Trade concerns, crop input costs driving farm revenue worries

The agricultural sector is navigating choppy waters heading into 2026. Farmer confidence continues to slip. Concerns are mounting over trade policy and ongoing economic pressures. Amidst such volatility, it’s a call for farmers to ensure they’re adequately managing risk when and where they can on their operations.

Farmer confidence hits new lows

Recent data paints a picture of both farmers’ cautious optimism and growing uncertainty. The August 2025 Purdue University Ag Economy Barometer report held some sobering news. The index fell to 140 (out of 200), down 11 points from the previous month. The drop reflects a shift in farmers’ priorities. Heading into fall, trade policy has emerged as the biggest concern for 43% of farmers. Previously, most farmers in the monthly study ranked interest rates as their greatest concern.

"Farmers are facing a perfect storm of challenges, from rising input costs to stagnant commodity prices," said Nationwide Chief Agriculture and Sponsor Relations Officer Devin Fuhrman. "The uncertainty surrounding trade relationships is adding another layer of complexity to an already challenging environment."

Economists divided on recession status

Ag economists are split on whether the row crop sector has officially entered recession territory. According to Farm Journal's July Ag Economists' Monthly Monitor, 53% of economists believe the sector is currently in recession. That’s down from 72% in May.

Though farmers in the latest Purdue report say U.S. policy is moving in the right direction, data show an ag recession could happen. Farmers say it could happen based on four years straight of poor profit margins and projected negative returns extending into 2025 and 2026.

U.S. row crop prices were below breakeven prices in major corn- and soybean-growing states leading up to fall 2025 harvest. Even at trend yield, pre-acre revenue is expected to be in the red for the 2025 crop year, with bearish markets expected to continue through 2026. At the same time, rising input costs combined with stagnant commodity prices are steadily draining producers' cash reserves.

Stabilizing forces remaining in play

But there’s good news. There are a few factors expected to help maintain financial stability across the sector:

• Land value appreciation. Farmland values have increased 4.3% from 2024, providing asset-based security for many operations.
• Government support. Additional farm program payments from Congress are offering crucial financial relief.
• Safety net programs. Crop insurance and other risk management tools continue to provide downside protection.

"While government payments and land values are providing a cushion, they're not long-term solutions to the underlying issues," notes Fuhrman. "These support mechanisms help prevent additional pain. But they may also prevent the typical market corrections that would normally reset input costs."

Factors to watch moving forward

Several key factors will likely loom large in the ag sector's performance in the coming year:

• Trade policy developments and new agreements with key partners
• Crop size and production volumes
• Farm safety net programs and government support levels
• The relationship between crop prices and production costs
• Livestock market performance
• Biofuel demand and pricing
• Interest rates and loan availability

With such market volatility, Fuhrman recommends farmers make sure they’re managing risk so they don’t open the door to any more downside potential in what will likely be a challenging marketplace. Talk with your local Nationwide Farm Certified agent to make sure you have the right risk management tools in place.