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| Best of NAMA 2025 |
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FARM BUREAU ANALYSIS: DECLINING FARM ECONOMY CONTINUES TO PRESSURE PROFITABILITY
Oct. 13, 2025
by Faith Parum, Economist, American Farm Bureau Federation
Washington, DC -- For most of the country, farmers face a difficult farm economy - as crop prices continue to decline and production expenses remain high. Strong yields provide little relief and imbalance in the market has driven profit margins to the point where breaking even is unachievable. Commodity prices have plummeted from their 2022 highs, creating a persistent imbalance in the farm economy that places real strain on the financial health of row crop farmers across the country.
Commodity Prices Declining
After the high prices of 2021 and 2022 driven by strong global demand, persistent drought and supply chain disruptions driven geopolitical tensions, markets have cooled. Corn that once topped $7 per bushel is closer to $4 today, down 54%. Soybeans have slipped below $10 per bushel after running at $15 just three years ago (decrease of 58%). Wheat prices have decreased 51% despite weather worries and cotton has come down 42% from COVID-19 pandemic highs.
One of the biggest drivers has been export demand. China, once the largest customer for U.S. soybeans, has shifted heavily toward South America, especially Brazil, where farmers harvested record crops at competitive prices.
Production Expenses Squeezing Farmers
As crop revenues continue to decline, expenses remain stubbornly high, leaving farmers with very few options beyond drawing down equity, tapping reserves or taking on more costly debt. Production expenses in 2025 are projected at record levels of $467 billion, nearly $12 billion higher than 2024 (up 2.6%), $50 billion above the previous five-year average (12%) and $85 billion above the previous ten-year average (21%). Each major cost category tells the same story: inputs remain elevated, eroding profitability and making it harder for farmers to reinvest in their operations or build financial reserves.
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