WASHINGTON, D.C. (RFD NEWS) — Farm profitability tightened further to begin 2026 as falling commodity prices collided with rising production costs, according to the USDA’s latest Agricultural Prices report released February 27. The widening gap between prices received and prices paid signals ongoing margin pressure across U.S. agriculture.
USDA’s National Agricultural Statistics Service reported the January Prices Received Index fell 3.9 percent from December and dropped 10 percent from a year earlier to 116.5. Crop prices drove much of the decline, with the Crop Production Index down 6.7 percent month over month, despite remaining slightly above last year’s level. Lower prices for soybeans, milk, lettuce, and eggs weighed on returns, while cattle, calves, broilers, and apples posted gains.
At the same time, producer expenses continued climbing. The Prices Paid Index rose 3.5 percent from December and stood 8 percent above January 2025 levels. Higher costs for feeder cattle, feeder pigs, taxes, and services offset modest relief from lower diesel fuel, interest, and feed costs.
Operationally, the ratio of prices received to prices paid dropped to 74, down from 79 in December and 88 a year ago — a key indicator showing shrinking purchasing power for farm income.
The report also noted temporary adjustments to cost indexes due to delayed federal inflation data, which will be revised once updated figures are available.
Spring fertilizer applications are just weeks away, but global uncertainty is adding pressure to already tight farm margins. With the Strait of Hormuz — a critical global energy checkpoint — now closed, fertilizer and energy markets are feeling strain at a pivotal time for growers preparing for the planting season.
Kip Jacobs, agronomist with The Mosaic Company, joined us on Tuesday’s Market Day Report to discuss how potential supply disruptions could impact fertilizer markets and why protecting input investments is especially important this spring.
In his interview with RFD NEWS, Jacobs explained that market volatility underscores the need for strong nutrient management strategies. He emphasized the importance of nutrient use efficiency — ensuring crops maximize every pound of applied fertilizer — as growers look to stretch dollars further while maintaining yield potential.
Jacobs also discussed how incorporating a biological crop nutrition product into spring fertilizer programs may help improve nutrient availability and uptake, ultimately helping protect the overall investment in fertilizer. While some producers may hesitate to add additional products during a tight-margin year, Jacobs noted that improving efficiency can help safeguard return on investment.
As growers finalize spring fertility plans, Jacobs encouraged them to focus on maximizing performance from every nutrient applied and to consult trusted agronomic resources for guidance.
