matter what happens with the upcoming April 2 tariff deadline, economists agree that what happens with trade and tariffs will likely be the top factor that impacts agriculture over the next 12 months.

In a recent interview on “AgriTalk,” hear where Sen. Chuck Grassley, R-Iowa, stands on fair trade versus free trade.

92% of Ag Economists Say the U.S. is Already in the Middle of Another Trade War

Fri, 21 Mar 2025 14:47:55 GMT

President Donald Trump hasn’t been shy about using tariffs as a negotiating tool. As he cracks down on fentanyl and illegal border crossings, he’s also pushing to restore what he calls fairness in U.S. trade relationships and countering non-reciprocal trading arrangements.

The reality for agriculture is the U.S. agricultural trade deficit hit a record in 2024 as imports soared, and Trump says he wants to reverse the trend.

According to the Trump administration, when it comes to tariffs and the impact on the overall economy, long-term gain will be worth the short-term pain. However, when it comes to agriculture, ag economists survyed in the March Ag Economists’ Monthly Monitor don’t agree.

Ninety-two percent of economists think Trump’s strategy of using tariffs as a negotiating tool won’t benefit U.S. agriculture in the long run.

Here are some of those economists’ comments from the most recent Farm Journal Ag Economists’ Monthly Monitor survey.

“Food as a weapon doesn’t have a successful track record, see Jimmy Carter and the 1980s,” responded one economist in the anonymous survey. “It’s not a guarantee as it’s like playing Russian roulette; you might ‘win,’ but the risks are huge.”
“Farm Journal readers should learn about the long-term consequences of Smoot-Hawley. It wasn’t just about the economic costs — it was also about the relational damage between trading partners. I have a hard time believing we will rebuild these relationships any time in the foreseeable future,” another economist said.
“It depends on whether tariffs are used as a negotiating tool with the ultimate goal of reducing trade barriers, or whether they instead result in a world with higher barriers. The president’s emphasis on tariffs as a way to raise revenue suggests tariffs and their consequences may persist,” was another economist’s response in the Monthly Monitor.

However, one economist wasn’t as certain, saying, “For it to be beneficial depends on it being short lived and resulting in trade initiatives with market access or purchase commitments. And in the meantime, action is taken quickly related to Trump’s post to offset trade loss with increased domestic use such as removing dated rules that limit ethanol blends, renewing or creating biofuels production incentives, and adding SAF as a mandated fuel.”

Trade War or No Trade War?
What an overwhelming number of agricultural economists do agree on is that the U.S. is in the midst of another trade war. Ninety-two percent of economists say a trade war is already here, while only 8% responded no.

“I don’t think anyone is arguing with the notion that we are in another ‘trade war,’” one economist said. “This one is far bigger and far more consequential than the last one we were in.”

“It seems more like a trade cold war,” another economist responded. “The situation is ever-changing, and it is hard for buyers, markets and producers to anticipate reality and effect. The threat of tariffs is almost as effective as a tariff.”

As agriculture tries to navigate the turbulence and shocks of another trade war, the ultimate question is: Who wins in a trade war? According to Romel Mostafa, professor of business, economics and public policy for the Ivey Business School in London, Ontario, it’s neither the U.S. or Canada.

“If we think about U.S. and Canada, we both lose,” Mostafa says. “The way our markets are integrated, both from the input side as well as the product side, any tariff really increases cost of production for our farmers all the way to food on the table. What then happens, essentially, some of our products are going to be less competitive in major markets than where we compete. Who then benefits? Perhaps Brazil, Russia or other countries.”

Other agricultural economists agree: If you’re looking at the trade war between the U.S. and Canada or the U.S. and China, it’s not the U.S. who wins, it’s ultimately one of the United States’ biggest competitors: Brazil.

The Ag Economists’ Monthly Monitor asked, “In the next 10 years, which country ultimately benefits the most from the current trade turbulence?” Seventy-three percent of economists think it’s Brazil, and 18% said China.

This Trade War Could Be Worse Than the Last time
Of the agricultural economists surveyed, 69% say they don’t think a trade war today would have the same impact it did 2018 through 2020. Instead, most think it will be worse.

“The trade war in 2018/19 also had the African swine fever in China. Because of ASF, they did not need the soybeans anyway. It will be hard to figure out what impacted the U.S. markets/prices more, but the market reaction should not be as great this time,” said one economist in the monthly survey.

Ag Econoimsts’ Monthly Monitor

(Lindsey Pound)

“It would be a bigger impact,” another economist said. “The first round of trade wars in agriculture were largely used as a wedge for negotiation or renegotiation of agreements that provided improved access and growth opportunities for ag trade. This round seems to be championed based on reshaping the entire trading system, a system that U.S. agriculture largely benefited from over time.”

“There appears to be less willingness by the U.S. taxpayer to provide financial assistance to agricultural producers. That is not to say that financial assistance is absent this go around, but I do believe it increases the uncomfortable situation for producers who largely support less government spending,” one of the respondents shared.

However, other economists think it could have a similar impact, saying the same commodities will be impacted.

Even talk of tariffs is enough to move the markets, as some analysts argue the commodity markets have been ignoring fundamentals, instead trading headlines recently.

The Potential Economic Hit to Ag
The American Farm Bureau (AFBF) economists recently took a deeper dive into the possible impact of reciprocal tariffs. AFBF economists say of the top 20 U.S. agricultural products currently being targeted by Canada, for a total of $5.8 billion, commodities such as juice, coffee and chocolate are hardest hit, along with wine, fresh fruit, dairy products, poultry and rice.

Canada’s retaliatory tariffs

(AFBF)

China’s retaliatory tariffs

(AFBF )

When it comes to China, Beijing has specifically targeted 15 products including beef, cotton, grain sorghum, pork, corn and dairy along with fresh fruit. Economists say while it’s too early to measure the full impact of the tariffs on U.S. agriculture, they believe it will certainly decrease demand for U.S. products in Canada and China.

Market Facilitation Program 2.0?
If agriculture is caught in the middle of another trade war, the March Ag Economists’ Monthly Monitor wanted to know if economists think USDA will compensate farmers for their losses again, similar to what the previous Trump administration did with Market Facilitation Program (MFP) payments.

March Ag Economists’ Monthly Monitor

(Lindsey Pound)

Even though Secretary of Agriculture Brooke Rollins has promised to make farmers whole through another trade war, economists are concerned about available funding. Seventy-seven percent of economists think USDA will compensate farmers, but 23% don’t think so.

“Congress might be the limiting factor,” one economist said.

“They will want to do so, but their ability to do so may be limited. The failure to include replenishment of the Commodity Credit Corporation’s borrowing authority in the continuing resolution limits available CCC funds, and other options may also be limited in potential scope,” another respondent shared.

“The political dynamics appear to be similar,” said another economist. “Amounts are however likely to be less, maybe substantially less, due to the general policy initiative to reduce government spending.”

The Secretary of Agriculture has come out and said they will use these tools if it becomes necessary.

When is USDA Going to Release the Nearly $10 Billion of American Relief Act Payments for Farmers?

Mon, 24 Feb 2025 18:29:09 GMT

It’s been just over two months since Congress passed the American Relief Act , which contains $9.8 billion in market relief payments. Congress gave USDA 90 days to issue the payments, and with less than 30 days left before the deadline, farmers are asking one question: when will those payments be released?

That’s exactly what AgriTalk’s Chip Flory asked U.S. Agriculture Secretary Brooke Rollins in an exclusive interview during Top Producer Summit last week. Rollins told Flory it’s her second top priority, right after addressing the avian flu outbreak.

“It’s got to move quickly. And now that I’m there, other than avian flu, that’s probably when I walk out of here, I’ll jump on the phone and we’ll start figuring out again why that isn’t moving more quickly and what we need to do,” Rollins told Flory. “But as you can imagine, I just got confirmed a couple of days ago. We have eight undersecretaries at USDA, and one that manages this portfolio. He hasn’t even had his hearing yet. So, we’re doing a little bit of band-aiding and duct-taping and bubble-gumming this thing together. But please know, and all of your listeners and those watching on TV should know, that this is of the highest priority. We have the best team in place, and we are going to move as quickly as humanly possible.”

Possible Payments to Producers
The economic aid for farmers was passed by Congress as part of the continuing resolution in December 2024, keeping the government funded through March 14, 2025. The “Economic Loss Assistance Program” earmarked $10 billion in direct payments for farmers.

USDA will make the final calculations, meaning the following, current calculations will likely change. But based off Farm CPA Paul Neiffer ‘s early estimates, per-acre producer payments will be the following:

Corn: $43.80
Soybeans: $30.61
Wheat: $31.80
Cotton: $84.70
Rice: $71.37

While USDA will determine the finalized per acre payments, these are the estimated American Relief Act payments for farmers.

(Lindsey Pound )

According to analysis by the Food and Agricultural Policy Research Institute (FAPRI), the top 10 states based on estimated total payments for corn, soybeans, wheat, cotton, sorghum, rice, barely, oats and peanuts are:

Texas: $963 million, primarily because of its status as the largest cotton producer
Iowa: $846 million, with strong support for corn and soybean farmers
Illinois: $790 million
Kansas: $787 million
Nebraska: $625 million
Minnesota: $616 million
North Dakota: $597 million
South Dakota: $497 million
Indiana: $400 million
Missouri: $391 million

Approximately $9.7 billion will be paid out for the major nine crops.

(FAPRI/RaFF)

Corn, soybeans and wheat are expected to make up 80% of the total estimated payments, or about $7.9 billion. That number increases to 98%, or about $9.7 billion, when including cotton, rice, sorghum, barley, oats and peanuts.

Earlier in February, USDA issued its first look at 2025 net farm income, showing a surge in net farm income for this year. That’s not because of a dramatic change in the markets. The surge is from an expected staggering 345% increase in government payments — from $9.3 billion in 2024 to $42.4 billion in 2025. That not only includes the nearly $10 billion from the American Relief Act, but the also $21 billion in disaster aid, which USDA still needs to disperse.

What’s at Stake for Farmers?
Ben Brown, an agricultural economist with the University of Missouri, says some producers are banking on those payments, even making business decisions based on the projected payment calculations released so far.

“It’s been interesting to go around and talk to producers about it. I think, broadly, there are questions about when it’s coming, making sure that it is coming. People have made decisions, business decisions, both at the farm gate level and then at the agribusiness sector, depending on these payments. So, if they had any challenges in implementing those or if they were strongly delayed, I think we would see some ripple effects.”

Brown also points out in conversations he’s having with farmers and ag lenders across the country, the reactions are mixed about the payments and the impact they could have on costs in 2025.

“The other challenge is that you look at the $40-plus per acre on corn and, the common phrase I’m hearing from producers is that there’s six different people out there asking for $10. And you’re sitting there saying, ‘well, that’s $60,’ and I’m really getting $43 or $42 an acre for my corn production. So, how does that compute? I think, as we sit here today, this might increase input prices or keep them a little higher than where we maybe would have anticipated them. That’s one of the challenges. But certainly, there’s a lot to learn as this gets implemented across the countryside.”

Anticipated Payments Fuel Improved Net Farm Income Picture
In an exclusive interview with USDA Chief Economist Seth Meyer, we asked Meyer to explain USDA’s updated net farm income forecast, which some argue paints the ag economy more positively than it actually is.

“We use the policy in place, and we look at what the administration has said and their desire to get these payments out,” says Meyer. “So, while we don’t know exactly what the payments will look like, if you dig into some of the geographic maps within what we produce, you will see we are having to make assumptions about where all those dollars will go. But we’ve made our best guess and we’ve asserted that they’re determined to get these dollars out the door. And so we put them into the farm income number.”

Meyer says as he talks to farmers across the country, he understands farmers don’t want to get their income from government payments; they prefer to get it from the markets. But he also points out the crops net farm income scenario and the picture for livestock are drastically different, but there are some exceptions.

“When you look at the net farm income numbers, and you take those government payments away, and you say, ‘What’s coming from the market?’ And then you take livestock and you separate out crops ... with crops today, we have increased competition around the world. We’ve got tighter margins, input prices that are sticky, challenges in exports because we sell bulk commodities and there’s where we’re facing competition. On the livestock side, you say, ‘Well, you know, the livestock side must be doing well.’ But at the same time, we’re short on dairy heifers to expand. We continue to be in a contraction phase of the cattle cycle. And yes, we’ve got record-high feeder and fed cattle prices, but we haven’t turned yet. Folks are not making the decision yet that this is something that they want to invest in in the long run.”

Meyer also points out the egg side of the equation is presenting another layer of challenges. He says if a producer hasn’t been hit by avian flu, they are making money. But for the producers who’s had their flocks infected by HPAI, that’s creating a financial strain.

“So, on the crops side, we are seeing narrow margins,” says Meyer. “The livestock side is better, but some constraints are continuing to expand there.”

Ag Economists Weigh In On Impact of Projected Payments
The January Monthly Monitor asked economists if those payments are needed in agriculture. Sixty-four percent said yes, and 36% said no.

In the survey, of the economists who said the payments are needed, some of the reasons why include:

Land values continue to climb
Input costs will remain elevated, and inefficient farmers that over-leveraged themselves the past couple years will remain in business
Delays producers cutting fixed costs, especially cash rents

But not all economists agree the payments are needed, warning of some unintended consequences, including prolonging what some economists argue are adjustments needed in the industry. In the survey, economists said:

“I think there could be some pushback when the longer-term farm bill comes up for authorization with budget hawks pointing to the $10 billion as a down payment of sorts.”
“This will slow some adjustments that arguably are needed. For example, land rents are generally higher than can be justified by current market returns. Getting approval for another round of payments in 2025 is far from certain, so unless markets improve considerably, there could be a renewed financial squeeze in 2026.”

Ahead of Congress passing the Continuing Resolution (CR) in late December, AgWeb asked farmers in a poll whether Congress should pass economic aid for farmers before year-end, as well as if Congress should raise reference prices in a farm bill extension. The poll garnered more than 2,500 responses:

71% of respondents said Congress should approve emergency economic aid
29% responded no
81% of farmers said Congress should raise reference prices when extending the 2018 farm bill.
19% said no.

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10 Charts to Explain What's Shaping the Ag Economy to Start 2025

Fri, 07 Feb 2025 21:07:34 GMT

Last year’s initial net farm income forecast showed the two largest consecutive declines in net farm income history, the picture seems to be improving in 2025.

According to USDA’s Economic Research Service, the first net farm income forecast of the year shows net farm income is expected to reach $180.1 billion, up $41 billion from 2024, while net cash farm income is projected to hit $193.7 billion, a $34.5 billion increase. A staggering 34.5% increase in government payments, from $9.3 billion in 2024 to $42.4 billion in 2025, is the key factor behind the income boost.

Yet, when you look at the specifics, economists continue to be more bullish when it comes to livestock, specifically cattle.

Farm Journal’s January Ag Economists’ Monthly Monitor

(Lindsey Pound)

According to economists in the January Ag Economists’ Monthly Monitor survey, shrinking supplies and strong demand are the two major drivers of the historic run in cattle prices. And that’s why out of the 10 major commodities, economists are most bullish on cattle in 2025.

Recession in Row Crops?

Even with the expectation for improved net farm income, with a 34% increase in expected government payments, ag economists are still concerned about the current state of the ag economy for the row crop sector. Sixty-four percent of economists say the row crop side of agriculture is currently in a recession, 36% say it’s not.

Farm Journal’s January Ag Economists’ Monthly Monitor

(Lindsey Pound)

“A modest recovery in prices for some major crops has slightly improved the current state of the farm economy, and the outlook has brightened somewhat as well,” said one economist in the anonymous Monthly Monitor survey. “The prospect of economic assistance and disaster payments also improves the farm income outlook in 2025.”

“For row crop profitability, corn and soybean prices have seen some improvement recently offering some decent pricing opportunities, but some farmers may not have any old crop to sell now to take advantage of improved prices,” said another economist. “Without additional price improvement, there is still poor profitability outlook for new crop. But when you look at demand opportunities, there are a lot of unknowns about the future demand for trade and biofuels in the Trump administration. It could be positive or negative and will likely be impactful over the next 12 months.”

Those who argue agriculture is not in a recession, say it’s because:

$31 billion in direct payments and disaster aid passed by Congress in December.
The fact strong land values and rents have slowed their increases yet have not seen any significant declines

“We are not in a recession when farmers were still paying off pre-bought 2025 input expenses in 2024 to minimize 2024 tax bills, nor when land values and cash rents are holding as well as they are. There are producers that are over extended and all crop producers are making adjustments, but these are the ebbs and flows that the agricultural industry has managed for decades,” one economist said. “The expectations are changing to expect downside risk, and so people aren’t planning for the downside, and those that do are being penalized.”

Consolidation Concerns

Farm Journal’s January Ag Economists’ Monthly Monitor

(Lindsey Pound)

With concerns about a recession, the survey then asked economists if the current environment will accelerate consolidation, and an overwhelming number of economists, 86%, said yes.

Those economists who think it will force consolidation said:

“Probably mostly in the related industries as they try to consolidate to protect profit margins as producers maybe pull back on input choices or become much more price-conscious.”
“Farmers will think about exiting earlier, debt/income ratio”
“It’s only the most cost-efficient survive.”
“More people are exiting because they have little choice. Much consolidation would be happening even if the market situation were better.”
“Low margin producers will always be squeezed out by these type of times.”
“The ability of larger producers to spread costs over a larger number of acres.”
“Semi-retired farmers tend to call it quits during a down cycle. Farms that rent a substantial portion of their acreage find it increasingly difficult to sustain high cash rents.”

However, other economists argue the downturn hasn’t lasted long enough to force consolidation.

“If the current situation persists for several years, then yes. At this point, it’s too early and not severe enough,” one economist said.

The Main Factors Driving the Ag Economy

When asked to list the main factors driving the health of the ag economy right now, ag economists said:

Poor grain prices offset by improving livestock margins
Biofuel policies, tariffs, commodity prices
The potential for a trade war with China
South America’s crop
Ad hoc government payments
Improved grain ending stocks in the U.S.
Lower costs for fuel and interest

Trump’s Priorities and the Impact on Ag

The January Ag Economists’ Monthly Monitor released this week asked which of Trump’s priorities will have the most negative impact on agriculture. Seventy-nine percent said it’s trade and tariffs. Twenty-two percent said border security and deportation.

When asked which of the president’s priorities would have the most positive impact on agriculture, 54% of economists said cutting regulations, and 38% said tax changes.

January Ag Economists’ Monthy Monitor

(Lindsey Pound )

Tariffs on the U.S.'s top three trading partners could have a major impact on agriculture. The January Ag Economists’ Monthly Monitor asked economists which input is most at risk. The top answer was fertilizer.

“From a headline standpoint, it’s probably potash,” says Samuel Taylor, farm inputs analyst, Rabobank. “We get 85% to 90% of our potash from imports from the Canadian market. The residual is made up by Russia and Israel, in principle, with some other markets coming in.”

Ag Economists’ Monthly Monitor

(Lindsey Pound)

Direct Payments to Farmers

As USDA noted in its 2025 net farm income forecast this week, Congress included economic aid for farmers in the continuing resolution (CR) . The “Economic Loss Assistance Program” earmarked $10 billion in direct payments for farmers, which is expected to improve the net farm income picture this year.

Farmers are still waiting for the payments from USDA, but it’s been called a “cash infusion” into the farm sector.

January Ag Economists’ Monthly Montior

(Lindsey Pound )

The January Monthly Monitor asked economists if those payments were needed in agriculture. Sixty-four percent said yes, and 36% said no.

In the survey, of the economists who said the payments were needed, some of the reasons why include:

Land values continue to climb
Input costs will remain elevated and inefficient farmers that overleveraged themselves the past couple years will remain in business
Delays producers cutting fixed costs, especially cash rents

But not all economists agree the payments were needed, warning of some unintended consequences, including prolonging what some economists argue are adjustments needed in the industry. In the survey, economists said:

“I think there could be some pushback when the longer-term farm bill comes up for authorization with budget hawks pointing to the $10 billion as a down payment of sorts.”
“This will slow some adjustments that arguably are needed. For example, land rents are generally higher than can be justified by current market returns. Getting approval for another round of payments in 2025 is far from certain, so unless markets improve considerably, there could be a renewed financial squeeze in 2026.”

Future of the Farm Bill

Farm Journal’s January Ag Economists’ Monthly Monitor

(Lindsey Pound)

The Senate and House leadership for both Ag Committees have made clear they want to see a farm bill early this year. Fifty-seven percent of economists think it will be the second half of this year before Congress passes a new farm bill. Twenty-nine percent say 2026, and 14% of economists still think Congress will pass a new farm bill the first half of 2025.

45Z and Impact on Farmers

In the Biden administration’s final days in office, USDA finally released an interim rule establishes guidelines for quantifying, reporting and verifying the greenhouse gas (GHG) emissions associated with the production of biofuel feedstock commodity crops grown in the U.S.

The Treasury Department and Internal Revenue Service (IRS) also issued preliminary guidance on the 45Z tax credit in January, which was created by the 2022 Inflation Reduction Act (IRA/Climate Act), including the addition of sorghum as a crop that could qualify as a feedstock for a fuel that can claim the 45Z credit if certain climate smart agriculture (CSA) practices are followed.

The Treasury also released a notice that provides the emissions rate table for the 45Z credit.

Farm Journal’s January Ag Economists’ Monthly Monitor

(Lindsey Pound)

The January Monthly Monitor asked if the rule becomes final, when it could impact farmers and ethanol producers. Fifty-five percent said it could impact them as soon as the second half of this year.

Trump’s Key Cabinet Picks

Rollins and RJK Jr. in Farm Country

(Farm Journal )

The future of 45Z is now up to the Trump administration.

Late last month, Brooke Rollins, Trump’s nominee for Agriculture Secretary , powered through her confirmation hearing in front of the Senate Ag Committee . The Senate still needs to vote on her confirmation, but no timeline has been given on when that vote will happen yet.

Eighty percent of economists in the January Ag Economists’ Monthly say if confirmed, Rollins is a positive pick for U.S. agriculture.

“Rollins knows ag and has Trump’s ear,” said one economist.
“Her close connection the president and reasons outlined in the letter sent by 427 ag organizations and businesses on Jan. 15,” said another economist.

Twenty percent of economists say Rollins wouldn’t be positive for U.S. agriculture.

One economist said, “USDA focused heavily on under-served producers during the Vilsack era and my sense is that producers wanted the Secretary to come from a production ag view; whereas Rollins comes at it more from an overall domestic policy view. Also, I feel the administration isn’t helping her out with the Deputy Secretary nomination. Producers don’t see themselves in the upcoming USDA leadership.”

However, economists aren’t as confident that Robert F. Kennedy Jr., Trump’s pick to lead the Department of Health and Human Services, will be a positive for U.S. agriculture. Ninety percent of the economists surveyed said no.

One economist said, “His disrespect for science is troubling.” Another economist weighed in by saying, “His positions on crop protection will be an interesting storyline to watch early in 2025.”

However, not all economists think RFK Jr. would be bad for agriculture. In fact, one economist thinks he could actually restore confidence in agriculture.

“Improving health outcomes, even if over a longer time period, should improve the consumer opinion of agriculture and be a net gain overall,” one economist said in the anonymous survey.

Do Tariffs Work? Leading Ag Economists Weigh In

Mon, 03 Feb 2025 17:00:00 GMT

Tariffs are a tool used by President Donald Trump during both his terms. But do they work? Not even ag economists are in alignment, as the answer seems to be: It depends.

This past weekend, Trump signed three executive orders for tariffs , the first time a president has used powers granted under the International Emergency Economic Powers Act of 1977. The orders also include retaliation clauses that would ramp up tariffs if the countries respond in kind. Trump cut the levy on imports of Canadian energy to 10%.

By Monday morning, Trump had agreed to delay tariffs on goods from Mexico for one month to allow more time for negotiations. The agreement happened just hours before the tariffs were set to take effect.

President Claudia Sheinbaum said U.S. tariffs against Mexico will be delayed for one month after a conversation with Trump on Monday. Trump then confirmed the news on Truth Social.

Which Input Could Be Impacted Most by Tariffs?

Tariffs on the U.S.'s top three trading partners could have a major impact on agriculture. The January Ag Economists’ Monthly Monitor asked economists which input is most at risk. The top answer was fertilizer.

Ag Economists’ Monthly Monitor

(Lindsey Pound)

“From a headline standpoint, it’s probably potash,” says Samuel Taylor, farm inputs analyst, Rabobank. “We get 85% to 90% of our potash from imports from the Canadian market. The residual is made up by Russia and Israel, in principle, with some other markets coming in.”

One day after Trump announced he would move ahead with planned tariffs, Prime Minister Justin Trudeau stated tariffs targeting $30 billion in American products, such as alcohol, produce, household goods and industrial materials, will roll out in two phases starting Feb. 4, the same day the U.S. tariffs are set to begin.

The tariffs on the other $125 billion worth of goods will come in 21 days to allow impacted Canadian companies to adjust their supply chains. Trudeau emphasized Canada’s response would be “strong but appropriate,” while also considering non-tariff measures such as restrictions on critical minerals.

Do Tariffs Work?

With tariffs and a potential trade war brewing that begs the question: Do tariffs work?

It’s something Farm Journal asked the nearly 70 ag economists part of the Farm Journal Ag Economists’ Monthly Monitor. The survey asked economists: “Do tariffs work in trade policy?” Economists views were mixed:

“Tariffs can work in trade policy — that’s why nations continue to use them. The complex part that extends beyond the tariff action is potential long-term repercussions that can result from trade flow changes.”
“In limited cases, typically only if they result in a policy response in the targeted country. Much of the time, tariffs are like cutting off one’s nose to spite one’s face.”
“Tariffs provide short-term gains but have always failed relative to free trade in the long term.”
“Absolutely, when properly applied.”
“Not over the long term. They tend to affect who gets to supply different markets around the world.”

The Ag Economists’ Monthly Monitor also asked: “When tariffs are used as a ‘tool’ in trade, who pays the tariff?” Not all economists were aligned on that answer either, saying sometimes it’s farmers and consumers, but it can also be the exporting countries.

“When the U.S. imposes tariffs on imports, importers in the U.S. pay taxes to the U.S. government on their purchases from abroad. When another nation imposes tariffs, importers in that nation pay import taxes to their government on their purchases from abroad. Often, when a tariff is implemented, another nation retaliates, and you end up with importers in both nations paying the price on whatever products the tariffs apply toward.”
“If an importing country places a tariff on the exporting country, producers in the exporting country and consumers in the importing country both lose (i.e., receive lower and higher prices, respectively). Conversely, producers in the importing country and consumers in the exporting country win (i.e., receive higher and lower prices, respectively).”
“In the short run, consumers who purchase goods with a tariff might see higher prices if the tariff is not absorbed elsewhere. In the long run, the tariff might result in changes to the supply chain that result in higher prices but also create other economic opportunities in America (e.g. reshoring of domestic manufacturing).”
“The correct economist answer is: It depends. Tariffs drive a wedge between prices in the exporting country and in the importing country. It depends on the circumstances of particular markets and how much is reflected in higher prices in the importing country and reduced prices in the exporting country.”
“Both the exporting nation and the importing consumer pay some portion of the tariff depending on who has more flexibility to adjust to trade barrier. If exporting countries can easily switch to supplying other markets, they won’t have to ‘pay.’ If consumers can easily find cheap substitute goods, they won’t have to pay.”

10 Understated Things Economists Say Could Impact Agriculture in the New Year

Thu, 26 Dec 2024 16:29:46 GMT

This past year was definitely full of surprises, but there were also happenings in agriculture that economists warned about at the end of 2023.

The bleak outlook for commodity prices, along with elevated interest rates, created a downturn in the ag economy, which is something many economists warned would happen. It’s the speed of which margins crumbled that might have been the bigger surprise.

The latest Ag Economists’ Monthly Monitor asked economists if the U.S. was either in a recession or on the brink of one. The majority of ag economists say U.S. agriculture is ending the year in a recession.

56% of ag economists responded by saying agriculture is currently in a recession, which is up from the 53% who responded that way in October.
81% of economists surveyed said the U.S ag economy is on the brink of a recession, which is a significant jump from the 56% of economists who responded that way in the October survey.

One occurrence that wasn’t on anyone’s radar in 2023: H5N1. What was first thought to be a mystery illness impacting dairy herds in Texas was later confirmed as Highly Pathogenic Avian Flu, the first time the disease was detected in mammals.

At the end of 2024, what are economists watching in 2025? In Farm Journal’s latest Ag Economists’ Monthly Monitor, we asked economists: “What’s the one factor impacting the ag economy that’s not being talked about or covered by the media enough right now?”

From trade to deregulation plus numerous unknowns in a new administration, economists have no shortage of issues they’re watching in the new year.

Here’s What Economists Are Saying:

“The media seems consumed with the negatives of a Trump administration/Republican trifecta. It’s certainly good to be aware of the challenges with any political transition, but more forward thinking on what is positive, would be helpful: the outlook for taxes, biofuels policy, trade deals with agriculture included, deregulation all seem to be potential positives we could be talking about more.”
“Prospective tariff war is being downplayed, despite published research measuring expected range of damage.”
“Farmer attitudes toward alternative land use: CRP, solar and other forms to help diversify incomes.”
“Policy uncertainty is high right now. Will tariffs be imposed and if so, what will be the reaction of other countries? Will the new Administration take regulatory actions that favor or hurt the biofuel industry? What will be the outcome of debates over tax and budgetary policy? Will economic assistance to the farm sector be approved during the lame duck session or in early 2025? What about a new farm bill? Many people are making assumptions about how these questions will be answered, but we don’t know.”
“Farm income varies greatly by region. While we often focus on the Midwest and the financial health of that region, it is also important to notice that regions in the southern U.S. are really struggling.” It is also important to watch what production adjustments producers make to cope with today’s tighter operating margins?
“Could federal budget cuts/austerity dramatically change/reduce the federal farm income safety net?”
“Cash rent prices staying constant during a downturn in crop prices.”
“Let’s be clear — the clean fuels tax credit goes to the fuel producer, not the farmer. It enables market access into the biofuels market for the farm economy, but the ability for the farm economy to capitalize upon it is hamstrung by credit levels that have incentivized large inflows of foreign feedstocks at the expense of literally homegrown feedstocks like SBO.”
“The Brazil real is depreciating, which eventually leads to more U.S. competition.”
“China, Europe, Mexico and others know what to expect out of Trump. They’ve seen it before. Everyone is discounting the possibility that Trump’s tariff threat could result in some pre-emptive trade agreements that benefit us here in the states. The U.S. is the biggest buyer of consumer goods in the world. They can’t afford to cut us off. Note that I said consumer goods, not commodities.”

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