·
Farm
bankruptcies are rising rapidly:
o 2023: 150
o 2024: 234
o 2025: 340 — 45% increase
o 2026: 208
in January–June alone, putting the full-year total on track to
exceed 400.
·
Farm
income is deteriorating:
USDA Economic Research Service (ERS) projects inflation-adjusted Net Farm Income (NFI) to fall 5.5% in
2026 to $158.4 billion.
·
Costs
are rising:
Inflation-adjusted farm production expenses are projected to increase by $7.1 billion (1.5%) in
2026 compared with 2025.
·
Three
major pressures are identified:
1.
Tariffs: Higher duties on farm machinery, steel
products, fencing, tools, irrigation equipment, pesticides and other
agricultural inputs are increasing production and maintenance costs.
2.
War-related
costs: The
Iran conflict has pushed fertilizer
prices about 20% higher than January 2025 levels. Diesel has
risen from about $3.70/gallon
to $6.30/gallon, adding roughly $4,000 per farm annually in production
costs.
3.
Lost
export markets:
Retaliatory tariffs and trade tensions have sharply reduced U.S. agricultural
exports to major customers, particularly China
and Canada.
·
China
has been the biggest setback:
o U.S. agricultural exports to China fell
from $24.4 billion in 2024
to about $8 billion in 2025.
o Soybean exports fell from $12.6 billion to $3.0 billion.
o Wheat: $440 million → $16 million.
o Beef: $1.6 billion → $0.5 billion.
o Pistachios: $842 million → $33 million.
o The 2026 tariff truce has recovered
roughly $2 billion,
but exports remain well below previous levels.
·
Canada
is also weakening as a market: U.S. fresh-produce exports to Canada are
down about 10% ($400
million) in 2026, while sales of wine, beer and liquor have
fallen by about two-thirds.
·
U.S.
agriculture is highly export-dependent: Foreign customers account for
approximately 20% of U.S.
farm receipts. China, Canada and Mexico together normally
represent around half of U.S. agricultural exports.
·
Regional
bankruptcy concentration in 2026: Through June, reported farm failures
included 25 in California,
17 in Arkansas, 14 in Indiana and 12 in Texas.
·
Investment
is also being affected: Rural bankers report that tariffs on
steel/aluminum and uncertainty created by the Iran
conflict are making farmers reluctant to purchase new agricultural equipment.
·
A
notable California example: Tariffs on metals and cans contributed to
the collapse of a major Del Monte peach cannery, reportedly affecting
approximately 74,000 tons
of annual peach purchases, around $500 million in farm receipts,
and 420,000 peach trees.
The
U.S. farm sector is facing a three-way
squeeze—falling farm income, rising input costs and shrinking export markets.
Emergency government aid of about $19.5
billion has only partly offset the deterioration. If these
pressures persist, farm
bankruptcies could exceed 400 in 2026, more than doubling the
2023 level.
[ABS
News Service/08.10.2026]
U.S. Farm Income
Down $9 billion This Year; Expenses up $5 billion.
The Numbers: Farm bankruptcies* –
|
2026 |
>400? |
|
2025 |
340 |
|
2024 |
234 |
|
2023 |
150 |
|
2022 |
185 |
*National Center
for Agricultural Law. The Center counts 208 farm
bankruptcies from January to June 2026.
What They Mean:
The National Agricultural
Law Center’s sad tally finds farm bankruptcies up 45%
in 2025, and (through June) another 11% this year: 25 farm failures in California,
17 in Arkansas, 14 in Indiana, 12 in Texas, and so forth. Data from the Department
of Agriculture’s Economic Research Service glumly explains:
“Inflation-adjusted NFI* is expected to decrease
by 5.5 percent from 2025 to $158.4 billion in 2026. Farm production expenses are
projected to remain comparable to the 2025 level, increasing by $7.1 billion (1.5
percent) in 2026, after adjusting for inflation."
* NFI: “Net Farm Income” =
total farm income minus total farm expenses
In sum: Per ERS,
after adjustments for inflation, America’s 1.9 million farms will cost $7 billion
more to run this year than in 2025, while their 3.4 million operators will earn
about $9 billion less.
What’s happened?
Farm incomes and costs often vary for
reasons that are hard to change and sometimes beyond human control: weather patterns,
production booms overseas, that sort of thing. This year’s rural stress is different
— U.S. government decisions in 2025 and 2026 simultaneously raised farm costs and
diminished farmers’ income. Three points:
Direct tariff costs:
Since February 2025, Trump administration tariff increases have been raising
costs. The Commerce Department’s list of “national security”
tariffs has shifted and changed over the past year, but currently puts new tariffs
of 15% on plows and harvesters, 25% on simple screws and
bolts, 10% on wood, and 50% on barbed wire fencing. The White House’s “IEEPA” tariffs
of last year, and their recent “forced labor law” replacement,
added tariffs ranging from 10% to 30% on hoes, tools, irrigation equipment, pesticides,
and lots of other supplies. So fencing, repairs, harvesting
and irrigation, weeding and spraying for bugs, etc., all cost more. This, in turn,
as Creighton University’s September “Rural Mainstreet Index” survey of rural
bankers in 10 western and midwest states concludes, brings
under-investment in equipment:
“The 2026 conflict
in Iran and tariffs on imported steel/aluminum have created
even more volatility and reluctance among farmers and ranchers to purchase new farm
equipment."
And some costs
are immediate. In California, as the Sacramento Bee reports, last year’s
50% tariffs on metals and cans contributed to this summer’s collapse of Del Monte’s Maryville
peach cannery, which bought about 74,000 tons of peaches annually.
The consequence has been loss of about $500 million in farm receipts, and the destruction
of 420,000 peach trees.
War costs: Meanwhile, this
year’s war with Iran has pushed fertilizer prices up about 20% as compared with
the rates as of January 2025, and diesel fuel prices — diesel
runs tractors, harvesters, irrigation equipment, trucking — from $3.70/gallon 18
months ago to $6.30/gallon today. That means, on average, about $4,000 a year in
extra production costs per farm. Disproportionate pressure on rural family budgets
as well: Federal Reserve Governor Lisa Cook notes transport accounts
for a quarter of rural household expenses.
Lost export income: Countries on
the receiving end of tariffs sometimes hit back, and American farmers are uniquely
exposed when they do, since the U.S. is the world’s top agricultural exporter. Per
the WTO, American farms and ranches sell about 11% of the world’s $2.4 trillion
in worldwide exports, second only to the 27 combined EU countries — and relies on
sales to foreign customers for about 20% of farm receipts. Last year’s totals range
from 156 tons of California grapes shipped to sunny Fiji in the South Pacific, through
$10,000 worth of biscuits to the North Atlantic's stormy Faroe Islands, and 159
tons of sorghum to Eritrea on the Red Sea. Three countries in particular — China,
Canada, and Mexico — usually account for half of U.S. annual farm exports. A top-six
list as of 2024 puts this in context:
|
Market |
Export Value |
Top Products |
|
World |
$176.5 million |
Soy, corn, beef, nuts, dairy |
|
Mexico |
$30.2 billion |
Corn, pork, dairy, soybeans, poultry |
|
Canada |
$29.6 billion |
Bread & pastas, fresh fruit, vegetables |
|
China |
$24.4 billion |
Soybeans, beef, cotton |
|
All Other |
$92.3 billion |
__ |
China and Canada
have been particular tariff targets, and both — China especially — have responded
in kind. The $24 billion in exports in 2024 to China fell to $8 billion last year,
with soybean sales down from $12.6 billion to $3.0 billion, wheat $440 million to
$16 million, beef $1.6 billion to $0.5 billion, pistachio nuts $842 million to $33
million. This year’s tariff ‘truce’ has added back about $2 billion, but the totals
still remain far below those of earlier years. Most sales to Canada (the second-largest
U.S. farm customer, and top for fresh fruit and vegetables, eggs, wine, and juices)
held up through the summer, but not all. The fresh produce sales are down 10% this
year ($400 million), and wines, beer, and liquor by two-thirds. As to the rest,
the Canadian government is pretty actively trying to find new sources, and will
likely keep doing so unless Congress reverses the Trump administration’s mystifying
lurch into a northern border “trade war.”
So: Income down,
operating costs up, and a $19.5 billion jump in emergency aid only partially closing
the gap. That can’t go on indefinitely. In the extreme cases, as the Agricultural
Law Center’s bankruptcy tallies suggest, it stops pretty
suddenly.