Ag economists warn 40% of farms may need major restructuring to survive

Forty percent of agricultural economists say many U.S. farms will need significant restructuring to remain viable if current crop prices and input costs persist, according to Farm Journal’s May Ag Economists’ Monthly Monitor released June 2.

Just 33% of the economists surveyed believe producers can largely keep their current operational structures under existing conditions. The survey drew responses from 17 of the roughly 80 economists Farm Journal polls each month, and the results point to tightening working capital, weaker commodity prices and mounting financial pressure as crop agriculture moves deeper into a downturn.

Borrowing costs are the sharpest concern. With another interest rate increase expected before year-end, more than half of respondents flagged reduced capital investment as a leading consequence for the sector, and an equal share warned that higher debt-servicing costs could become a “breaking point” for young, beginning and highly leveraged operations. Economists do not expect widespread farm failures, though they said rising rates will increasingly separate well-capitalized farms from those already under stress.

Fertilizer and other input costs again ranked among the indicators economists are watching most closely, alongside commodity prices, export demand, diesel prices, land values, farm loan demand and net farm income. On policy, 60% said year-round E15 ethanol legislation is unlikely or highly unlikely to pass this session.

Some economists see relief later in the cycle. University of Missouri Extension economist Ben Brown said higher interest rates and imported-fertilizer dependence weigh even more heavily on Brazilian growers, which could curb South American output and open export opportunities for U.S. corn and soybeans. Brown expects any price support to emerge late in 2026 and become clearer in 2027.

Source: Pro Farmer