When it comes to the farm economy, 2025 has been a year of contrasts. Some farmers are finally seeing brighter days, while others are fighting just to stay afloat.
Kansas State University’s Joe Parcell says the latest farm financial data tells a story of both opportunity and risk — and of two very different realities across American agriculture.
A Center Focused on Risk — and Reality
Inside the business school at K-State, Parcell leads what he calls a “pretty unique” operation. As director of the K-State Risk Management Center, Parcell’s work spans across the College of Business, College of Agriculture, and College of Engineering.
“I have the pleasure of leading a center here that’s pretty unique out there in the country,” he says. “It’s the Risk Management Center, and here we believe it’s interdisciplinary, that as you get into your career and making decisions, it’s not just about your discipline — it’s about learning from others, because we don’t work in disciplines. We work interdisciplinary when we’re trying to solve problems with firms. So, we’re a joint [operation] between really the College of Business, the Ag College, and the Engineering College here at K-State.”
That interdisciplinary approach is helping shed new light on farm-level financial pressures. Recently, Parcell’s team joined forces with the University of Missouri to study leading indicators of farm financial stress. What they found, he says, reveals a growing divide within agriculture.
Row Crops Versus Livestock: A Tale of Two Economies
“The one glaring [issue] out there is the difference between row crop farming and livestock farming right now,” Parcell explains. “The other is what’s going on in the equipment sector — and not just at the farm. I mean, this really extends into our communities and our rural areas. And, you know, probably the third one is the banks. It’s not just the farms, but it’s the banks that are lending them money and what kind of situation that they’re in, especially our local community banks.”
The disparity between the sectors has widened dramatically, as noted in a recently released report called “Leading Indicators of Farm Financial Stress: Fall 2025.” Cattle producers are seeing strong profits and renewed optimism, while many young row-crop farmers are dealing with tight margins and higher costs that have become the new normal.
Parcell notes part of the challenge is policy-related.
“Frankly, we need the government to reopen,” he says, referring to the ongoing federal shutdown. “We got some good news last week with our FSA offices reopening on limited staff, but we’ve got a lot of money out there to push out to the farmers from even last year yet — and this year. Plus, we need the Risk Management Agency to be open and help those producers out with what’s going on in crop insurance and stuff.”
Cattle Drive Kansas’ Rebound
Despite the challenges, Kansas agriculture is showing signs of recovery — thanks largely to cattle. Parcell says farm income in Kansas is set to double from last year. That’s one of the revelations that showed up in a report released last last week called the “Fall 2025 Farm Income Outlook for Kansas.” The report was released jointly between the University of Missouri and K-State.
“We’re going to have farm income about doubling from last year to this year,” he says. “And that’s a combination of three things really driven by an increase in revenues more than a drop in expenses. That revenue is being driven — of the $6.2 billion we’re going to add to the farm revenue side — 58% of that is with the cattle side or livestock side. We’ve got 34% of the government payments and only 8% in row crop.”
The report shows Kansas crop receipts are projected to rise by $559.18 million (8%) in 2025, with increases expected across all four major commodities despite lower prices. This is because yields are estimated to recover from recent lows as the state recovers from persistent drought.
According to the new report:
- Corn planted area is projected 550,000 acres (9%) higher at 6.85 million acres in 2025. This, combined with higher yields than in 2024, results in a 17% projected increase in production that would offset a 9% drop in price and generate a $316.34 million (11%) increase in cash receipts. Crop receipts will increase by 8%, and 2025 Kansas net farm income will increase by 88% in 2025.
- Soybean cash receipts are projected to jump $182.98 million (13%) in 2025, driven largely by recovering yields after three years of drought. Total production is expected to increase 2% to 157.95 million bushels, despite a decline of 430,000 planted acres (-9%).
- Wheat planted acres dipped by 300,000 (-4%) in 2025; however, an increase in yield is projected to contribute to a $25.49 million (2%) increase in cash receipts.
Recovery from drought is also helping fuel the cattle sector. According to the report,
- Cash receipts for cattle and calves, which account for 90% of Kansas’s livestock receipts, are projected to increase by $3.54 billion (24%) to $18.33 billion in 2025.
- Marketings for cattle and calves are projected to increase by 4%, and fed steer prices are projected to increase by 21%.
After years of drought and depressed prices, cow-calf producers are finally getting a chance to reinvest.
“These cattle producers, especially the cow-calf producers, I mean they’ve suffered through a lot of years,” Parcell says. “They’ve had drought years, they’ve had low prices, and this has just given them a chance to kind of replenish their supplies so they’re getting ready for the next cycle — because we know everything will come to an end and we’ll end up the other way as part of this cattle cycle. High prices sell high prices, and we’re going to be at low prices in the near future.”
Equipment and Banking Pressures Build
While higher cattle prices offer temporary relief, Parcell warns that other parts of the rural economy are under real stress. The Association of Equipment Manufacturers’ latest flash report shows new 4-wheel-drive tractor and combine sales are down almost 40% this year — a sign of cautious spending and shrinking margins.
“I think our biggest concern in this is with the equipment dealers themselves,” Parcell says. “We saw a lot of consolidation last year. These equipment dealers hire a lot of folks in the rural areas. They’re an important source for our farmers when it comes time to fix equipment and get parts and stuff. It’s just their survivability — and they’re carrying some pretty expensive equipment on that yard right now with some higher interest rates than we had a few years ago.”
Still, despite the softening in sentiment among farmers, Parcell says bankers aren’t panicking — at least not yet.
“That’s the most interesting one,” he says. “Because you really see things in a declining mode, but it’s not in a fully worrisome mode. So, in what we talk about, or what we use as kind of our benchmark, we go back to 2016, ’17, ’18, where we had similar things. We had depressed commodity prices, we had some trade wars going on in there, and sentiment is not strong. But it’s not as weak as what it was back during that period.”
Looking Ahead: Volatility Rules
When asked what worries him most, Parcell doesn’t hesitate. It’s not what’s happening today — it’s what could happen next.
“I think the biggest concern is what’s to come,” he says. “There’s so much volatility out there in the market right now. We have trade wars. We have what’s going to be said next out of the administration. We have a government shutdown right now. We continue to have, again, strong land prices. There’s just so much uncertainty — some things that maybe we don’t typically associate with a downturn in the farm economy. Or counter to what we might expect to see right now in there. So, I think that’s the biggest challenge in all this — we all feel like things should be worse. At least the indicators should be worse than what they are.”
As the new year unfolds, Parcell says Kansas farmers and ranchers will continue navigating this uncertain terrain — balancing optimism with caution, and watching closely for what’s next in this unpredictable farm economy.
