Farm Sector Sounds Alarm as Losses Deepen, Farm Bureau’s Newton Warns
American Farm Bureau economist John Newton says multiyear losses, collapsing margins, and delayed aid put farm viability at risk as trade setbacks and rising costs squeeze producers.
Farm financial stress has shifted from “challenging” to critical, according to John Newton, Ph.D., vice president of public policy and economic analysis (link) at the American Farm Bureau Federation. Newton warns that margins remain below breakeven for many major crops, working capital has been eroded, and Chapter 12 bankruptcies are climbing — all signs of persistent strain as producers head into 2026.
A recent commercial lender survey echoes his concern, showing profits will remain elusive for most borrowers next year.
Trade Shocks Deepen the Pressure
Newton notes that trade-related losses have compounded pre-existing economic headwinds. Farmers have faced multi-billion-dollar export declines in key markets such as China. While new trade frameworks have been announced, he says “increased export volumes have yet to materialize,” keeping cash prices stuck at or below early-2025 levels.
Long-Term Viability at Stake
Without additional economic assistance, Newton cautions that “long-term viability is at risk.” He argues that bridge support is essential until the One Big Beautiful Bill Act’s (OBBBA) enhanced farm bill programs start to phase in. That support, he says, is necessary to stabilize farm operations, rural economies, and ultimately consumer food costs.
Margins Below Breakeven Across Major Crops
USDA’s Commodity Costs and Returns data, WASDE reports, and Farm Sector Income & Finances all confirm what Newton says producers have known for years: input costs have surged while crop prices have fallen sharply, leaving margins underwater season after season.
Despite optimism from recent trade announcements, Newton points out that “products have yet to move in significant volumes,” and cash prices for corn, soybeans, wheat, and cotton remain under pressure. For farmers forced to sell at harvest lows because they lacked storage, any trade benefits will come too late.
Corn illustrates the crisis clearly. After China failed to meet Phase 1 commitments and uncertainty grew, growers planted nearly 100 million acres of corn. With fully loaded costs around $900 an acre — more than $90 billion invested — even record yields leave an estimated loss of more than $150 per acre, totaling over $15 billion in nationwide losses.
The picture is similar for other major and specialty crops. National returns above total costs for nine principal crops are sharply negative:
- –$20.2 billion in 2023/24
- –$34.8 billion in 2024/25
- –$34.6 billion in 2025/26
Specialty crop producers face even higher cost inflation, especially for labor, along with regulatory and workforce pressures that Newton says “further compound the challenges.”
Eroding Working Capital and Rising Bankruptcies
Years of negative returns have eroded working capital, increased borrowing costs, and pushed more farms into financial distress. Newton points to Kansas City Federal Reserve data showing rising loan delinquencies and more Chapter 12 filings. Lenders surveyed by the American Bankers Association say profitability will remain weak into 2026.
Why Bridge Assistance Is Urgently Needed
Congress has tried to cushion the blow through the American Relief Act of 2025 and the OBBBA. Those measures have delivered:
- $9.3 billion via ECAP for 2024 losses
- $5.7 billion through SDRP Stage 1 for 2023–2024 losses
But even with crop insurance and this ad hoc aid, returns remain deeply negative:
- –$9 billion in 2023/24
- –$17 billion in 2024/25
- –$28 billion in 2025/26
Perspective: By the time OBBBA’s enhancements arrive in FY 2026 and 2027, Newton estimates farmers will have accumulated more than $50 billion in losses over three crop years.
Bridge Support Needed Now
Newton emphasizes the urgency: producers are now securing operating loans for the 2026 crop year — and some crops are already planted. But lenders often refuse to count federal assistance until it is finalized, leaving many farmers exposed.
With the administration’s $12 billion trade-aid package still pending, Newton argues that “economic aid is urgently needed in the countryside.” And because the package covers only a portion of accumulated losses, he warns that additional bridge support is essential to prevent further deterioration in the farm economy.
“Financial support to offset trade-related losses and provide a bridge until OBBBA enhancements arrive will bolster the farm economy and rural America as we navigate these challenging conditions,” Newton concludes. USDA national averages provide broadbenchmarks; actual cost and revenue structures vary across farm operations.
