URBANA, Ill. (RFD-TV) — Grain farms are coming off their weakest income year in decades. Still, they are not yet facing a 1980s-style crisis, according to a new farmdoc daily analysis from the University of Illinois. Using Illinois Farm Business Farm Management data back to the 1990s, economists show 2024 farm operating income averaged a loss of $15,000, the lowest on record, after peaking at $339,000 in 2022.
Low prices and stubborn costs pushed the operating expense ratio to 0.83 in 2024, meaning operating costs consumed 83% of gross returns — the highest since 1990. Yet most farms ended 2024 with solid balance sheets: average working capital was $372,000, the current ratio was 2.47, and the debt-to-asset ratio was 0.187, which is still considered very strong.
The authors warn that another year or two of weak profitability will erode that strength. Without higher grain prices, farms will need to reduce high input costs — fertilizer, seed, pesticides, and, especially, cash rent. Younger, heavily rented operations face the most pressure, even as ad hoc payments temporarily cushion returns.
Compared with the 1980s, the study notes lower leverage, stronger financial monitoring, and more conservative borrowing, which together make a broad bankruptcy wave unlikely. Instead, lenders are expected to tighten credit, forcing cost adjustments and, in some cases, orderly exits.
The agriculture workforce remains strong and diverse, offering meaningful pathways for students pursuing careers that support the food and farm economy.
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Supplemental Disaster Relief Program Stage Two will disburse around $16 billion, approved by Congress last year. Sign-ups begin Monday, and producers have until April to return applications.
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Row crop losses in 2025 are outpacing last year. With no disaster aid yet approved, many operations face a tough financial bridge to 2026 even as Farm Bill improvements remain a year away.
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Farmland values remain stable, but weakened credit conditions and lower expected farm income signal tighter financial margins heading into 2026.
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Ethanol exports are expanding on strong demand from Canada and Europe, while DDGS shipments remain broad-based and supportive for feed markets.
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