A report from RaboResearch indicates that tariff announcements made by the US government on ‘Liberation Day’ in early April have introduced significant uncertainty for US farmers as they prepare for the 2026 season. The financial instability facing many producers exacerbates these concerns.
Experts agree that the recently imposed tariffs are unlikely to impact the 2026 season directly but could threaten the 2027 season if current trade policies persist. The report notes that clarity around the continuation of these tariffs remains elusive.
Looking forward, US farmers are expected to encounter rising production costs, primarily driven by increasing fertilizer prices on the international market. The constrained global supply has heightened concerns regarding phosphate prices, particularly for monoammonium phosphate (MAP), which is currently considered unaffordable. RaboResearch’s affordability index for MAP has fallen to -0.68, marking the lowest level recorded since 2010.
Projections for the 2026 season suggest soybean profitability to be around 13 percent, a decrease of roughly 200 basis points from the previous year due to trade uncertainties and cost fluctuations. For corn, the analysis forecasts a decline in operating margins from approximately 13 percent in 2025 to about 7 percent in 2026.
At these margin levels, overall profitability is expected to be negative when accounting for total costs. Consequently, US farmers may rely on government support through the OBBBA (One Big Beautiful Bill Act) program to meet their financial obligations.
The report also highlights ongoing challenges for global crop margins, with producers across major agricultural regions facing declining commodity prices alongside persistent input cost pressures. The agricultural landscape in 2025 is complicated further by geopolitical tensions and new tariffs.
While some relief may come in crop protection costs, overall operating expenses are on the rise, presenting significant difficulties for soybean, corn, and other crop farmers. Despite experiencing tighter margins, farmers are expected to continue investing in their fields to sustain or increase output levels, with projections indicating record crops for corn and soybeans, particularly in top-producing regions.
Bruno Fonseca, Senior Analyst for RaboResearch, noted that these record production levels are putting downward pressure on commodity prices, despite a decline in stock levels.
The report also reveals that corn, wheat, and oilseed farmers in 2025 are achieving robust outputs. The top three global corn producers—Brazil, China, and the US—are projected to yield record-high crops, while global oilseed and wheat outputs are set to reach records for the sixth consecutive year. This culminates in a situation where record production and abundance are pressuring commodity prices downward.
Conversely, the report emphasizes that bullish market fundamentals continue to apply, particularly for corn and wheat. Global corn stocks have been declining since peaking in the 2016/17 season, and wheat stocks have been on a downward trend since 2019/20. The stocks-to-use ratios for both corn and wheat are at their lowest levels since the 2012/13 and 2014/15 seasons, respectively.
Fonseca remarked that, while significant production in leading areas like Brazil and the US is saturating the market, keeping prices suppressed in the short to medium term, persistently high input costs will render profitability in the grain and oilseed industry challenging.
Published on September 19, 2025.
