08/26/2026
Net Farm Income Drops 53%
Iowa’s agricultural economy is several years into a downturn, with net farm income falling 53% from 2022 to 2024.
Record-high input costs, depressed grain markets and trade uncertainty put mounting pressure on farmers, rural businesses and communities, according to a new joint study by the Iowa Farm Bureau Federation (IFBF), Iowa State University (ISU) and the Iowa Bankers Association during Iowa Farm Bureau’s Economic Summit.
The study, 2026 Iowa Agricultural Outlook: The Pressure is Rising, finds that negative margins are increasing farmer financial vulnerability across the state. Iowa’s crop farmers are facing a third consecutive year in which costs are generally outpacing prices.
Corn and soybean production costs have increased 37% and 36%, respectively, since 2021, with the largest increases tied to machinery charges and seed, chemical and fertilizer expenses. Crop input costs are expected to remain uncomfortably high due to broader economic uncertainty and ongoing conflicts abroad, adding further pressure to already-tight margins.
“The clearest warning sign is a steady tightening across the farm economy with impacts felt well beyond the farm gate,” said Christopher Pudenz, Ph.D., Iowa Farm Bureau economics and research manager. “Agriculture remains one of Iowa’s largest economic drivers, accounting for roughly one-fifth of the state’s annual GDP, so a prolonged downturn can quietly weaken the workforce, erode the tax base and slow commerce across rural communities.”
The percent of financially vulnerable farms rose from 7.7% in December 2022 to 19% in December 2025. Since farmers rely on yearly operating notes to run their operations, this financial pressure leaves less room for weather, market or policy surprises.
Resilient Iowa farmland values continue to support farmer balance sheets, collateral positions and borrowing capacity. According to the 2025 ISU Land Value Survey, 40% of respondents expect Iowa land values to decline over the next year, while 82% expect land values to increase over a five-year timeframe, reflecting both near-term pressure and longer-term confidence in Iowa farmland.
Several Iowa livestock sectors have provided rare opportunities for positive returns, helping offset deeper losses in parts of the farm economy. The cattle market, in particular, has been one of the lone bright spots in Iowa agriculture, with record estimated monthly cattle feedlot returns in 2025.
Submitted by Darcy Maulsby