How US farmers are faring in 2026

Tight margins, high land prices and interest rates, labour challenges, extreme weather and increased regulation – it all sounds very familiar.

UK farming has been hit with many policy and tax challenges over the past two years, and those in the US have been buffeted by President Trump’s tariff twists and turns.

The consequences for oil and other commodity prices of the US action on Iran are shared by farmers on both sides of the Atlantic.

Farm incomes

The US Department of Agriculture (USDA) forecasts net farm income (NFI) will fall this year to almost 22% lower than the record highs of 2022. The department’s second estimate of 2026 NFI landed last week, at $158bn (£117bn), which is 3% down on the 2025 figure in cash terms.

See also: Managing farms abroad – experiences and challenges

This is above the long-term average, but reflects falling market-based receipts and an ongoing reliance on government support, say economists at the American Farm Bureau Federation (AFBF), the largest farmer representative organisation in the US.

Farmgate cropping sector cash receipts have fallen for the past three years, but are forecast to pick up slightly in 2026, while livestock cash receipts have risen for three years and are forecast a downturn this year.

Livestock outlook

Swings for livestock include a projected 4.3% drop in milk receipts, while eggs will bring in 66% less as this market ‘normalises’ after avian influenza price spikes. Tight supplies mean cattle and calf receipts will rise again in 2026, by a forecast 5%, while broiler receipts look set to drop by almost 3% and those for pigs by 4%.

USDA’s January cattle inventory showed the year started with feeding cattle and calves at 86.2 million head, a 75-year low and about 300,000 head fewer than the previous year, although this is a slower rate of reduction than for the past five years.

The latest farm income forecast reinforces the difficult reality for US agriculture, says the AFBF.

With production costs still high and market prices under pressure, many farming operations remain below breakeven, even after accounting for disaster and economic assistance.

NFI is set to edge lower in real terms. Cash receipts from commodity sales are generally expected to fall, production costs remain historically high, and farm debt continues to rise.

© Zoonar GmbH/Alamy Stock Photo

Cropping costs challenges

Crop-heavy operations have spent several years working through tighter margins, says Conterra Ag Capital, a private lender dealing exclusively with agricultural businesses and operating across the US.

“Producers who have used working capital to get through those years have less cushion now and the incidence of carryover operating debt means future production has to cover expenses from an earlier crop,” says Aleks Ridge, the firm’s director of marketing and communications.

“The latest lending data don’t show widespread financial distress in agriculture. Farm loan delinquency rates are still fairly low, farmland values have mostly held up, and agricultural banks are still lending.

“What has become easier to see is where the pressure is building. Repayment rates have dropped in several agricultural regions. Renewals and extensions are increasing. Lenders are seeing more demand for credit, and crop margins are still tight, even though some production costs fell in the second quarter.”

Overall, the US farm economy is in a challenged state, with tight margins, falling gross receipts and growing debt balances,” says Conterra’s chief credit officer TJ Roemmich. “This year marks a fourth consecutive year of economic downturn in agriculture. 

“All that said, US farmers and ranchers remain resilient, and several sectors have positive momentum – corn and soya bean prices are ticking up and we are seeing a counter-seasonal spike in the futures market.

“Until recently, cattle markets were very profitable. Tyson shut down a major beef plant in Illinois, the Mexican cattle market was reopened,and foreign policy has resulted in short-term headwinds”. 

The average dairy farm is coming off of a profitable 2024 and 2025 and experiencing sagging milk prices, which are being mitigated by the dairy-to-beef trend, he says, while in the important tree nut sector tightening supplies and significant price increases for US growers are creating significant optimism in California’s Central Valley.

Machinery investment

US farm machinery and equipment sales are weak, tracking well below their five-year average, with total tractor sales at 15,985 units in July, down 10.9% on July 2025 levels.

Association of Equipment Manufacturers (AEM) statistics show year-to-date sales down 13.1%, with four-wheel-drive units seeing a drop of 38.7% in July and 27% so far this year.

Just over 8,500 two-wheel-drive tractors of at least 100hp have be sold since the start of the year, a fall of 15.5% compared with the same period in 2025.

Self-propelled combine sales at 1,676 units are 10.2% down on the year so far.

The vast bulk of US tractor sales are two-wheel-drive models, with 104,142 units sold so far in 2026, of a total 105,185 units of all sizes.

Machinery prices remain high and stocks are well down compared with their 2022 peak, although the pace of reduction has slowed.

Labour

Attracting and retaining farm labour is a big problem in the US, addressed largely by recruiting high numbers of foreign workers on seasonal work visas. The US government has issued about 420,000 temporary work visas for agricultural workers every year since 2023.

This represents about half of all farmworker jobs and is concentrated in states growing fruit and vegetables. Foreign labour is also crucial on dairy farms, making up half of the workforce.

However, the seasonal aspect of the H2-A visas does not address the more permanent staffing needs of dairy farms, and the National Milk Producers’ Federation is calling for the programme to be altered.  

It wants to see farm labour reform, giving permanent legal status to current workers and their families and for dairy farms to have access to a workable guestworker programme.

Immigration raids

In 2025, the first year of President Trump’s second term of office, many farms were raided by Immigration and Customs Enforcement officers, with some losing significant staff numbers immediately, including some whose papers were in order.

In apparent recognition of the importance of domestic food production, that pressure has eased somewhat, say farmer organisations.

Late last year a change to the rules and process was expected to allow an additional 119,000 visas to be issued. This included lower wages for non-US born staff, allowing employers to charge for accommodation that was previously free, and quicker handling of H2-A visas.

Farm borrowing to rise at faster rate than asset appreciation

The Farmer Mac organisation is a US government-sponsored secondary lender that lends to banks and organisations, which in turn lend to farmers.

In 2025, 315 family farmers, ranchers and fishers filed for Chapter 12 bankruptcy protection in 2025, a jump of almost 50%.

However, this is almost half the rate of the last trough in 2019, and way below the thousands of filings recorded annually during the 1980s farm crisis, says Farmer Mac, describing the current situation as a period of genuine, if manageable, stress.

After adjusting for inflation, farm sector equity, assets and debt are forecast to increase in 2026 by 1%, 1.3% and 3.2%, respectively, says the USDA.

Farm real estate debt is expected to rise 4.8% (2.8% after inflation) compared with 2025. However, non-real estate debt – largely working capital for the production year – is expected to grow by 6%, or 4% after inflation.

Trade issues

President Trump’s second term of office has been a switchback ride for many farmers, who have lost markets for soya beans and other commodities as a result of tariffs, while production costs have risen, not least because of the US action in Iran.

The president’s latest trade move to suspend the tariff rate quota on imported minced beef for 90 days has caused chaos in the cattle market, says the AFBF’s Zippy Duvall.

In a bid to ease prices for consumers, the move will allow 300,000t of foreign beef into the US at a 25% discount to market prices.

Seventy percent of spring-born calves are sold during the 90-day window that overlaps with the plan to increase beef imports, says the AFBF, weakening cattle prices and eroding rancher confidence to make the long-term investments required to rebuild the country’s cattle herd from its historic low.

Cattle markets are volatile, with a rapidly evolving set of challenges, including regulatory pressures, disease threats, and trade barriers that limit reliable access to export markets, says the AFBF.

Drought, loss of grazing lands and reduced regional beef slaughtering and packing capacity have also contributed to the reduction in the national cattle herd.  

There is strong demand for beef, but at the same time, producers face record production costs, up 30% since 2020.