Arkansas farmer Nathan Reed says the financial pressure facing farmers in the South this year is unlike anything he has seen in his career — and it is hitting rice and cotton producers especially hard.
After several years of elevated input costs combined with an extended stretch of weak commodity prices, Reed says many Southern operations are now reaching a breaking point. While farmers across the country are feeling margin pressure, he says producers in the Delta face a uniquely severe financial squeeze that leaves little room for error.
“We are in a very difficult situation in the South, in Arkansas,” Reed says. “I grow five crops: cotton, corn, soybeans and rice, with wheat and milo every once in a while. My corn and soybeans don’t pencil out, but the losses are nowhere near what the rice and cotton losses are. It is just brutal, the losses that we’re sustaining.”
Reed says the scale of the losses is hard to overstate, particularly for rice and cotton.
“Rice and cotton right now are by far the biggest losers in commodities,” he says. “It’s just staggering losses per acre.”
Southern Farms Face Unique Financial Exposure
Reed says the financial stress facing Southern farmers goes beyond commodity prices alone. Structural differences in how farms operate in the region create a very different risk profile than what many Midwest producers face.
“Being in the South, we farm improved land, and we’re mostly irrigated,” Reed explains. “Compared to the Midwest, I would say we [have] farm larger operations, but we’ve been forced toward that just to maintain the same standard of living.”
That expansion, he says, has not necessarily improved profitability — and in many cases, it has increased exposure.
“We’ve been forced to expand quite a bit, but we don’t have as workable of an insurance program,” Reed says. “Because we’re always going to make 80% of a crop through irrigation and land improvements, we can’t really rely on insurance. We’re always going to make the crop.”
That reality, Reed says, leaves Southern producers vulnerable when prices collapse.
“We can have some pretty severe losses without any real way to recoup those losses,” he says. “That’s the risk we live with.”
Rice and Cotton Losses Deepen
USDA was expected to roll out the exact Farmer Bridge Program payment rates this week, but the agency says that will now happen before the end of next week with payments expected to roll out early next year. Ahead of USDA’s official release, early estimates point to cotton and rice seeing the biggest payment rates, and that’s understandably so considering cotton and rice are experiencing the steepest losses this year.
As price pressure intensifies, Reed says earlier loss projections are quickly becoming outdated, particularly for rice.
According to University of Arkansas projections released earlier this fall, losses were estimated at roughly $85 per acre for soybeans, nearly $353 per acre for cotton and about $259 per acre for rice.
Reed says rice losses are now significantly worse.
“The rice price is over 50¢ less than when that projection was made,” he says. “Rice losses are closer to over $300 an acre now, and yes, that’s very close to reality.”
He says those figures already include equipment payments, land rent and operating expenses — and that makes the situation even more precarious for producers carrying heavier debt loads.
“They take every number into account, equipment payments, land, rent, all of that,” Reed says. “If you’ve got a heavy debt load on equipment, rent and land at 20% to 25% market share, that’s absolutely the kind of loss you’re looking at.”
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‘You Can’t Just Walk Away From Cotton’
Despite those losses, Reed says cotton isn’t a crop farmers can simply abandon. Years of investment and infrastructure lock producers into the crop, even during downturns.
“The problem with cotton is you kind of have everything else we farm, and then you have cotton,” Reed says. “It takes a lot of specialized equipment. I’ve got three cotton pickers. I don’t have enough combine capacity to harvest all my land if I walked away from cotton.”
Beyond the equipment, Reed says entire regional systems depend on cotton production.
“You’ve got gins, warehouses, seed crushing facilities — this whole infrastructure that’s built just for cotton,” he says. “If you’re not careful, you can lose that in two to three years.”
Reed says most cotton farmers understand what’s at stake.
“I think most cotton farmers recognize that and are willing to try to stay in the cotton business as long as we can,” he says. “I’ve severely curtailed my acres, not because I wanted to, but out of economic necessity. I had to cut back to a level I can afford to lose.”
Global Competition and a ‘Non-Level Playing Field’
Reed says the financial strain is compounded by what he sees as unfair global competition. While U.S. farmers operate under strict regulations and higher costs, competitors abroad do not face the same constraints.
“I used to feel like the American farmer could compete against anybody in the world,” Reed says. “Now, I feel like we can produce the highest-quality crops under the best environmental and worker safety standards, but we are having difficulty competing on price.”
He points to cotton as a clear example.
“When you have South America making money on cotton in the low 60¢ range and the American cotton farmer hemorrhaging money, something’s not right,” Reed says. “How do you rebalance that? I don’t know.”
Higher labor costs and equipment expenses only widen the gap, he adds.
“I pay more for my labor per hour than most of our competition pays per day,” Reed says. “They’re buying the same tractors we are, but for 20% less because they don’t have to deal with emissions systems and the problems that go with them.”
Financing Pressure Builds Heading Into 2026
As producers look ahead to 2026, Reed says decision-making has shifted from profitability to survival.
“Right now, what we’re really looking at is what we can lose the least on,” he says. “That’s what my decision-making is.”
Even with expected USDA bridge payments, Reed says financing pressure is mounting and many producers may not make it through another year.
“Oh absolutely, there will be farmers who can’t get financed,” Reed says. “It’s been quiet because people were waiting to see what would happen. But my banker is getting calls every day from people trying to refinance or who’ve been cut off.”
He says once temporary relief measures are accounted for, the true impact will surface.
“I think that’s when the pain really comes,” Reed says.
The Stakes for Rural America
Reed says the consequences of sustained losses extend far beyond individual farms, especially in rural Southern communities where agriculture is the primary economic driver.
“In our little community, it’s just ag,” he says. “We don’t have factories. The whole middle class works for ag-related businesses.”
If farming isn’t viable, Reed says the ripple effects are devastating.
“If agriculture is not sustainable, I can’t stay,” he says. “And it drains out the tax base, the schools, everything. If ag is not viable, we might as well shut the door on every small town across the South.”
Reed says American farmers have upheld their end of the bargain.
“The American farmer has done their job,” he says. “We’ve provided the cheapest food per capita anywhere else in the world.”
But without change, he warns, the system will continue to erode.
“Twenty years ago, you could farm 2,000 acres, raise a family and be solidly middle class,” Reed says. “Now you’ve got to farm five times that just to maintain the same lifestyle. That tells you how bad this has gotten.”
