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2026 will be another rough year for farmers, marked by high production costs, lower farm income, escalating debt and an uncertain trade situation.
Net farm income will fall to $153.4 billion, down 0.7% from last year and 15.7% below the record highs seen in 2022. Cash receipts for crops and livestock will both decline, reflecting the downturn in commodity markets, which will be offset this year by more government assistance (up 45% from 2025). One exception: Cattle. Persistently high beef demand, coupled with the smallest cattle head count since 1961, will keep prices high.
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Meanwhile, production costs will reach a record $478 billion, with property taxes, fees and electricity expenses all set to increase. Feed, fuel, fertilizer and other fundamental agriculture inputs have retreated from recent highs, but have settled at levels significantly higher than before the pandemic. Total farm-sector debt will increase to $624.7 billion. Underscoring the financial strain farmers are under, a majority plan to use the increased government aid to pay down debt instead of spending it on their operations.
Major crop prices are below break-even levels: Around $5 per bushel for corn and $12 per bushel for soybeans. Favorable weather stemming from the onset of El Niño is expected to keep output high and prices low, but lingering drought could present complications. At the start of the year, 32% of corn acres, 38% of soybean acres and 42% of winter wheat acres were in some sort of drought, which could pose a problem for planting if it endures into the spring.
The trade outlook will depend on the Supreme Court, which is poised to rule on the president’s tariff authority. Farmers would welcome a pullback in these duties, which have increased the cost of agricultural inputs and hurt the competitiveness of American exports. But even if the United States Supreme Court rules against the current administration, it’s unclear how quickly United States exports would recover. Many longtime trade partners are looking elsewhere. China, for one, has gone back to buying Brazilian soybeans after meeting a 12 million-ton quota agreed as part of a trade truce with the United States.
For now, expect the agricultural trade deficit to narrow slightly this year to $37 billion, down from $43.7 billion, with both exports and imports shrinking.
The result will be a mixed bag for food prices. The Department of Agriculture is forecasting an overall increase of 3.0% (1.7% for food consumed at home, 4.6% for food consumed away from home).
Consumers will benefit from price declines for household staples like eggs (-22.2%) amid improvements in fighting the spread of avian influenza. Dairy product and pork prices are also expected to fall slightly, while poultry (0.2%), fresh fruits (0.2%) and vegetables (2.0%) will see small hikes. By contrast, the cost of beef will rise by 9.4%. Sugar and sweets will see a 6.7% increase.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.