2026 Iowa Agricultural Outlook: The Pressure is Rising

Summary

Iowa’s agricultural economy is several years into a downturn. Following the post-COVID-19 economic boom, corn and soybean prices have retreated while input prices have remained high. Net farm income, a US Department of Agriculture measure of farm profitability, declined year-over-year in Iowa in 2023 and 2024 as row crop farmers bear the brunt of low revenues and high costs. Overall, net farm income in Iowa fell by 53% from 2022 to 2024 (USDA-ERS 2026). While this has not triggered a collapse on the scale of the 1980s farm crisis, the steady tightening is straining Iowa farm businesses and the industries and rural communities tied to them.

Using data-driven economic analysis, this report describes where Iowa’s agricultural economy is today, how it got there, and where it might be going in the future. The report proceeds through eight chapters that look at Iowa’s agricultural economies from different angles. Each of these chapters adds new perspectives and provides specific insights that together paint a comprehensive picture. Primary findings from each chapter are as follows.

The Ag Economy in 2026: A Crop Marketing Perspective
• Iowa row crop farmers are facing their third year in a row in which costs are generally exceeding prices,
underlying the current downturn in Iowa’s agricultural economy.
• Corn and soybean prices are under pressure due to growth in corn and soybean production outpacing
growth in corn and soybean usage.
• Corn (soybean) production costs have increased 37% (36%) since 2021. The largest increases have been in machinery charges and seed, chemical, and fertilizer costs. Crop input costs are expected to remain higher than comfortable due to increases in planted area, broader economic concerns, and ongoing conflicts abroad.

The Ag Economy in 2026: A Livestock Marketing Perspective
• Iowa’s livestock sectors are generally performing well despite ongoing issues such as tight domestic supplies (cattle), soft consumer demand (hogs), and highly pathogenic avian influenza (poultry and eggs).
• Estimated Iowa cattle feedlot monthly returns averaged a record $557/head in 2025.
• Iowa’s livestock sectors remain a key avenue for young farmers to enter the industry and have been a critical diversification during the current agricultural economy downturn. Lower corn and soybean prices have led to cheaper animal feed, and many Iowa crop farmers also raise livestock.

Iowa Agricultural Exports and the Local Impacts of the China Trade War
• In 2024, Iowa ranked second among all states in total commodity export value with $13.7 billion. This export value is made possible by trade agreements and the certainty they provide to commodity producers.
• Corn and soybeans are Iowa’s dominant crops and top crop exports. US corn exports for the 2025 crop year will set an all-time record, while soybean exports are below the recent five-year average due to trade frictions with China.
• Iowa farmers are on the front lines of any trade wars due to their exposure to commodity exports, especially residents in Iowa counties that are generally agriculture-oriented and specialize in commodities directly targeted by retaliation.

Land Markets in Context: What Farmland Values Say About the Farm Economy
• Both nominal and inflation-adjusted average farmland values in Iowa have decreased slightly since 2023.
This differs from both the sharp 1980s crash and the rapid appreciation seen in 2021 and 2022.
• Despite margin pressure in the row crop sector, Iowa farmland values still support farmer balance sheets, collateral positions, and borrowing capacity.
• Forty percent of respondents to the 2025 Iowa State University Land Value Survey expect Iowa land values to decline over the next year, while 82% expect land values to increase over a five-year timeframe.
• If land values further soften, farm operations with a lot of debt or farms relying on land equity to support
operating credit could face greater financial pressure.

The Ag Economy in 2026: A Farm Finance Perspective
• Financial indicators show a deterioration of liquidity and increased working capital needs among mid- and large-size Iowa farms in 2026.
• Farm-level data shows 19% of mid- and large-size Iowa farms in the sample were financially vulnerable in December 2025, more than double that in 2022 (7.7%). But, so far, the proportion of vulnerable farms
remains lower than the late 2010s.
• Despite rising debt loads some farms have shown resilience through cost control and increased revenue.
• Navigating this tighter liquidity often relies on decision tools such as realistic cash-flow budgeting and
analysis to better weather the current storm.

Reading the Credit: What Farm Lending Data Say About Financial Pressure
• We are seeing signs of financial stress emerging in the agricultural sector: rising demand for credit,
increasing repayment concerns, and rising Chapter 12 bankruptcy filings.
• At the same time, there is still healthy farmland equity, healthy lender balance sheets, and low delinquency rates relative to periods in the past, thus making today different from the 1980s farm crisis.
• Proactive producers should do what they can to protect working capital, manage debt, and communicate early on with lenders about financial concerns.

The Statewide Economic Impact of Iowa Agriculture
• From 2020 to 2024, on average, one job in Iowa’s agricultural-related industries supported a total of 1.65 jobs in Iowa’s economy.
• Agricultural-related industries in Iowa contributed $51.5 billion total to Iowa’s GDP annually on average,
amounting to 19% of Iowa’s annual GDP.
• Compared to the average, direct economic output from Iowa’s farmers and other agricultural production
industries was down 2% in 2024, though the indirect and induced economic impacts from production were higher than average.

Long-Term Projections for Corn, Soy, Beef, Pork, and Biofuels
• Long-term modeling projects that global production of corn (soybeans) could increase by 19.9% (17.7%) between 2025 and 2050.
• From 2025 to 2050, US net exports of corn are forecasted to fall slightly while Brazilian net exports are
expected to increase by nearly 20 million metric tons.
• In 2050, though the United States remains the largest ethanol producer, production is projected to increase only 8.8% compared to a 66.7% projected increase in ethanol production in Brazil.
• Projected price changes between 2025 and 2050 appear broadly consistent with gradual expansion in supply alongside persistent demand growth. Expected commodity yield growth over the forecast period is a key price driver.

In sum, Iowa’s agricultural economy is experiencing a prolonged downturn. While today’s conditions do not yet mirror the severity of the 1980s farm crisis, the pressure is mounting, and both short- and long-term challenges loom large. Tight row crop margins, persistently elevated input costs, trade uncertainty, and long-term market shifts are testing farm working capital. Going forward, unofficial estimates for Iowa net farm income project an increase in net farm income in 2025, due primarily to government payments and livestock returns. This is followed by forecasted consecutive decreases in 2026 and 2027 (Jo et al. 2026). Farmers are weathering the downturn for now, but should the current situation persist or worsen, the negative economic effects will be felt throughout rural communities and Iowa’s broader economy.