U.S. farmers are bracing for another challenging year, as many issues from 2025 — trade uncertainty, tariffs, and global competition — spill into 2026, as many growers struggle to break even, Stephen Nicholson, North America head of crops at Rabobank, told AgTechNavigator.
The consensus is that “the farmer is in really bad shape,” and “things are not good,” Nicholson explained. However, those who own their land are faring better than those who are renting, he noted.
“The farmer has now had four years of really tough times. And as a financial barometer, ... if you go back to 2022, for example, we had high prices, we looked at our operating lines, and farmers were pulling 20-25% off those operating lines. If you look at that today, that number is closer to 65-75% [that] they are pulling off those operating lines. There is much more debt financing now because they are not gaining the revenue,” Nicholson elaborated.
Generally, farmer sentiment falls into two camps: a group that is holding out hope that markets will return in 2026 and another expecting more financial assistance to manage the volatility, Nicholson summarised.
Some farmers are convinced that “the golden age of agriculture is coming,” a term used by President Donald Trump, he added. Most farmers (75%) believe the U.S. is heading in the right direction, and 54% stated that tariffs improve the ag economy, according to a survey of 400 farmers conducted by Purdue University and CME Group.
Last year, the U.S. government supported the agriculture sector to the tune of $42 billion in 2025 across various programmes, with more assistance expected to ramp up ahead of the election season, Nicholson noted.
“It is an election year, so incumbents like to make sure that their constituents are happy when they go into the voting booth,” Nicholson said. “At the same time, I think farmers are more ‘down in the mouth’ than they were 6-12 months ago and cannot really see the light at the tunnel or see that there is something out there that is going to put them in a position where they are going to be in better financial shape than they were a year ago.”
Are government policies complicating the ag economy?
The re-emergence of industrial policy — government policies and incentives to support domestic production and consumption — can further complicate the ag economy in 2026, which can ultimately raise consumer prices, Nicholson explained.
“Whether it is by tariffs, protectionism, phytosanitary rules or whatever the case might be, there is more protectionism in the world, which is going to make products more expensive for the consumer. And as I argue to people, when you look back at free trade — let’s say after the Berlin Wall fell until Covid — we lifted people out of hunger. We lifted people’s income, so they were able to buy better food and better consumer goods. Why is that not a good thing?” Nicholson emphasized.
In the coming years, economics will drive broader changes in the ag sector, leading to more production and fewer resources being wasted, Nicholson explained.
For instance, Iowa, Illinois, and southern Minnesota can grow corn more efficiently than North Carolina, growing 250-300 and 100 bushels an acre, respectively. Over the next several years, North Carolina corn acres “will go away,” since it will be more cost-advantageous to produce in the other regions, he added.
The Brazil connection: Is it competition or coopetition?
Last year, China’s pullback on U.S. soybeans in favour of Brazilian crops was a major flashpoint in the global ag economy. Brazil’s ag economy is making strides, including breaking export records in 2025, led by strong soybean and beef production. However, Brazil’s ag sector has been at this reflection point before, Nicholson noted.
“The argument for years is that Brazil will take us over, and we won’t be competitive at all. I have heard that argument for 30-40 years, and we are still here today. So, that is the good news,” Nicholson elaborated.
He added, “The other argument has always been: Brazil produces soybeans; the U.S. will produce the corn. Now, that argument is starting to hold a little more water because you look at what is happening globally. Now, part of this is trade disruption, so I do not want to gloss over that. But when you think about what has happened trade-wise, Brazil is shipping [most of] the soybeans to China, ... and the US is shipping tons, and tons, and tons of corn.”
Despite advancements, Brazil’s agriculture sector continues to face infrastructure challenges, despite investments in ports and other infrastructure, Nicholson noted.
Highway BR-050 leading into the Port of Santos has become a logistical chokepoint. Thousands of freight trucks carrying soy and maize can be stuck for hours to days due to overloaded weigh stations and limited staging capacity, according to EAN Networks. In January, trucks were backed up heading into the port of Miritituba, with some drivers waiting up to three days to reach the port, according to local reporting.
“Approximately a decade ago, Brazil was in a similar situation [to where] they are today — huge crops with inadequate infrastructure/logistics to handle ever increasing production. At the time, there was a public-private partnership to improve Brazil’s infrastructure to move the increasing production onto the world markets," Nicholson elaborated.
He added, “Today, Brazil is in a similar position — record production and an infrastructure that needs investment to maintain Brazil’s position as one of the premier global exporters of grains and oilseeds. While there has been some private investment in port capacity and storage at the farm level, there has been no public-private investment strategy to address the infrastructure/logistics needs of the sector."
