U.S. farm income is poised for a sharp decline in 2026 as ad hoc federal support fades and underlying economic pressures reemerge. Insights from Terrain and its Executive Head, Dr. John Newton, warn the gains in 2025 are largely superficial, with row crop producers potentially facing some of the steepest profit declines in decades. Link to report.
Key Insights:
- Short-lived relief: U.S. net farm income is projected to hit $180 billion in 2025 — up 26% — but largely due to over $30 billion in emergency government support. Terrain’s Newton warns: “These economic margins are only a bridge until a new five-year farm bill can be authorized by Congress.”
- 2026 reversal ahead: Without new policy or market tailwinds, current projections are for net farm income to plunge to $139 billion — down 23%, or $41 billion compared to 2025. “If realized (and there is a lot of runway in front of us) this would be the third-largest year-over-year in over 30 years.”
- Row crops in the crosshairs pricewise: According to FAPRI’s most recent baseline, the prices received for major field crops are projected to fall or remain flat again in 2026. The season-average corn price is projected at $4.19 per bushel, soybeans at $10.06 per bushel, wheat at $5.33 per bushel and cotton at less than 70¢ per pound.
- Cost pressure mounts: FAPRI projects input costs to rise to nearly $460 billion in 2026, nearly $90 billion higher than 2021 levels. “Then, as further evidence of the stickiness, FAPRI projects inputs such as chemical costs, energy costs, and labor costs will push total expenses up by $37 billion over the next decade to nearly $490 billion by 2034.”
Masked weakness: Net farm income (excluding government aid) has declined $43 billion since 2022, but due to a major increase in government payments the farm economy appears strong in 2025.
Newton cautions that existing farm bill programs may not be sufficient for the volatility ahead. Terrain emphasizes operational adjustments and enhanced risk management: “Seeking ways to adjust your fixed or operating costs such as managing machinery expenses can help provide breathing room.”
Says Newton: “Like college football, this is a way-too-early projection of farm income in 2026. However, it recognizes that the current headwinds facing crop producers are showing no signs of letting up, nor are there any tailwinds clearly visible on the horizon.”
Bottom line: Unless commodity prices rebound or Congress passes a more robust farm safety net, the 2026 outlook signals a financial reckoning — especially for grain and fiber producers. As Newton sums it up: “These financial programs are only a temporary fix... we could be looking at a tale of two farm economies favoring cattle over crops.”
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