Agricultural economists are projecting that the downturn in the U.S. farm economy will level off as the calendar turns to the new year, signaling a potential pause in the financial slide producers have faced. However, a recent report from AgWeb said that stabilization should not be confused with a full recovery for agriculture. The December Ag Economists’ Monthly Monitor indicated that overall monthly sentiment is gradually strengthening, but significant hurdles remain in place, particularly for row crop producers who continue to grapple with tight margins.
Reports indicate the prevailing tone among economists is one of “cautious optimism,” reflecting modest improvements in outlook without expectations for a dramatic turnaround. Most economists surveyed do not believe 2026 will deliver a strong rebound unless there is meaningful relief from persistently high input costs or a noticeable increase in commodity demand from domestic or international markets. Fertilizer, fuel, and other production expenses remain elevated compared to historical norms, weighing heavily on profitability despite some improvement in price stability.
Survey results show that 54 percent of economists said the farm economy is better than it was a month ago, suggesting incremental progress. When compared to conditions a year earlier, responses were more mixed, with 42 percent saying the economy is worse and 33 percent indicating conditions are better than last year. Looking ahead to the next 12 months, expectations remain restrained. Forty-six percent of respondents anticipate economic conditions will remain largely unchanged, while 38 percent expect some improvement. Meanwhile, 15 percent believe conditions could deteriorate further, underscoring the uncertainty that continues to surround the agricultural sector as it heads into 2026.