NASHVILLE, TENN. (RFD NEWS) — Record harvests, federal aid payments, and strong cattle prices are offering mixed signals for U.S. agriculture as farmers head into the 2026 growing season. While some producers are finally seeing relief checks arrive, new data show many farm operations — particularly in the crop-heavy Upper Midwest — remain under significant financial pressure.
Across the country, farmers are navigating tight margins, rising credit stress, and uncertainty about whether short-term assistance can compensate for deeper structural challenges in the farm economy.
Bridge Payments Arrive as Cash Flow Tightens
Many U.S. farmers are keeping a close watch on their bank accounts because the U.S. Department of Agriculture (USDA) Farmer Bridge Assistance Program payments could begin depositing as soon as this weekend.
Signups for those bridge payments opened Monday, and Ag Secretary Brooke Rollins says farmers likely will not have to wait long to get their share. She expected direct deposits to begin as soon as Saturday. Rollins says the process was streamlined, allowing folks to get the money as quickly as possible.
If you qualify for the assistance and have not yet applied, you have time. The enrollment window closes April 17.
Farmers are getting ready for planting season, and the USDA is already out with acreage estimates for the year, but American Farm Bureau Federation economist Faith Parum warns that many farmers are approaching the season with caution.
“So these are predictions and projections that they’ll continue to evolve as the USDA gets more and more data,” Parum said. “What we’re seeing right now, maybe, is a cautious farm economy. Producers are still struggling [with] those tight margins across all of our major row crops, and so until we see either higher commodity prices or lower production costs, we’ll still see a struggling farm economy.”
The USDA is calling for more soybean acres next year, which the Farm Bureau says could mean expanded crush capacity. We should have a better idea of what to expect next month when the USDA drops the prospective plantings report.
Strong Harvests Fail to Lift Farm Finances
Record crop production offered little financial relief to Upper Midwest farmers as incomes declined and credit stress increased late in 2025.
According to the Minneapolis Federal Reserve’s fourth-quarter Ag Credit Survey, 64 percent of lenders reported lower farm incomes compared with a year earlier, despite record national corn production of 17 billion bushels and strong soybean output. Bankers cited low commodity prices and elevated input costs as the primary drivers of tighter margins. Livestock producers, particularly in Montana and the Dakotas, remained comparatively profitable due to strong cattle markets.
Tighter cash flow pushed loan demand higher, with 43 percent of lenders reporting increased borrowing needs. Repayment rates weakened, and renewals and extensions rose, signaling stress in working capital. Interest rates on operating and machinery loans declined late in the year, offering modest relief.
Land values edged higher overall. Nonirrigated cropland rose 0.7 percent district-wide, irrigated land gained 1.5 percent, and ranchland jumped 12 percent. Gains were strongest in South Dakota and Minnesota, while Wisconsin and Montana saw slight declines.
Strong yields cannot offset weak crop prices. Lenders expect farm incomes to weaken further in early 2026.
Specialty Crop Relief and Need for a New Safety Net Strategy
According to USDA Deputy Undersecretary Brooke Appleton, the department is also set to roll out bridge payments for specialty crop growers as soon as Sunday.
“In an effort to tailor much-needed trade relief assistance to the unique needs of the specialty crop producers, we solicited feedback from the specialty crop industry and stakeholders over the last couple of months in order to better evaluate the unique specialty crop market impacts and economic needs of these producers,” Appleton said.
You can read the list of specialty crops HERE. The deadline to apply is March 13th, and you must report your 2025 acres with payment rates based on planted acres.
Despite the promised federal aid payments finally on their way, farmers are pushing for an increased safety net.
The National Farmers Union (NFU) says the current “fence-row to fence-row” model is not working, leading to increased reliance on temporary, ad hoc programs.
“Over the last 10 years, we’ve had so many ad hoc programs because the safety net’s just not there for what the farmers need,” said NFU Vice President Jeff Kipley. “They give you short windows. You don’t know the rules. You don’t know if you qualify. Normally, you’re relying on your crop insurance agent to tell you what to say and where to go. And you don’t even know what you really signed up for.”
NFU is advocating for a voluntary program, “Inventory Management Soil Enhancement Tool,” or IMSET. It would allow farmers to set aside up to 20 percent of their acres in exchange for an increased reference price on their active acres. A move NFU says could save small family farms.
Cattle Profits Mask Structural Challenges
As the U.S. cattle herd contracts, some feedlot owners across the country are starting to put up the white flag and close down shop. Dr. David Anderson, a livestock economist at Texas A&M, told RFD NEWS that the extended southern border closure to feeder cattle imports — a biosecurity precaution to prevent the outbreak of New World Screwworm in Mexico from crossing over to U.S. soil — now extending over a year — is putting pressure on many operations.
“Whether we’re talking feedlots or packing plants, we really start with the number of animals, and with a declining herd, again — you know, the lowest in decades and decades — and the border closure,” Anderson explained. “Mexican feeder cattle are a large part of our cattle on feed in Texas and the Southwest, and so just that lack of animals and the border closure, you know, it’s having an effect. We’re seeing it losing some infrastructure, losing some feedlots.”
The latest feedlot casualty is Lubbock Feeders, which announced last week that it will close down later this year after operating for seven decades. Feedlot managers told Everything Lubbock it was a tough decision, but say there have been a number of economic and regulatory challenges impacting their business.
“This feedlot, I don’t think it’s going to be the last one,” Anderson warned. “There’ll be some more, and more to come.”
While cattle producers are seeing record profits, University of Illinois Extension beef educator Travis Meeter warns that buying expensive breeding stock right now could carry long-term risks.
“If you are going to buy a high-priced cow, you need to sell a high-priced cow. So, if we are doing that and looking at cow depreciation and that curve, the significant depreciation that occurs is late in life, and so we just have to manage that,” Meeter said. “And we know if you buy a cow for a high price at the point of the lowest inventory, then waiting for that cow to be eight, nine, or ten years old and sell her at the point where we’ve recovered the most numbers, and sell at the highest inventory of the cycle, that’s a great way to lose money. But if we’re cognizant of appreciation and depreciation, we can keep these heifers. We can turn them into bred heifers that are profitable next year. We can make young cows, and we can sell good-priced young cows and still be profitable here in the years to come.” Meeter says producers can avoid depreciation traps by developing and selling older cows while their market values are high. That is to say, buying a high-priced heifer can be offset by selling an older but still productive cow.”
Consumer Signals Add Another Variable
The USDA numbers out this week show beef stocks are relatively unchanged. At the same time, frozen vegetable stocks declined. A senior analyst with Barchart tells us those figures caught his attention.
“First, an economic question for what that’s worth, has the U.S. consumer finally reached the breaking point where they’re going to start backing away from high-priced beef? And as you pointed out, beef continues to roll higher. Are they backing away from that? Is this an economic signal we should pay attention to? Or two, a little more, you know, maybe not as serious a note. Is this indicating the U.S. is becoming vegetarian? I have my doubts about this. But again, certainly something to watch in the numbers.”
USDA’s latest cold storage numbers showed all beef stocks were unchanged from the previous month, despite an 8-percent month-over-month decrease in cattle marketings. During the same period, total vegetable stocks fell by eight percent, with fruit stocks dropping by four percent.
Just yesterday, the USDA dropped its latest Food Price Outlook for 2026, forecasting a shocking 3.1-percent increase in food prices over the next year. The USDA noted that record-high prices for beef and veal would likely persist, but said consumers could once again feel some relief with egg prices.
Poultry Pressured by Avian Flu Again After USDA Forecasts Egg Price Drop
The current outbreak of Highly Pathogenic Avian Influenza (HPAI) has been ongoing for four years, beginning in January 2022. Now, we are hearing about a rash of commercial outbreaks in Pennsylvania.
While meeting with farmers and ag officials this week, Pennsylvania Governor Josh Shapiro says the state’s ag industry is now in “Crisis mode.” He says that since the start of this year, more than 7 million birds have been culled in the state because of the virus.
Shapiro says that more than half of the bird flu cases are in the country. The governor’s office adds that since the start of 2022, Pennsylvania has lost more than 14 million birds. To help, the state is hiring more personnel to beef up its response.
In Feb. 2026 alone, there have been 15 commercial flock outbreaks in the state. However, additional commercial outbreaks were reported in Georgia, South Dakota, Kansas, Mississippi, California, Indiana, Maryland, and South Carolina.
Bottom Line
From bridge payments and planting decisions to credit stress and consumer demand, farmers are entering 2026 with little margin for error. Record production may look good on paper, but for many producers — especially in the Upper Midwest — profitability remains elusive.
Federal assistance may help stabilize cash flow in the short term, but lenders and producers alike are signaling that without stronger prices or structural reform, financial pressure is likely to persist.
