My Account
My Account
Farm Journal · May 2026 report

The hardest crop to grow is a profit margin

The May panel of the Ag Economists Monthly Monitor reads cautious optimism mixed with growing concern. Asked how they'd respond if today's crop prices and input costs persist, 40% of economists say many farms will need significant restructuring to stay viable. Bright spots remain: a reported $29 billion Chinese purchase pledge, firmer biofuel demand and signs that high-cost competitors like Brazil may slow. Still, rising borrowing costs threaten a breaking point for the most leveraged operations.

Download the full report About Ag Economist Monthly Monitor
Ag Economists Monthly Monitor

Key Takeaways from the May Panel

Cautious optimism — but the dominant theme is concern.

Asked how they'd respond if today's crop prices and input costs persist, 40% of the panel said many farms will need significant restructuring to remain viable — and just 33% believe producers can largely maintain operations as they are. The hardest thing to grow on a U.S. farm right now isn't corn or soybeans; it's a profit margin.

There are bright spots: a reported $29 billion Chinese purchase pledge, firmer biofuel demand and signs that high-cost competitors like Brazil may slow — potentially opening an export window late in 2026. But with another rate hike expected before year-end, rising borrowing costs threaten a breaking point for young, beginning and highly leveraged operations.

Three numbers at a glance
40%Say many farms need significant restructuringIf today's prices & input costs persist
60%Skeptical the Senate passes year-round E15Call it unlikely or highly unlikely this session
0%Call China's $29B pledge "highly positive"60% say only "moderately positive" — a floor, not a fix
Open-ended panel question

Two factors driving agriculture's next 12 months

Factor #1

Input costs & geopolitical stability

Breakeven costs above market prices.
Strait of Hormuz impact on fertilizer and energy prices; impact of geopolitical conflict with Iran.
How high nitrogen prices impact planting decisions — crop prices need to be keeping up with escalating input prices.
Input costs have rallied higher, but could go higher headed into the second half of the year if the Strait remains closed.
Factor #2

Market demand & trade policy

Renewed trade commitments from China and prospects for greater utilization of renewable fuels.
Global oilseed consumption is forecast to rise thanks to favorable biofuel policies in the U.S. as well as Brazil and Indonesia.
Soymeal export demand is forecast to see an annual increase of 25% in 2026/27.
Demand growth for feed grains coupled with a reduction in global supplies.
Monthly tracking · same questions, every month

The state of the U.S. ag economy

Conditions vs. last month

40% say better than a month ago · 30% worse

Somewhat better off
40%
Unchanged
30%
Somewhat worse off
30%
Much worse off
0%
n = 17May 2026
Conditions vs. last year

41% net worse · but 36% now say better

Somewhat better off
36%
Unchanged
23%
Somewhat worse off
23%
Much worse off
18%
n = 17May 2026
Outlook · 12 months ahead

41% say ag economy is better off · 12% worse

Somewhat better off
41%
Unchanged
47%
Somewhat worse off
12%
Much worse off
0%
n = 17May 2026
May Assessment · Trade With China

How do ag economists read China's $29B purchase pledge?

A helpful floor for prices — not a game-changer.

Six in ten economists call the reported $29 billion annual commitment — which excludes soybeans — moderately positive: a useful floor rather than a breakout. A third read it as neutral, and none called it highly positive. Several flagged that without soybeans on the table, China would have to find $29 billion of other crops to buy, and that purchase pledges are notoriously hard to measure or enforce.

"At $29 billion, that likely is more than China would have bought from us, which is positive comparatively. However, it does not drastically change the outlook on prices and returns."
Highly positive
0%
Moderately positive
60%
Neutral
33%
Marginally negative
7%
Highly negative
0%
Q10 · impact of the $29B annual figure · May 2026
May Assessment · global competition

The hardest crop to grow in 2026 is a profit margin

Between competition from Brazil and Argentina and the unpredictable nature of trade deals, the panel's read is that survival — let alone profitability — is an uphill climb this year. In a separate Farm Journal poll, more than 86% of corn and soybean farmers said they are worried about global competition.

Q9 · Brazil's soybean expansion

Will South America finally hit a wall?

Brazil has expanded soybean acreage 3%–4% a year for years. The panel is evenly split on whether it cools: a third expect a significant slowdown as new-land conversion gets too expensive, while another third think favorable currency exchange rates keep expansion on pace. Either way, U.S. crop insurance and farm programs give domestic growers an income-smoothing edge South America lacks.

"We could start to see the market respond with higher prices at the back end of 2026 … by the time the calendar turns to 2027, those might be good opportunities to move old-crop grain and oilseeds." — Ben Brown, Univ. of Missouri
Significant slowdown (1%–2%)
33%
Resilient growth (3%–4%)
33%
Strategic pivot to existing acres
13%
Delayed — then sharp contraction
13%
Policy-driven
0%
Other
7%
Q9 · expected trend over the next 12–24 months · May 2026

How U.S. farmers adapt into 2026/27

25%

Switch to lower-cost crops

A quarter expect more producers to move corn and wheat acres toward crops that cost less to grow, such as soybeans or pulses.

25%

Regional shifts to less planting

An equal share predict regional pullbacks — marginal ground left idle and lower-intensity management on the acres that stay in production.

May Assessment · tied to the Strait of Hormuz

How long will diesel & fertilizer prices stay elevated?

Diesel prices

Plurality: At least 6 more months

1 more month
0%
6 more months
44%
12 months
19%
18 months
6%
24 months
13%
Other
19%
Both timelines depend on how long the war in Iran lasts · May 2026
Fertilizer prices

Stickier — The peak is a full year out

1 more month
0%
6 more months
19%
12 months
38%
18 months
19%
24 months
12%
Other
13%
Both timelines depend on how long the war in Iran lasts · May 2026
May Assessment · Year-Round E15

Will the Senate pass permanent, year-round E15 this session?

The majority are skeptical it passes.

Despite strong support from ethanol groups and farm organizations, 60% of the panel think the Senate is unlikely or highly unlikely to pass permanent year-round E15 sales this session. Just 27% believe passage is likely, and only 13% call it highly likely — economists see substantial political hurdles remaining.

Highly likely (>75%)
13%
Likely (51–75%)
27%
Unlikely (26–50%)
47%
Highly unlikely (<25%)
13%
Q11 · likelihood of legislation this session · May 2026
May Assessment · The Future of the Farm

If crop prices & input costs hold, what happens to operations?

Q5 · the survey's most striking finding

40% say many farms will need to restructure.

If today's crop prices and input costs persist, a plurality — 40% — say many farms will require significant restructuring to remain viable, and another 13% see a path out of farming within one to three years. Just 33% expect to maintain current operations, and not one economist said producers are well-positioned to grow.

"I feel like we will start seeing things shift to very bad in two years if we do not see an up year quickly."
Need significant restructuring
40%
Maintain current operation
33%
May be forced to exit (1–3 yrs)
13%
Unsure / too early to tell
13%
Well-positioned to grow
0%
Q5 · most likely outcome if prices & costs hold · May 2026
May Assessment · interest rates

With a rate hike now likely, what hits the farm economy hardest?

With another interest rate hike expected before year-end, the panel was asked to pick up to two consequences. More than half pointed to reduced capital investment, and an equal share warned that higher borrowing costs could create a breaking point for the most leveraged producers.

50%+

Reduced capital investment

More than half of the panel named this the leading consequence: producers sharply cut equipment and infrastructure spending as financing costs run ahead of projected return on investment.

50%+

A breaking point for the leveraged

An equal share warned that higher debt-servicing costs could create a “breaking point” for young, beginning, and highly leveraged operations — even as economists do not expect widespread farm failures.

Still, economists do not expect widespread farm failures — rising borrowing costs will increasingly separate financially strong operations from those already under stress.

May Assessment · open-ended

The one indicator each economist is watching.

"
Export demand has been the wildcard for the past year. This is the big wildcard that producers did not enter 2026 planning to deal with.
Exports — the wildcard
"
Living in the Rocky Mountain region, I'm watching the health of our river systems. Snowpack was super low this year — many irrigation systems are delivering only about 40%–50% of normal water for irrigation.
Western water
"
In our state, land values have not shown widespread signs of cooling. Land for rent is coming to market, but it is still attracting not only renters but also premium rents.
Land values & cash rents
"
There is no single one: Net Farm Income, the Debt-to-Asset Ratio, the Purdue/CME Ag Economy Barometer, among others. Overall net farm income masks the very different situations faced by crop producers vs. cattle producers.
Net farm income & financial health
"
Quarterly pace of ag loan demand at commercial banks, the Farm Credit System and the Farm Service Administration. If access to cash were to pull back, it would be highly detrimental for farmers.
Credit access & capital
"
So far input price increases have largely impacted fertilizer, diesel and feeder cattle. An increase in general inflation would widen the impact to other inputs.
Input costs & energy
Follow Agweb
Get News Daily
Subscribe now
Get Market Alerts
Subscribe now
Get News & Markets App