U.S. farm income is under immense pressure as input costs have increased dramatically while crop prices have fallen sharply – resulting in margins that have been at or below break-even for several consecutive years.

Farmers urgently need economic assistance, according to a new Market Intel report from the American Farm Bureau Federation.

The key takeaways of the report are:

• Farm financial stress is severe and persistent. Margins are below break-even for many crops, working capital has been eroded, Chapter 12 farm bankruptcies are on the rise and, according to a recent survey of commercial lenders by the American Bankers Association, profits will remain elusive going into 2026.

•​​​​​​​ Trade losses have compounded economic pressures. Farmers have experienced multibillion-dollar export declines in some of their largest trading markets, including China. Trade frameworks have been announced, but increased export volumes have yet to materialize and cash prices remain at or below levels seen in early 2025.

•​​​​​​​ Without action, long-term viability is at risk. Additional financial support is critical to offset trade losses and provide a bridge until farm bill enhancements from the “One Big Beautiful Bill Act” go into effect. This will stabilize the farm economy, sustain rural economies and maintain affordable food prices.

“Input costs have increased dramatically over the last few years — up in some cases 30%, 40%, 50% — but at the same time, commodity prices have come crashing down. For many crops they’re at historically low levels,” said John Newton, AFBF vice president of public policy and economic analysis.

“Trade has slowed, and the effect is we’ve had margins that have been at or below break-even for many crops and specialty crops for many years in a row, and that’s starting to impact farm financial conditions.”

Trade losses heightened the challenges in an already difficult economic environment.

“As the Chinese backed out of the market, that put further pressure on prices. As farmers were harvesting a crop, many of them didn’t have storage and had to sell at harvest-time lows,” Newton said.

“So, even though we’ve got a framework in place and the Chinese are starting to buy product, for a lot of growers, the economic benefits of these frameworks may come too late.”

While some help was made available in the “One Big Beautiful Bill” signed by President Donald Trump on the Fourth of July and the American Relief Act, which was signed by President Joe Biden last December and mainly served as yet another one-year extension of the 2018 farm bill, that assistance won’t reach farmers until some time next year.

The U.S. Department of Agriculture has pledged $12 billion in economic support to help offset trade losses, Newton said.

“We hope to see details of that in the next few weeks, but the ‘One Big Beautiful Bill,’ while it made a historic investment in farm bill risk-management programs, those benefits won’t materialize on the farm for over a year,” he said.

Ethanol Could Fuel Economic Rebound

At a time when the farm economy is facing a downward turn, farmers are looking for expanded market opportunities. Increased biofuel production could be one avenue to boost farm revenue and support the entire rural economy.

One simple solution for expanding biofuel demand would be to allow for year-round E15 in American gas pumps.

Most gasoline sold across the country is blended with 10% ethanol, but 15% blends are becoming increasingly common, particularly here in the Midwest, where most corn is grown. By the way, E15 gasoline generally costs at least 10 cents less a gallon than E10 gasoline.

But the Environmental Protection Agency has previously prohibited its sale during the summer over concerns that its use during that driving season could increase smog.

For the economic and energy security benefits of E15 to be fully realized, the marketplace needs long-term certainty — and there’s a straightforward path to make this possibility a reality.

Right now, the ethanol industry relies on the EPA to grant a series of short-term waivers to sell E15 in the summers.

A congressional fix to get year-round E15 that does not rely on those emergency waivers would allow producers to have some stability and know that they will be able to blend ethanol all year.

James Henry is the executive editor of Illinois AgriNews and Indiana AgriNews.