LUBBOCK, Texas (RFD NEWS) — Parts of rural America tied to row-crop agriculture are showing recession-like conditions, even as the broader U.S. economy continues to expand.
USDA data show farm income has pulled back from recent highs, with lower crop receipts and tighter margins weighing on operations. Federal Reserve district reports from Chicago, Kansas City, and Minneapolis all point to weaker farm earnings, rising loan demand, and increased financial stress in crop-heavy regions. Farm bankruptcies also increased in 2025, signaling a deeper strain in some operations.
Lower commodity prices combined with still-elevated input costs have squeezed profitability, particularly for corn, soybean, and wheat producers. That pressure is filtering through rural economies, impacting equipment purchases, land rents, and local agribusiness activity tied to farm spending.
This pattern has occurred before, in which agriculture slows first, and rural communities follow, without always triggering a broader national recession. Today, economists still place U.S. recession odds near one-third, suggesting the national economy remains more resilient than farm country.
Rural conditions will likely depend on commodity prices, interest rates, and export demand as the year develops.
While volatility is pressuring margins more than ever, some producers could see new tax savings following a recent court decision that makes more agricultural operations eligible for the Research & Development Tax Credit.
Farm CPA Paul Neiffer joined us on Thursday’s Market Day Report to break down what this ruling means for farmers.
In his interview with RFD NEWS, Neiffer explained that the decision clarifies how farm testing, experimentation, and record-keeping activities can qualify as R&D, giving more producers the ability to claim the credit. Farmers should maintain thorough documentation of these activities to maximize eligibility.
The potential credit can be significant and, in some cases, may be applied retroactively, allowing farmers to claim benefits for previous tax years. Neiffer advised that while taking the full credit can be advantageous, each operation should evaluate its individual situation with a tax professional to ensure compliance.
