USDA Crops Rebound but Hormuz Shocks Keep Farmers Underwater

A new report from the American Farm Bureau Federation reveals that crop revenue projections are mixed but mostly improved, with per-acre revenue estimates for corn and soybeans increasing in September's World Agricultural Supply and Demand Estimates (WASDE).

However, peanuts, cotton, wheat, and sorghum revenue projections fell from USDA's May estimates. The report attributes this to post-Hormuz input cost shocks, including a 45% surge in diesel prices since the spring.

The increased costs are expected to continue as farmers enter harvest season, with total production expenses projected to reach nearly $500 billion in 2026. Fertilizer expenses for 2026 are projected at a record $40 billion, up 15%, or $5 billion from the previous year.

Despite higher revenue projections for some crops like corn and soybeans, breakeven above total costs remains elusive for all major row crops for the 2026/27 marketing year. This marks four consecutive years of returns below total costs in a record-high input cost environment.