Rural America is suffering an economic crisis as crop prices plunge

On Thursday, the National Corn Growers Association raised alarms about “the economic crisis hitting rural America, as commodity prices drop at a time when input costs remain at near-record highs.”

Corn prices have plunged more than 50% from their 2022 peak, while production costs are down just 3% in that span, translating to a loss of 85 cents per bushel, the NCGA said, adding that the outlook for next year is worse with even lower prices and higher costs.

The NCGA called on Congress and the Trump administration to boost demand, including via higher blends of ethanol and increased foreign market access.

A week before that, the American Soybean Association sent a letter to Trump, warning that “U.S. soybean farmers are standing at a trade and financial precipice.”

The group asked that Trump prioritize soybeans in trade talks with China, seeking major purchase commitments as well as the removal of Beijing’s duties on the U.S.

“Historically, the U.S. was the provider of choice for Chinese customers,” the letter said. “However, due to ongoing tariff retaliation, our longstanding customers in China have and will continue to turn to our competitors in South America to meet their demand, a demand Brazil can meet due to significantly increased production since the previous trade war with China.”

With harvest season fast approaching, the association added that China hasn’t purchased any U.S. soybeans for the months ahead.

The longer negotiations with China drag on without a trade deal—and the deeper farmers go into the fall— the more pain they will feel, it said.

Like the corn growers, the soybean growers also cited sharply lower prices and high costs. Since peaking in 2022, soybean prices have fallen about 40%.

“Soybean farmers are under extreme financial stress,” the group said. “Prices continue to drop and at the same time our farmers are paying significantly more for inputs and equipment. U.S. soybean farmers cannot survive a prolonged trade dispute with our largest customer.”

Farm incomes, credit conditions deteriorate

The bleak picture of the agricultural economy was echoed by the Federal Reserve’s latest survey of farm financial conditions. It found that weaker income has reduced liquidity for farmers, boosting demand for financing.

At the same time, credit conditions deteriorated with roughly 30% of respondents in the Chicago Fed and Kansas City Fed districts reporting lower repayment rates versus a year ago, while the Minneapolis Fed region’s share was around 40% and the St. Louis Fed’s was 50%.

To be sure, U.S. farmers are set to receive substantial help. After Trump launched his latest trade war earlier this year, the administration and lawmakers began talking about a bailout for farmers in April, similar to how they received a bailout during Trump’s first term, when he waged a trade war against China.

The One Big Beautiful Bill Act that was signed in July included about $66 billion in agriculture-focused spending. The vast majority, about $59 billion, is earmarked for farm safety-net enhancements, according to the American Farm Bureau Federation.

In addition, other trade deals Trump has negotiated should see countries elsewhere in Asia step up purchases of U.S. crops.

For example Indonesia and Bangladesh have agreed to boost buying under their agreements, and sources told Reuters this past week that Vietnam, the Philippines and Thailand may increase feed grain purchases.

“There have been productive trade discussions which present an opportunity for the U.S. to strengthen its access to markets in our region,” said Timothy Loh, the U.S. Soybean Export Council’s regional director for Southeast Asia & Oceania, told Reuters.

“We are anticipating higher demand for U.S. products such as soymeal and other U.S. agricultural exports into Southeast Asia.”