Ag economy outlook: Global pressures and farm revenue potential

The U.S. agricultural economy faces a range of challenges stretching around the globe. Though some are half a world away from U.S. corn, soybean and wheat fields, geopolitical issues are showing up at the farm gate. That begs attention to these challenges so you can make well-informed decisions moving forward, one ag economist says.

Global pressures and macroeconomic realities

Tensions abroad and resulting farm input supply chain vulnerabilities are generating a lot of volatility in markets like fertilizer and fuel, both key cost centers during the growing season. Uncertainty around the Strait of Hormuz and the prospect of continued trade blockades are driving a lot of anxiety in the ag markets, specifically how those costs will influence crop farmers’ revenue potential at a critical time.

“Critical maritime chokepoints like the Strait of Hormuz, Suez Canal and Bab el-Mandeb are creating extreme volatility in energy markets. This uncertainty is driving up ocean shipping rates and raising concerns about fertilizer supplies, specifically urea, heading into spring planting,” said CoBank Grain & Oilseeds Lead Economist Tanner Ehmke. “Closer to home, macroeconomic factors continue to weigh on planning. Grains and oilseeds are tracking closely with energy markets and broader inflation. And uncertainty remains regarding the Federal Reserve's approach to cutting interest rates, while U.S. tariff policies continue to act as leverage points in international trade.”

Market cycles and production shifts

Adding to the bearish pressure at the farm gate are the grain prices farmers have faced in recent years. But Ehmke said there’s hope; some indicators suggest prices are hitting a “cyclical bottom.” Historically high crop output for corn, soybeans, wheat and sorghum and a continued strong export pace despite recent changes are reasons for optimism.

“Soybean planted acreage is expected to climb in 2026, and though beef prices remain high for consumers, consumption is still strong,” Ehmke said. “And some forecasts call for a rebound in milk prices through this year.”

The financial health of the farm

Add it all up, and the remainder of 2026 and beyond will feature volatile markets that are likely to translate to about half of ag borrowers generating profits in 2026. Gross revenues in the livestock sector are slightly more bullish, especially in the beef cattle, hog and poultry sectors, Ehmke said. And farm policy will contribute to whether a farm is in the red or black.

“We are also seeing a heavy reliance on outside support. Government payments to farmers in 2025 were up 344% from the previous year, and many farm households are leaning on off-farm income to bridge the gap,” he said. “While farm loan repayment rates are slipping and the debt-to-asset ratio is climbing, it is reassuring to see that we are not at the crisis levels of the 1980s. This stability has been largely supported by a steady, reliable climb in farmland values across the U.S.”

Other factors to watch for the ag economy

Weather is never far from every farmer’s mind, and one potential coming shift could be a call for a watchful eye on crop and risk management moving forward. A transition to El Niño weather patterns is possible by mid-summer, which could translate to cooler and wetter conditions in the Plains, but hotter and drier weather in the Midwest that could open the door to lower row crop and forage yields.

And while it’s not getting the headlines other global trade issues are, Ehmke said the importance of the U.S.-Mexico-Canada Agreement (USMCA) cannot be overstated. “U.S. agriculture remains heavily reliant on exports to Mexico and Canada alongside China, making these trade relationships essential for market stability,” he added.

Secure your future with proactive risk management

The overall risk posed by today’s volatile marketplace will likely continue to challenge farmers’ revenue potential moving through 2026 and beyond. Talk to your Nationwide Farm Certified agent to discuss tailored risk management solutions and help ensure your livelihood remains protected, no matter what the market brings.