The financial picture of American farms is a fragmented story, with different sectors around the country diverging sharply, defying the familiar narrative of a single, sweeping crisis.
From geopolitical concerns and risks from extreme weather — hot and cold — to government intervention, numerous factors can have a major impact on the wide-ranging agriculture industry nationally.
The U.S. Department of Agriculture releases farm income and wealth statistics three times a year. Its February report forecasts a net farm income to decline relative to 2025. The forecasted value is $153.4 billion, down about 0.7% year over year.
“It’s challenging to make high-level generalizations about the farm economy because each region and agricultural sector faces different challenges,” said Becca Weir, assistant professor of agricultural economics at Penn State University. “Our current market conditions could change quickly with adverse weather during the remaining crop production season or an intensified livestock disease outbreak. At the moment, the overall financial health of American farms is strained.”
The biggest risks often come from weather or climate patterns, Barry Ward a professor at the Ohio State College of Food, Agricultural and Environmental Sciences, said.
“We look at the last 100 years; margin and profitability have always been central in farmers’ minds, and part of that has to do with weather, especially in crop production and indirectly, livestock production,” Ward said.
Geopolitical risks factor in as well, along with land-use competition.
“We are seeing continued pressure on land and competition,” Ward said. “Whether it is housing or solar or data centers, putting pressure on counties and communities, and will likely continue.”
When the latest USDA report comes out next month, it will offer a glimpse into the impact of the war in Iran, Ward said.
“The timing of this report is critical,” Weir said. “The February data were collected at the beginning of the conflict surrounding the Strait of Hormuz. This closure impacted fuel and fertilizer prices for farmers, increasing their overall input cost, which, all else equal, decreases net income.
“Trade, pests, diseases and weather are just a few of the many factors playing a role in the global agriculture economy, and these factors can tip the scales in terms of the overall financial health.”
Pressure on dairy farmers
Dairy farmers are under economic pressure, but the national picture is mixed rather than uniformly bleak.
Unlike beef, dairy farmers can’t simply scale back when the milk check shrinks, Ward said. “Cows need to be fed and milked every day regardless of price,” he said.
And the price has been ugly: The January 2026 all-milk price averaged $750 per hundredweight, down $6.60 from a year ago, with margins above feed cost falling by $7.82 per hundredweight.
“USDA’s official 2026 forecast pegged milk at $18.95 per hundredweight against production costs of $19.14 for a typical large herd and nearly $42.70 for the smallest operator,” Ward said, meaning many family dairies are structurally underwater before the year gets going.
Dairy farmers are still meeting the challenges: U.S. milk output continues to rise as the number of farms keeps falling. The farms that remain are generally larger, more automated and lower-cost per unit, according to the USDA.
The agency, in its Ag Census, says the country had 24,470 farms selling milk from cows in 2022, down 39% from 2017. The industry also became more concentrated: The share of milk cows on operations with 2,500 or more cows rose from 35 to 45% between 2017 and 2022.
A Farm Journal report said only 46% of surveyed producers expected a profit in 2026, down 24 points from 2025, suggesting that sentiment has weakened sharply.
U.S. dairy is not collapsing, Ward said; it is consolidating. Output is up, technology adoption is up, and big farms can usually produce milk more cheaply, but many farms still face margin stress from feed, labor, financing and the cost of upgrading facilities.
Livestock sector
Generally, the livestock sector has seen better times with lower commodity prices equating to lower feed costs, Ward said.
Hog prices are a little different, said David Anderson, Texas A&M professor and extension economist for livestock.
“Pork production is about the same this year as last year, but prices are struggling,” Anderson said. “We had a run of profitability on the hog side.”
Poultry production is up about 4% this year, Anderson said.
“We’ve seen lower prices, particularly on the breast meat and wing side, responding to large production increases,” Anderson said.
Anderson said there are record-high prices on cattle and calves, although the prices have come down in the last couple of weeks.
“We even have a lot more dairy farms that are producing dairy cows crossed with beef breeds and producing a cross-bred beef animal,” he said. “That has boosted a lot of dairy farmers’ returns.”
Overall, the beef sector is having its best run in a decade, Anderson said, generating record profits for cattle ranchers, but the good times might not last.
After years of drought-driven herd liquidation, U.S. cattle numbers have shrunk to their smallest level in decades, to 86.155 million as of January, according to the USDA, a decline that has continued for seven consecutive years
Cost concerns
The leading livestock costs for farmers and ranchers are fertilizer and fuel, which also change based on climate and geography.
Referring to the central to eastern part of Texas and the country, “there are so many varieties of grass, and they require fertilizer. And fuel to get around to all the cattle and the work of a cattle producer,” Anderson said.
Another factor for producers is drought, experts say.
“Around the country, we have some pretty big cattle-producing areas that are in drought,” Anderson said. “And there is no way to feed your way out of a drought. This is much more important on the cow-calf side than production costs. People ask ‘Why aren’t we expanding our herds given record prices?’ Drought is part of the reason. But ranchers are questioning expansion if prices are eventually going to collapse.”
Farmers, big and small, are also dealing with uncertain costs based on international disruptions, trade and tariffs.
Those factors “have introduced a lot more uncertainty into the marketplace,” Anderson said. “The war in Iran and its effect on fuel just adds to market volatility, and is a concern for producers in this sector.”
Corn and other row crops
The row crops and corn sector is facing challenges, as well said Krista Swanson, chief economist at The National Corn Growers Association.
Over the last two-and-a-half centuries, corn and the farmers growing it have driven opportunities, she said.
Today, farmers continue to meet the needs of a modern world through advanced innovations, but that future is at risk, Swanson said.
Corn growers strive to support their families and businesses on farms that often require millions of dollars to enter and substantial ongoing cash flow to operate, Swanson said.
In early 2026, the association surveyed 1,000 corn growers nationwide to understand how recent years have shaped the outlook for their farms and their futures.
“The results point to a troubling outlook for family farms without meaningful action,” she said. “Nearly 80% of growers believe the next generation will not be able to succeed on their farm without support from the current generation — yet that generation is already under significant strain.”
Corn growers are absorbing a fourth straight year of losses. It will cost farmers a forecast average of $917 to plant an acre of corn in 2026, while the projected market price of $4.10 per bushel is 37% below the $6.24 in 2022, the growers association reports. Meaning every bushel harvested loses money.
A farmer working 1,000 acres of corn stands to lose more than $160,000 for the year, association data show.
On July 17, the American Farm Bureau released results of its own research. Several years of high inflation and low commodity prices, coupled with volatile production costs, are continuing to squeeze farmers financially, the report said.
Equipment costs
Ward grew up on a grain farm.
Asked what costs are putting the most pressure on farms such as the one he grew up on, he said, “Fertilizer has been in the headlines. Maybe fuel, to some extent. But fuel is a lower percentage of the overall bill than machinery and equipment. We don’t really see the full cost of machinery and equipment until we look at replacement and trade-ins.”
Large producers are having to turn over equipment every year or couple of years, Ward said.
“Another cost is labor, and land has seen consistent increases in cost,” he said. “We may see some plateauing of those costs. Lower margins will put some pressure on land rental, and we’ve already seen that show up partly throughout the Midwest.”
Already high costs are going to be more volatile than expected, Ward said.
“That volatility is a little worrisome for row crops going into 2027,” Ward said. We are already seeing some cracks. We have seen the data showing higher bankruptcy numbers across the country. Not anything too wild. But compared to where we’ve been, we have seen an increase in bankruptcies.”
Ward said discussions he’s had with bankers put more producers in a higher-risk category than they were four or five years ago.
“I don’t think we are in a full-blown farm crisis or looking at one for the next year, but there are some issues,” he said.
“Our current market conditions could change quickly with adverse weather during the remaining crop production season or an intensified livestock disease outbreak. At the moment, the overall financial health of American farms is strained.”