Agricultural Economics

U.S. agriculture closed out 2025 under financial pressure, marked by tight margins, elevated input costs, and uneven income performance across sectors. Net farm income improved modestly on paper, but much of that stabilization was driven by government payments rather than stronger market fundamentals. Livestock producers generally experienced more favorable conditions due to strong cattle prices and tight supplies. In contrast, many crop operations (particularly grain producers) continued to face compressed margins amid weaker export demand and global competition.

Looking ahead to 2026, credit conditions are expected to remain restrictive. While the Federal Reserve has begun easing rates, borrowing costs remain high by historical standards, increasing scrutiny around liquidity, repayment capacity, and balance sheet strength. With continued uncertainty around trade, policy, and government support, proactive financial planning will be essential. A disciplined strategy will differentiate operations that are positioned to adapt from those that are more exposed to risk.