Rising Commodity Prices Bring Mixed News for Farmers

Agricultural economist Nick Paulson is cautiously optimistic about the revenue outlook for farmers in 2026 and '27, but notes that escalating input costs will continue to tighten margins. The University of Illinois expert cites rising commodity prices as a positive factor, with corn expected to fetch close to $5 per bushel in both years, while beans are projected to reach or exceed $12 per bushel.

However, Paulson warns that production costs are increasing, particularly in the fertilizer and fuel categories, which have risen due to the impact of the Iran conflict. He suggests that farmers can mitigate these costs by prioritizing profitability over yield maximization and making careful capital purchases decisions.

Paulson notes that while input costs have increased significantly over the past 25 years, average returns have not kept pace, and there is no indication that this trend will change in the future.