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.
Mold damage is tightening China’s corn supplies, supporting higher prices and creating potential demand for alternative feed grains in early 2026.
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Joe Peiffer with Ag & Business Legal Strategies advises farmers on end-of-year financial planning, including preparing records, avoiding common credit mistakes, and evaluating equipment purchases for 2026.
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