Farmers Brace for Another Rough Year

The agriculture sector has been plagued by low commodity prices and is facing an uncertain trade outlook. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.You are now subscribedYour newsletter sign-up was successfulWant to add more newsletters?Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirementInsights for advisers, wealth managers and other financial professionals.Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.To help you understand what's going on in the economy and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…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.Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail.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.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up. President Trump said he will decide within the next 10 days whether or not the U.S. will launch military strikes against Iran. Tax Breaks A new tax deduction for people over age 65 has some thinking about Medicare premiums and MAGI strategy.

Tax Law Here's how taxpayers can amend their already-filed income tax returns amid a potentially looming legal battle on Capitol Hill.

The Kiplinger Letter Fears that SaaS subscription software could be rendered obsolete by artificial intelligence make investors jittery. The Lette A new chairman of the Federal Reserve has been named. What will this mean for the economy?

The Kiplinger Letter An emerging public health issue caused by artificial intelligence poses a new national security threat. Expect AI-induced psychosis to gain far more attention.

The Kiplinger Letter The entertainment industry is shifting as movie and TV companies face fierce competition, fight for attention and cope with artificial intelligence.

The Kiplinger Letter The Letter editors review the projected pace of the economy for 2026. Bigger tax refunds and resilient consumers will keep the economy humming in 2026.

The Kiplinger Letter Robot makers are in a full-on sprint to take over factories, warehouses and homes, but lofty visions of rapid adoption are outpacing the technology’s reality.

The Kiplinger Letter The President starts the new year by putting allies and adversaries on notice.

The Kiplinger Letter The Letter editors review the bills Congress will decide on this year. The government funding bill is paramount, but other issues vie for lawmakers’ attention.