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FARM BUREAU: CROP PRODUCTION COSTS EXPECTED TO REACH NEW HIGHS IN 2027
Jun. 22, 2026
By Dr. Faith Parum, Economist, American Farm Bureau Federation
Washington, DC -- The latest USDA Commodity Cost and Returns report provides the first comprehensive look at how recent disruptions in global energy and fertilizer markets are filtering down to the farm level. Released after months of volatility stemming from conflict involving Iran and concerns over shipments moving through the Strait of Hormuz, and as expected, the updated projections indicate production costs are expected to be higher than previously anticipated for every major crop for the 2026 growing season.
The findings align with the American Farm Bureau Federation's recent survey of over 5,700 farmers, which found that 70% of respondents were unable to afford all the fertilizer they needed for the 2026 crop year as rising input costs continued to strain farm finances. The next update will be in November of this year.
Costs Projected to Reach New Highs in 2027
USDA's new 2027 cost of production forecast reveals farmers may not see meaningful relief from elevated production costs anytime soon. USDA's preliminary 2027 projections show total production costs continuing to rise for most major crops, pushing all commodities to record highs.
Higher production costs are driven not by fuel and fertilizer in 2027, but rather by higher prices for seed, chemicals, repairs, labor, machinery and cash rents expenses. USDA's current estimates for rice production costs are $1,427 per acre in 2027, followed by peanuts at $1,248 per acre, cotton at $1,001 per acre and corn at $952 per acre. Soybeans, sorghum and wheat are also projected to reach record levels.
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