Wed, 15 Apr 2026 12:09:11 -0500WeeblyWed, 15 Apr 2026 13:17:35 GMThttps://www.fairmontphotopress.com/kent-thiesse/2025-farm-program-payment-estimates-lowered-after-wasde-reportThe April 9 USDA World Supply and Demand Estimates (WASDE) report did not include any significant changes to supply or demand, compared other recent WASDE reports. The 2025-26 projected ending stocks in the April report for corn and soybeans remained the same as the estimates a month earlier, while the wheat ending stocks were increased slightly. The expected 2025-26 market year average (MYA) prices for corn, soybeans and wheat were all increased slightly from the March price projections. This is important because it lowers the estimates for the potential 2025 PLC and ARC-CO payments, which will be paid in October of 2026. These payments are very important this year for cash flow planning purposes. 
CORN
The latest WASDE report estimates the 2025-2026 U.S. corn ending stocks at 2.13 billion bushels, which would be an increase 37 percent from a year earlier. The 2025-26 corn ending stocks compare to a carry-out levels of 1.55 billion bushels in 2024-25, 1.76 billion bushels in 2023-24, 1.36 billion bushels in 2022-23 and 1.38 bushels in 2021-22. The corn stocks-to-use ratio for 2025-26 is estimated at 12.9 percent, which compares to ratios of 10.2 percent in 2024-25, 11.8 percent in 2023-24, 9.9 percent in 2022-23 and 9.2 percent in 2021-22. The current stocks-to-use ratio is still below the high corn stocks-to-use ratios of 14.6 percent for 2018-19, and 14.5 percent in 2017-18. The rather high projected carryout level could limit potential for significant rallies in the cash corn market in the coming months, especially if there are favorable weather conditions in the 2026 growing season. 
USDA is currently estimating the U.S market year average (MYA) corn price for the 2025-2026 marketing year at $4.15 per bushel, which is an increase of $.05 per bushel the March estimate. The projected 2025-26 MYA price compares to recent national average prices of $4.24 per bushel in 2024-25, $4.55 per bushel in 2023-24, $6.54 per bushel in 2022-23, and $6.00 per bushel for 2021-22. The 2025-2026 MYA price estimate for corn and soybeans is the expected average farm-level price from September 1, 2025, through August 31, 2026; however, this does not represent the average price for either the 2025 or the 2026 calendar year. 
SOYBEANS
Soybean ending stocks for the 2025-26 marketing year in the latest WASDE report are estimated at 350 million bushels. The projected 2025-26 carryout level compares to ending stocks of 325 million bushels in 2024-25, 342 million bushels in 2023-24, 264 million bushels in 2022-23, and 274 million bushels for 2021-22. The projected soybean ending stocks for the current year would be highest in the past five years, but would still be considerably lower than the high carryout level of 913 million bushes in 2018-19, which existed during the last U.S. trade war with China. The soybean stocks-to-use ratio for 2025-26 is now estimated at 8.2 percent, which compares to ratios of 7.3 percent in 2024-25, 8.3 percent in 2023-24, and 6.1 percent in both 2022-23 and 2021-22. The projected 2025-26 ratio is still well below the very high soybean stocks-to-use ratios of 23 percent for 2018-19. There has been some improvement in soybean prices in recent weeks; however, further price enhancements will likely be dependent on future crush and export levels, along with 2026 growing conditions in the U.S. 
USDA is projecting the U.S. average farm-level soybean price for the 2025-2026 marketing year at $10.30 per bushel, which is an increase of $.10 per bushel from the March estimate. The estimated 2025-26 market year average soybean price is above the final MYA price of $10,00 per bushel in 2024-25, which was the lowest average price since the 2020-21 marketing year. The 2025-26 price estimate compares to other recent average soybean prices of $12.40 per bushel in 2023-24, $14.20 per bushel in 2022-23, $13.30 per bushel in 2021-22, $10.80 per bushel in 2020-21, and the very low MYA price of $8.57 per bushel for 2019-20. Average cash soybean prices at local grain elevators in Southern Minnesota were $9.70 per bushel in mid-January, but were near $10.75 per bushel at the time of the April WASDE report. Prices at soybean processing plants were somewhat higher. 
WHEAT
The April WASDE report estimated the U.S. wheat ending stocks for 2025-26 at 938 million bushels, which is an increase of 33.7 percent in the past two years. The projected 2025-26 wheat carryout level compares to 855 million bushels in 2024-25, 696 million bushels in 2023-24, and 570 million bushels in 2022-23. The 2025-26 farm-level average wheat price is now projected at $5.00 per bushel, which is an increase of $.05 per bushel from the March estimated price. The 2025-26 wheat price estimate compares to other recent MYA price levels of $5.52 per bushel in 2024-25, $6.96 per bushel in 2023-24, $8.83 in 2022-23, $7.63 per bushel in 2021-22, and $5.05 per bushel in 2020-21. The 2025-26 MYA price for wheat and other small grains is the average farm-level price in the U.S. from June 1, 2025 until May 31, 2026. 
2025 PLC or ARC-CO Payments Are Reduced 
The final 2025 MYA prices for corn, soybeans, and wheat are used to determine any potential Price Loss Coverage (PLC) or Ag Risk Coverage (ARC-CO) payments for the 2025 crop year. If the MYA price for a crop is lower than the established reference price, there would a PLC payment. The potential ARC-CO payments are based on the MYA price and the final 2025 county average yield, compared to the benchmark (BM) price and county benchmark yield for 2025. For the 2025 crop year only, eligible producers will get the higher of any potential PLC or ARC-CO payments for corn, soybeans, wheat, and other program crops, with payments to be paid in October, 2026. For information on benchmark yields, prices and revenues, and other farm program information, producers should access the USDA ARC-PLC web site at: www.fsa.usda.gov/arc-plc. 
Following is a brief summary of potential 2025 PLC and ARC-CO payments: 
CORN - The 2025 PLC corn reference price is $4.42 per bushel, and the 2025 benchmark price for ARC-CO payments is $5.03 per bushel. Based on the April WASDE report, the estimated 2025 market year average (MYA) corn price is $4.15 per bushel. This is $.27 per bushel below the threshold for 2025 corn PLC payments and is $.88 below the 2025 benchmark price. At a final MYA price of $4.15 per bushel, the estimated 2025 PLC payment would be $30 to $40 per corn base acre, depending on the farm program yield. If the MYA price increases to $4.25 per bushel, the PLC payment estimate would drop to about $20 to $30 per base acre; however, if the MYA price declines to $4.05 per bushel, the PLC estimate would increase to about $40 to $50 per base acre. At the current 2025 MYA price, potential 2025 ARC-CO payments would be initiated with a final 2025 county average corn yield that is about 5-10 percent above the 2025 county benchmark yield. The final 2025 ARC-CO payments will depend on specific county benchmark yields, as well as the final 2025 county average yields. 
SOYBEANS - The 2025 PLC soybean reference price is $10.71 per bushel, and the 2025 soybean benchmark price for ARC-CO payments is $12.17 per bushel. Based on the April WASDE report, the estimated 2025 MYA soybean price is $10.30 per bushel. This is $.41 per bushel below the threshold for 2025 PLC payments and is $1.87 below the 2025 benchmark price. At a final MYA price of $10.30 per bushel, the estimated 2025 PLC payment would be $10 to $20 per soybean base acre. At the current MYA price estimate, 2025 ARC-CO payments would be initiated with a final 2025 county average soybean yield that is about 5 percent above the 2025 county benchmark yield. Similar to corn, final 2025 ARC-CO and PLC payments will vary depending on the final 2025 county yields and benchmark yields (ARC-CO), and on the established farm program yields (PLC). 
WHEAT - The 2025 PLC wheat reference price is $6.35 per bushel, and the 2025 wheat benchmark price for ARC-CO payments is $6.98 per bushel. Based on the April WASDE report, the estimated 2025 MYA wheat price is $5.00 per bushel. This is $1.35 per bushel under the threshold for 2025 wheat PLC payments and is $1.98 below the 2025 benchmark price. At a final MYA price of $5.00 per bushel, the estimated PLC payment would be about $40 to $50 per base ace. At the current MYA price estimate, the 2025 ARC-CO payments would be initiated with a 2025 county wheat yield that is about 25 percent above the 2025 county benchmark yield. It appears highly likely that there will be both a significant PLC or ARC-CO payment on wheat base acres for the 2025 crop year. 
For additional information contact Kent Thiesse, Farm Management Analyst Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com


]]>Wed, 08 Apr 2026 14:07:51 GMThttps://www.fairmontphotopress.com/kent-thiesse/farmers-expected-to-plant-more-soybeans-and-less-corn-in-2026The USDA “Prospective Plantings Report” that was released on March 31st projected a 3.4 percent decrease in 2026 U.S. corn acreage compared to a year ago, along with a 4.3 percent increase in 2026 soybean acreage from a year earlier. The USDA planting intentions numbers came in slightly higher than the grain trade expected for corn acreage and slightly lower than trade estimates for soybean acreage. The USDA “Quarterly Grain Stocks Report” was also released on March 31st, which lists the estimated U.S. grain inventory as of March 1, 2026, for both “on-farm” and commercial grain storage. The USDA estimates for U.S. corn and soybean inventories came in near the average stocks estimates of the grain traders. 
The USDA prospective planting acreage is based on survey data collected from about 73,800 surveys sent to crop producers in early March. Total U.S. crop acreage was listed at 223.8 million acres expected to be planted to corn, soybeans, and wheat in 2026, which down from 225.3 million acres in 2025, but is similar to total 2024 crop acreage. The USDA estimates for intended 2026 U.S. corn and soybean acreage was viewed as mainly “nuetral” for “new crop” corn and soybean futures prices on the Chicago Board of Trade (CBOT). After the USDA planting intentions report was released on March 31, December 2026 both CBOT December corn and November soybean futures closed up slightly. 
Typically, these late March USDA Reports are very critical to farm operators and grain traders due to their impact on grain market prices in the Spring and early Summer months. During these months, many farm operators usually sell any remaining grain inventories from the previous growing season, as well as look for opportunities to forward price a portion of the anticipated crop for the current year. In a majority of years, corn and soybean prices usually reach their “peak-price” during the period from April until June, which is why these reports are so important. 
Highlights from the March 31st USDA Planting Intentions Report: 
CORN - The planting intentions report indicated that just over 95.3 million acres of corn are expected to be  planted in the U.S. in 2026, which is a decrease of 3.5 million acres from the 2025 corn acreage of  98.8 million acres. The 2026 U.S. corn acreage would still be above the 2024 corn acreage of 90.9 million acres and the 2023 acreage of 94.6 million acres. The 2025 U.S. corn acreage was the highest in nine decades. The current USDA corn acreage estimate was about 967,000 acres above the grain trade estimates. Based on the USDA report, 2026 planted corn acreage is likely to decrease in most of the major corn production States. Following is the estimated 2026 corn acreage and the expected decrease from 2025: Iowa at 13.1 million acres (-3%); Illinois at 10.9 million acres (-3%); Nebraska 
at 10.3 million acres (-4%); Minnesota at 8.6 million acres (-3%); South Dakota at 6.3 million acres  (-8%); North Dakota at 4.4 million acres (-6%); Missouri at 3.65 million acres (-4%); and Wisconsin at 3.7 million acres (-11%). Indiana at 5.4 million acres and Ohio at 3.4 million acres expected in 2026 were the same as the final 2025 corn acreage. Kansas at 7.1 million acres was the only major corn producing State with an expected increase in 2026 corn acres (+4%). 
SOYBEANS - Based on the estimates in the March 31st Planting Intentions Report, U.S. soybean acreage in 2026 is projected at 84.7 million acres, which represents an increase of 3.5 million acres from a year ago. The 2026 U.S. soybean acreage estimate compares to 81.2 million acres in 2025, 87.2 million acres in 2024, 83.6 million acres in 2023, 87.4 million, acres in 2022, and the record 90.2 million acres in 2017. The highest increase in the estimated 2026 soybean acreage compared to 2025 was in South Dakota with an expected increase of 500,000 acres, followed by Iowa with an increase of 450,000 acres, and Nebraska with an increase of 350,000 acres, along with increases of 300,000 acres in Kansas, 200,000 acres in Illinois, 170,000 acres in Wisconsin, 150,000 acres in Minnesota and North Dakota, and 50,000 acres in Indiana. Ohio and Missouri were the only major producing States to show a slight decrease in anticipated soybean acreage for 2026 (-100,000 acres each). 
WHEAT- The intended U.S. wheat acreage for 2026 is estimated at 43.8 million acres, down 3 percent from 45.3 million acres in 2025, 46.1 million acres in 2024 and 49.6 million acres in 2023. Spring wheat acreage for 2026 was estimated at about 9.4 million acres, which is down 6 percent from nearly 10 million acres a year ago. 2026 Spring wheat acres are expected to decrease by 10 percent in Minnesota, 8 percent in North Dakota, and 4 percent in South Dakota, compared to 2025 acreage. 
Highlights from the March 31st USDA Grain Stocks Report: 
CORN - The total U.S. corn stocks on March 1, 2026, were listed at just over 9.02 billion bushels, which is an increase of 9.7 percent from a year earlier, and was slightly below the average grain trade estimate. The report indicated that farmers were holding 5.43 bushels of corn inventory in on-farm storage, which represents about 61 percent of the total corn stocks, and is up 21 percent from a year ago. One positive in the USDA grain stocks report was that the implied corn usage from December, 2025 through February, 2026 was 4.28 billion bushels, which was up about 8.4 percent compared to the same quarter a year ago. The improved corn usage numbers are a reflection of strong corn demand for ethanol production and solid corn export levels. The overall corn stocks level remains relatively high, which may limit potential for significant price rallies for the 2025 unpriced corn that is still in storage. 
SOYBEANS - Soybean stocks on March 1, 2026, were listed at just over 2.10 billion bushels, which is up 9.2 percent from a year ago, and was comparable to the pre-report estimates by grain trade analysts. Just over 1.2 billion bushels, or 58 percent of the total soybean stocks, were held in on-farm storage. The total U.S. soybean usage from December, 2025 through February, 2026 was estimated at 1.18 billion bushels, which was nearly the same as a year earlier. Soybean usage  numbers have been bolstered by improved soybean crush numbers; however, that has been offset by lower levels of soybean exports. There has been more optimism in the soybean export market in recent months, which has resulted in some improvement in the soybean prices in recent weeks. 
WHEAT- Total wheat stocks on March 1, 2026, were listed at about 1.3 billion bushels, which is up approximately 4.9 percent from March 1, 2025. This was the third year in a row that the level of wheat stocks have shown an increase on a year-over-year basis. The implied U.S. wheat usage in the past quarter was 4.28 million bushels, which was up about 10.4 percent from the same quarter a year ago. The stronger wheat usage numbers, together with the anticipated lower wheat acreage in 2026, has created some optimism for improved wheat prices in the coming months. 
Corn market prices on the Chicago Board of Trade (CBOT) did not show much movement in either direction following the release of the USDA reports. Nearby CBOT corn futures closed at $4.58 per bushel on March 31, which compares to $4.57 per bushel in 2025, $4.42 per bushel in 2024 and $6.60 per bushel in 2023. New crop CBOT December corn futures on March 31 closed at $4.82 per bushel, compared to $4.42 per bushel in 2025, $4.76 per bushel in 2024 and $5.66 per bushel in 2023. Nearby CBOT soybean futures closed at $11.71 per bushel following the USDA report on March 31, compared to $10.15 per bushel in 2025, $11.91 per bushel in 2024 and $15.05 per bushel in 2023. New crop CBOT November futures closed at $11.57 per bushel on March 31, compared to $10.19 per bushel in 2025, $11.86 per bushel in 2024 and $13.20 per bushel in 2023. 
The March 31st USDA report was based on producer surveys of planting intentions in early March; however, there is potential for these planting expectations to be adjusted slightly when final crop planting numbers are released later this year. The war in Iran began at the end of February, and most of the impacts on fertilizer supplies and prices have taken place since the survey data was collected. These impacts may cause some changes in final crop acres in some portions of the U.S. In the 2025 Planting Intentions Report, USDA estimated total corn acreage at 95.3 million acres on March 31; however, the final 2025 corn acreage was 98.8 million acres, or an increase of 3.5 million acres. 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com


]]>Wed, 01 Apr 2026 13:08:30 GMThttps://www.fairmontphotopress.com/kent-thiesse/farm-custom-rates-expected-to-increase-for-2026Due to the high cost of investment in farm machinery, an ever-increasing number of farm operations are hiring other farm operators to provide some or all of their machinery resources for their farm operation. This is especially true with new and younger farm operators, as well as with children that decide to start farming with their parents. In addition, some land investors are choosing to operate a farm themselves rather than cash renting the land to someone else, thus hiring another farm operator under a custom farming agreement for farming practices.
Custom farming agreements usually include tillage, planting, some weed control, harvesting, and delivering grain to a specified location. Some farm operators also hire custom work for specific farm operations with another farm operator, such as planting, combining, or tillage. Many farm operators negotiate these types of custom rate and custom farming arrangements prior to planting each year, while others wait until harvest is completed.
One of the best resources for average custom rates is the annual “Iowa Farm Custom Rate Survey” that is coordinated and analyzed by Iowa State University. Earlier this year, 205 custom operators and farm managers responded to the 2026 survey, submitting nearly 4,700 expected custom farm rates for various farm operations in 2026. The survey summary lists the “average” and “median” custom rate, as well as a range, for various tillage, planting, fertilizer and chemical application, grain harvesting, and forage harvesting functions on the farm. The “median” rate, which is most commonly used in custom rate negotiations, means that half of the reported rates were higher and half were lower than the listed rate. The survey also includes custom farming rates for corn and soybeans, as well as many miscellaneous farming practices, average per hour farm labor rates, and includes a formula for calculating rental rates. The average custom rates for farm operations in most areas of the Upper Midwest tend to be very close to the Iowa rates.
Average 2026 farm custom rates for some typical tillage, planting, and harvesting practices, as well as custom farming rates, are listed in the adjoining Table. The complete 2026 “Iowa Farm Custom Rate Survey” for all farming practices is available on-line at the following Iowa State University web site: https://www.extension.iastate.edu/agdm/crops/html/a3-10.html
Based on the survey, the average custom rates for harvest operations in 2026 were expected to increase by nearly 6 5 percent, compared to the rates in 2025, while average custom rates for tillage, planting, and other pre-harvest operations are expected to increase by about 8.5 percent. The 2026 custom farming rates for corn and soybean production are expected to increase slightly compared to a year earlier, following an increase of nearly 20 percent in recent years. The cost for new and used machinery increased in 2025, along with continued high repair costs, labor charges, and interest rates. It should be noted that custom rate survey was completed prior to the initiation of the conflict in Iran, which may result in custom operators adjusting their final custom rates by year-end, in order to more fully reflect any changes in fuel costs and other expenses for custom operations.
All listed custom rates in the Iowa Survey results include fuel, labor, repairs, depreciation, insurance, and interest, unless listed as rental rates or otherwise specified. The average price for diesel fuel was assumed to be $2.89 per gallon. A fuel price increase of $.50 per gallon would likely cause most custom rates to increase by approximately five percent. These average or median rates are only meant to be a guide for custom rates, as actual custom rates charged may vary depending on changes in fuel costs, availability of custom operators, timeliness, field size, etc. There are also many other specific situations among farmers and family members that share farm machinery that could also lead to adjustments in final custom rates.
Note --- For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com
 
SELECTED 2026 FARM CUSTOM RATES
Following are the “Median” custom rates for some common farming practices for 2026, as well as the (range) of custom rates listed, based on the “Iowa Farm Custom Rate Survey” ……
Note --- “Median” means that half of the reported rates were higher, and half were lower than the listed rate.
Custom Farming Rates (includes tillage, planting and harvesting costs):
· Corn ------------ $165.00 per acre (Range = $75 - $375 per acre)
· Soybeans ------- $155.00 per acre (Range = $65- $353 per acre)
· Small Grain ---- $167.00 per acre (Range = $70 - $290 per acre)
Tillage:
· Moldboard Plow ---------- $21.00 per acre ($14 - $24 per acre)
· Disk/Chisel ---------------- $23.00 per acre ($10 - $34 per acre)
· V-Ripper (deep tillage) --- $27.25 per acre ($15 - $40 per acre)
· Field Cultivator ------------ $19.00 per acre ($7.60 - $32 per acre)
· Tandem Disk --------------- $20.00 per acre ($10 - $30 per acre)
· Strip Tillage ---------------- $23.50 per acre ($15 - $30 per acre) (add $6/A. for anhydrous application)
· Chopping Cornstalks ----- $15 per acre ($8 - $20 per acre)
Planting and Spraying:
· Planter With Attachments ------- $27.50 per acre ($16 - $50 per acre)
· Planter Without Attachments --- $26 per acre ($15 - $38 per acre)
· No-Till Planter -------------------- $28.30 per acre ($15 - $46 per acre)
· Soybean Drill --------------------- $21.00 per acre ($14 - $28 per acre) ($25 per acre for no-till drilling)
· Cover Crop Drill ------------------ $19.25 per acre ($9 - $25 per acre)
· Crop Spraying (broadcast) ------- $10.50 per acre ($6 - $20 per acre) (self-propelled sprayer)
Harvesting Grain:
· Corn Combine ------------------ $45.00 per acre ($25 - $80 per acre) ($75/A. or more with grain cart and truck)
$50.00 per acre (with chopper head) (add $11/A. for downed corn)
· Soybean Combine -------------- $42.00 per acre ($24 - $70 per acre) ($70/A. or more with grain cart and truck)
$45.50 per acre with draper head) (add $4/A. for GPS mapping)
· Small Grain Combine ---------- $45.00 per acre ($35 - $65 per acre)
· Corn Grain Cart (in field) ------- $8.75 per acre ($3 - $22 per acre)
· Soybean Grain Cart (in field) --- $8.00 per acre ($2 - $19 per acre)
· Hauling Grain (5 mi. or less) --- $.12 per bushel ($.06 - $.50 per bushel)
· Hauling Grain (5-25 mi.) -------- $0.20 per bushel ($.09 - $.35 per bushel)
· Grain Drying (cont. flow) ------- $0.06 per point per bushel (incl. fuel, electricity and labor)
· Farm Bin Rental ----------------- $0.15 per bu. per year ($.10 - $.45/bu./year) (or $.03/bu./month)
Harvesting Forages:
· Mowing/Conditioning Hay ---------- $17.00 per acre ($10 - $25 per acre)
· Hay Baling (large round bales) ----- $12 per bale ($11 - $19 per bale) ($16 per bale with wrap)
· Corn Stalk Baling (large bales) ----- $14 per bale ($10 - $20 per bale) ($16 per bale with wrap)
· Silage Chopping ---------------------- $9.50 per ton ($7 - $12 per ton) (or $77 per hour per head row)
Farm Labor Rates:
· General Farm Labor ---------------- $22.00 per hour ($15 - $40 per hour)
· Spraying & Harvesting Labor ----- $25.00 per hour ($15 - $40 per hour)
Table prepared by Kent Thiesse, Farm Management Analyst

]]>Wed, 25 Mar 2026 13:17:36 GMThttps://www.fairmontphotopress.com/kent-thiesse/usda-projects-lower-us-farm-income-for-2026In February, USDA released the latest “USDA Farm Income Forecast”, which appears to show some concern regarding prospects for 2026 U.S. farm income. As you “drill deeper” into the latest USDA data, there are some reasons for even greater concern in certain segments of the agriculture economy. USDA latest update reduced the estimated 2025 U.S. net farm income by $25 billion from the farm income estimate in September, 2025, and projected an even lower net farm income for 2026. The USDA report also highlighted the continued increase in production expenses in agriculture, and the relatively high level of government payments. In should be noted that this report was released prior to the added farm economic concerns related to current war in Iran.
According to the latest U.S. farm income report that was released by the USDA Economic Research Service (ERS) in early February, the 2025 U.S. net farm income is estimated at $154.6 billion, which is down about $25 billion from the September estimate. The recent USDA summary lowers the projected 2026 U.S.net farm income downward an additional $1.2 billion to an estimated $153.4 billion. The record U.S. net farm income was $186 billion in 2022, with the record farm income being largely due to high crop commodity prices, modest crop expenses, and very strong crop profit margins. The projected 2025 and 2026 net farm income is mainly due to profitability of livestock production and large levels of government farm program payments.
In the recent farm income report, USDA revised the estimated total U.S. net cash income for 2025 downward to $153.9 billion, which is a decrease of nearly $27 billion from the September projection. The 2026 net cash income projected to increase slightly to $158.5 billion. Net cash income includes cash receipts from all farm-related income, including government payments, minus cash expenses for the year. Net farm income is accrual-based, which includes adjustments in the cash income for changes in inventories, depreciation, and rental income. Generally, net farm income is usually a more true measure of overall profitability in the farm sector.
Following are some observations from the latest USDA Farm Income Report:
• Overall, 2025 cash receipts for all commodities on U.S. farms is now estimated at near $529 billion, which is expected to decline slightly to $514.7 billion in 2026.
• Total 2026 crop receipts are estimated at nearly $240.6 billion, which is slightly above 2025 levels. Following are the estimated 2026 cash receipts for various crops, compared to 2025 and 2024 receipt levels:
Corn = $63.7 billion (2026); $61.6 B (2025); $66.4 B (2024)
Soybeans = $44.5 billion (2026); $44.5 B (2025); $46.3 B (2024)
Wheat = $9.5 billion (2026); $9.86 B (2025); $11.2 B (2024)
Cotton = $5.4 billion (2026); $5.4 B (2025); $5.2 B (2024)
Fruits & Nuts = $33.4 billion (2026); $33.0 B (2025); $31.3 B (2024)
Vegetables & Melons = $26.2 billion (2026); $25.5 B (2025); $25.1 B (2024)
• Total 2026 livestock receipts are estimated at nearly $274 billion, which is about $17 billion lower than 2025 levels. Total U.S. livestock receipts in 2026 are expected to surpass total crop receipts for the third straight year (2024-2026), which has not occurred in the past twenty-five years. Following are the estimated 2026 livestock receipts for various livestock, compared to 2025 and 2024 receipt levels:
Cattle & Calves = $133.1 billion (2026); $127.9 B (2025); $112.1 B (2024)
Milk & Dairy Products = $42.5 billion (2026); $48.7 B (2025); $50.7 B (2024)
Hogs = $29.3 billion (2026); $29.5 B (2025); $27.3 B (2024)
Broilers = $45.4 billion (2026); $44.7 B (2025); $45.4 B (2024)
Eggs = $8.9 billion (2026); $26.2 B (2025); $21.0 B (2024)
• The significance of government payments on net farm income and net cash income levels increased dramatically in 2025, and is expected to increase even more in 2026.This is largely due to a combination of one-time 2024 economic assistance payments (ECAP) and 2025 Farmer Bridge Assistance (FBA) payments, and the 2023 and 2024 disaster assistance payments (SDRP I & II). Regular farm program payments (PLC & ARC-CO) are also expected to be higher in 2025 and 2026 in some sectors, due the enhancements in the Title I provisions that were included in the “One Big Beautiful Act” (OBBA) that was enacted by Congress in 2025. There are also regular CRP payments, dairy margin coverage payments, and other traditional government payments. Following is listing of the Net Farm Income (NFI) for 2020-2026, and the total amount of estimated government payments (GP) for 2020-2026 (along with the % of the total net farm income from government payments):
2026 = $153.4 billion NFI, $44.3 billion (GP), (28.9% from GP)
2025 = $154,6 billion NFI, $30.5 billion (GP), (19.7% from GP)
2024 = $128 billion NFI, $11 billion (GP), (8.5%from GP)
2023 = $156 billion NFI, $12 billion (GP), (7.7% from GP)
2022 = $186 billion NFI, $16 billion (GP), (8.6% from GP)
2021 = $142 billion NFI, $26 billion (GP), (18.3% from GP)
2020 = $96 billion NFI, $46 billion (GP), (47.9% from GP)
• Total farm expenses are estimated at $477.6 billion in 2026, which is an increase $3.5 billion from 2025, and is $20 billion above 2024 expense levels. The projected 2026 total farm expense level is over 30 percent above the total expense level in 2020. The cost of purchased livestock, especially feeder cattle, is expected to see the greatest increase in 2026. Other farm expenses expected to increase in 2026 include fertilizer, labor, repairs, and property taxes. Seed, pesticides, and land rent are expected to stay fairly steady with a year earlier, while the cost of feed, fuel, and interest are expected to decline slightly in 2026. The continued higher level of crop input costs, together with lower commodity prices, points to the negative profit margins facing crop producers in 2025 and 2026. On the other hand, the low commodity prices have reduced feed costs, resulting in improved profitability in livestock production.
The U.S. net farm income projections by USDA for 2025 and 2026 probably appear to be better than probably actually exist in many areas of the country. The very high net farm income levels from 2021 to 2023 were primarily driven by some of the highest crop prices in the past decade, along with very manageable farm production expenses and low interest rates. The relatively high projected farm income levels for 2025 and 2026 are largely the result of record cattle prices, strong livestock profitability, and a very high levels of government farm program payments. Many of these government payments are one-time ad-hoc payments. The projected crop receipts for 2025 and 2026 are actually the lowest in recent years and the predicted overall profit margins for crop production this year are the poorest since the 2016-2020 period. The above average corn and soybean yields that existed in several areas of the Upper Midwest in 2025 certainly helped soften the potential negative profit margins for many farm operators in those areas.
There are some certainly some “yellow caution flags” in net farm income and profitability levels revealed in the latest USDA farm income report for the U.S. farm sector as we look ahead to 2026. A big key going forward will be if we see some improvement in crop prices during the next 6-12 months. This will likely depend on the level of U.S. demand and consumption, as well as the strength of U.S. export markets to China, Mexico, Canada, and other countries. Another key to farm profitability in 2026 will be what impact the war in Iran and potential tariffs have on farm production expenses, as well as the future direction of land costs, and interest rates during the coming year. In addition, final 2026 farm income and profitability will likely depend on the amount of ad-hoc short-term farm program payments, as well as the financial impact provided by the improved “safety-net” provisions in the “One Big Beautiful Act”.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone - (507) 381-7960; E-mail - kentthiesse@gmail.com
]]>Wed, 18 Mar 2026 14:30:18 GMThttps://www.fairmontphotopress.com/kent-thiesse/us-house-ag-committee-passes-the-skinny-farm-billIn mid-February, the U.S. House Agriculture Committee Chairman, Congressman Glenn (GT) Thompson (R-PA) released the text for the revised version of the U.S. House Farm Bill, which is titled: “Farm, Food and National Security Act of 2026” (FFSNA), or so-called “Skinny Farm Bill”. The House version of the Farm Bill was reviewed and was approved by the entire U.S. House Agriculture Committee by a vote of 34-17. The proposed Farm Bill was approved by all Republican members of the Ag Committee. as well as by seven Democratic members of the Committee; however, there was strong opposition to the proposed Bill by the Democratic leadership on the Ag Committee. More details on the U.S. House Farm Bill can be found at: https://agriculture.house.gov/farmbill/
The 2023 crop year was set to be the final year for the 2018 Farm Bill; however, the 2018 Farm Bill has received three one-year extensions for the 2024, 2025 and 2026 federal fiscal years, and will now expire on September 30, 2026. Farm Bills are one of the most comprehensive pieces of legislation that are passed by Congress, with programs ranging from farm commodity programs to food and nutrition programs, from conservation programs to rural development programs, and several more. In many cases, finalizing a Farm Bill can be quite controversial, both along political party lines and geographical differences, with members of Congress wanting to protect the farm, food, conservation, and economic interests of their State. The so-called “skinny” Farm Bill covers all titles and provisions normally in the Farm Bill, including the commodity, crop insurance, and nutrition title provisions that were included in the “One Big Beautiful Act” (OBBA) that was passed by Congress in 2025.
The OBBA that was passed in 2025 provided $389 billion in funding over ten years for numerous USDA programs, including several Farm Bill Title I and Title IX provisions that are related to commodity programs and crop insurance. Following are changes that were enacted through the OBBA legislation that are included in the Farm Bill:
Title I - Commodity Programs
­• The statutory (minimum) reference prices were increased by 10 to 20 percent for all farm program crops, beginning with the current 2025 crop year. Following are the increases in statutory reference prices for some common crops:
Corn - $4.10 per bushel (up 11 percent from $3.70/bu.)
Soybeans - $10.00 per bushel (up 19 percent from $8.40/bu.)
Wheat - $6.35 per bushel (up 15 percent from $5.50/bu.)
• The existing formula for calculating the effective reference price (ERP) for a given commodity in a given year continues to be the greater of 85 percent of the “Olympic average” national market year average (MYA) price for the previous five years or the statutory reference price for a crop. For example, the current corn ERP for the 2025 and 2026 crop years is $4.42 per bushel, while the soybean ERP for 2025 and 2026 is $10.71 per bushel. The ERP cannot exceed 115 percent of the statutory reference price.
• Increases the ARC-CO guarantee to 90 percent of the benchmark (BM) revenue (formerly 86 percent). The BM revenue is the county BM yield time the BM price (5-year “Olympic” average price). The maximum ARC-CO payments increase to 12 percent of the ARC-CO revenue (formerly 10 percent).
• Increases the marketing assistance loan (MAL) rates for most commodities by 10 percent.
• Allows for the addition of up to 30 million new crop base acres, targeting farms that currently have no base acres, or that have planted more acres to program crops in recent years than the existing base acres. This provision would not affect existing crop base acres.
• The farm program payment limit has been increased to $155,000 for any eligible individual or entity (formerly at $125,000). The payment limit language was also adjusted to put farm LLC business structures under the same criteria as exists for farm general partnerships for payment limit purposes.
Title XI - Crop Insurance
• The OBBA increased the federal premium subsidies by 3 to 5 percent for most coverage levels of individual crop insurance. Additional premium reductions were also added for beginning farmers during their first ten years of farming.
• The premium subsidy for both the Supplemental Crop Option (SCO) and Enhanced Coverage Option (ECO) crop insurance was increased an 80 percent subsidy level. The SCO coverage will increase to 90 percent in 2027 (currently at 86 percent), while ECO offers 95 percent coverage. SCO coverage is now available with either the PLC or ARC-CO farm program choice (formerly only available with PLC).
Key provisions for other Titles in the “Skinny” Farm Bill:
• Title II – Conservation - The OBBA addressed some provisions for EQIP, CSP, and ACEP programs; however, it did not address the Conservation Reserve Program (CRP). The proposed Farm Bill will maintain maximum CRP acres at the current level of 27 million acres through 2031.
• Title III – Trade - Broadens USDA’s role in for trade and food aid programs.
•Title IV – Nutrition - The OBBA made several changes to the Supplemental Nutrition Program (SNAP). The proposed Farm Bill calls for more USDA commodity purchases from local producers for school and food aid programs.
• Title V – Credit - The FFSNA would increase the maximum loan levels for Direct and Guaranteed FSA loans, as well adjusting criteria for FSA beginning farmer loans.
• Title VI – Rural Development - The proposed Farm Bill reauthorizes and expands many USDA programs related to rural electricity, water and sewage systems, broadband connection, fire departments, and other rural infrastructure. This Title also supports small business loans and grants, rural childcare programs, and many other programs important to rural communities.
• Title VII – Research, Extension & Education --- This title authorizes USDA funding for agricultural research and extension service programs through the land grant universities in various States. There is also special funding to support rural mental health services and programs.
•  Title VIII – Forestry - Focuses on USDA programs related to forest management and stewardship programs, wildfire prevention, agroforestry initiatives, and other Forest Service programs.
• Title IX – Energy - Authorizes funding for USDA research related to sustainable aviation fuel (SAF); however, the FFSNA did not address the nationwide implementation of year-round 15 percent ethanol blends, or any other items related to expanding the use of biofuels.
• Title X – Horticulture - This title authorizes USDA funding for programs for fruits and vegetables, specialty crops, organic production, urban agriculture, etc. The proposed Farm Bill would limit the ability of States to regulate certain pesticides and crop protection products that are federally registered.
• Title XII - Miscellaneous - This Title includes a broad set of USDA programs addressing animal health and diseases, supply chain and national security issues, and emergency preparedness. One of the more controversial provisions in the FFSNA would restrict States from enacting legislation dictating animal production practices that could impact interstate trade of agricultural products, such as the Proposition 12 legislation in California.
The passage of the “skinny” Farm Bill by the U.S. House Agriculture Committees is the first step toward the possible completion of a Farm Bill by the end of 2026; however, many steps remain to complete that process. The Farm Bill will need to be approved by the entire U.S. House and the U.S. Senate, before ultimately sending it to the President for final approval. There are likely to be several amendments and proposed revisions to the FFSNA before a final Farm Bill is finally passed. This may be difficult to accomplish in 2026, given the current political divide that exists.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com

]]>Wed, 04 Mar 2026 14:27:12 GMThttps://www.fairmontphotopress.com/kent-thiesse/farmer-bridge-assistance-sign-up-underwaySign-up for the Farmer Bridge Assistance (FBA) program began on February 23 at local Farm Service Agency (FSA) offices and will continue until April 17. A total of $12 billion was allocated for the FBA program to provide economic assistance payments to producers of certain crops to offset low prices and poor profit margins for the 2025 crop year, as well as the market price impacts from tariffs on export markets for certain crops in the past year. Of that total, $11 billion of the payments will be paid to producers of traditional farm program Title I crops, which includes corn, soybeans, wheat, cotton, and rice. The remaining $1 billion will be held back for economic assistance for specialty crop producers.
FBA Sign-up Procedures
 
Eligible crop producers will receive a pre-filled FBA application form listing the eligible 2025 crop acres, based on the crop acreage report that was submitted to the FSA office. Producers only need to complete one FBA application for all eligible crops, regardless of the farm location in any county or State. Farmers can receive their FBA application form either in person at their local FSA office, or they can receive their FBA application using the FSA online system. Farmers with an existing FSA online account are able to sign-up for potential FBA payments by accessing their existing FSA account. Other farmers will also be able to set up a new online account prior to enrolling in the FBA program. For more information on the FSA online accounts, farmers should go to the following website: www.farmers.gov/account.
Once producers receive the FBA application, they should verify that the data in the application is correct and the sign the form. The completed FBA application may be submitted to FSA using the FSA online system, via email or fax, or in person at local FSA offices. In addition to submitting the FBA application on a timely basis, producers must have completed several other forms required by FSA. Most farmers that routinely receive farm program payments will likely already have these payments on file at local FSA offices. Following are the required FSA forms in order to receive FBA and other FSA payments:
• AD-1026 -Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC) Certification.
• Form CCC-941 - Average Adjusted Gross Income (AGI) Certification and Consent to Disclosure of Tax Information.
• Form CCC-901 - Member Information for Legal Entities.
• Form CCC-9021 (if applicable) - Farm Operating Plan for an Individual.
• Form CCC-941 (if applicable) - Farm Operating Plan for an Entity.
• SF-3881 - Miscellaneous Payment Form (Direct Deposit authorization).
 
FBA Payment Rates for Various Eligible Crops
• Corn - $44.36 per acre
v Soybeans - $30.88 per acre
• Wheat - $39.35 per acre
• Oats - $81.75 per acre
• Barley - $20.51 per acre
• Peas - $19.60 per acre
• Sorghum - $48.11 per acre
• Cotton - $117.35 per acre
• Rice - $132.89 per acre
• Peanuts - $55.65per acre
FBA payment rates were also announced for canola, chickpeas, flax, mustard, safflower, sesame, and sunflower.
 
How FBA Payments were Calculated
FBA payments will be based on the 2025 planted acres of eligible crops, as reported to local Farm Service Agency (FSA) offices on or before December 19, 2025. For double-crop acres, both the first crop and subsequent crop are eligible for FBA payments (for example peas followed by soybeans); however, any prevent plant acres in 2025 are not eligible for the FBA payments The payment amounts for each crop were based on the national average yield times the projected 2025-26 market year average (MYA) price in the December 9, 2025 WASDE report, minus the 2025 average production cost for a commodity, based on USDA Economic Research Service (ERS) data. The MYA prices in the December WASDE report included $4.00 per bushel for corn, $10.50 per bushel for soybeans, and $5.50 per bushel for wheat.

Payment Limits for FBA Payments
The payment limit for the FBA payments will be $155,000 per eligible person or legal entity. There will not be higher payment limits based on having 75 percent of taxable income received from farming enterprises, similar to some previous FSA programs. Entities such as corporations, LLC’s, S corporations, and trusts will be limited to one payment limit of $155,000. Any person or legal entity with an adjusted gross income (AGI) exceeding $900,000, based on FSA criteria, will not be eligible to receive any FBA payments.
Following are examples of the estimated acres required to reach the $155,000 payment limit with various crop mixtures of corn, soybeans, and wheat:
· 100% Corn ($44.36/A.) = 3,494 acres
· 100% Soybeans ($30.88/A.) = 5,019 acres
· 100% Wheat ($39.35/A.) = 3,939 acres
· 2/3 Corn; 1/3 Soybeans (ave. $39.86/A.) = 3,889 acres
· 1/2 Corn; 1/2 Soybeans (ave. $37.62/A.) = 4,120 acres
· 1/3 Corn; 1/3 Soybeans; 1/3 Wheat (ave. $38.20/A.) = 4,058 acres
 
Details on the ASCF Program for Specialty Crops
An additional $1 billion has been allocated for the Assistance for Specialty Crop Farmers (ASCF) program, which will provide payments to a wide range of crops not covered by the FBA program. This includes most fruits, vegetables, nuts, horticulture crops, etc. Producers of dry edible beans and peas are eligible for FBA payments and should complete out a FBA application, as they will not be eligible for ASCF payments. There will also be separate payments for sugar beet and sugarcane producers. Similar to FBA payments, ASCF payments will be based on 2025 planted acres of various specialty and sugar crops. Specialty crop acreage must be reported to local FSA offices by March 13, 2026. Following that, payment rates and sign-up details will be announced for the ASCF program.
 
More Information on the FBA Program or the ASCF Program
Farmers that submitted their application for the FBA program shortly after February 23 reported receiving their FBA payments within a few days. Farmers with specific questions on the application process for either the FBA program or the ASCF program, or regarding payment procedures, should contact their local FSA office. For more information on the FBA program requirements, payment rates, payment limits, etc., as well as updates on the ASCF program, farmers can go to the USDA FBA website at: https://www.fsa.usda.gov/resources/programs/farmer-bridge-assistance-fba-program
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com
]]>Wed, 11 Feb 2026 14:18:25 GMThttps://www.fairmontphotopress.com/kent-thiesse/many-farm-program-and-crop-insurance-questionsThe so-called “One Big Beautiful Act” (OBBA) that was passed by Congress in 2025 made some important changes to provisions that could affect 2026 farm program and crop insurance decisions. This includes the implementation of higher reference prices for all Title I crops beginning for the 2025 and 2026 crop years, improved farm program guarantees, and increased federal subsidies for crop insurance premiums. These enhancements have raised some questions for farmers as they analyze their options for 2026 crop insurance coverage, as well as with their choice of the PLC and ARC-CO farm program option. The crop insurance sign-up deadline is March 16. No sign-up dates have been announced for enrollment in the 2026 farm program.
 
Following are some of the farm program and crop insurance questions that have resulted from the implementation of the OBBA, as well as other common questions:

• How did the OBBA affect reference prices for 2025 and 2026 ?

The statutory reference prices were increased by 10 to 20 percent for all farm program crops beginning with the 2025 crop year, and continuing for the 2026 through 2031 crop years. The new statutory (minimum) reference prices are $4.10/bu. for corn, $10.00/bu. for soybeans, and $6.35/bu. for wheat. The “effective reference prices” are based on the 5-year “olympic” average (drop the high and low) market year average (MYA) price from five previous crop years times 85% (.85). The effective reference price can be as much as 15 percent above the statutory reference price. The
 

• How will the increased refence prices affect the benchmark (BM) prices that are used to determine guarantees for the ARC-CO program ?

The BM prices will continue to be calculated based on the 5-year “olympic” market year average (MYA) price for five previous years, with no factoring. The minimum BM prices for 2025-2031 will be $4.10/bu. for corn $10.00/bu. for soybeans, and $6.35/bu. for wheat. There will be no impact on the 2025 and 2026 BM prices due to the calculated BM prices exceeding the “effective” reference prices. The 2025 and 2026 BM prices are $5.03/bu. for corn, $12.17/bu. for soybeans, and $6.98/bu. for wheat. 
 

• What are the changes in the OBBA that will be used for calculation of ARC-CO payments ?

The ARC-CO guarantee level is increased to 90 percent of the calculated benchmark (BM) revenue (BM county yield x BM price), which is up from the previous 86 percent guarantee. The maximum ARC-CO payment cap is increased to 12 percent of the calculated BM revenue, which was previously at 10 percent. This combination means that ARC-CO payments will be initiated more frequently, and the maximum ARC-CO payment amounts per base acre will be significantly higher for most program crops.
 

• What are the new farm program payment limits under the OBBA ?

The payment limit for ARC-CO and PLC payments has been increased to $155,000 per eligible entity or individual, beginning with the 2025 program. This is up from the previous payment limit of $125,000. An inflation adjustment factor was also added, which could allow for small increases in future payment limits. Farm businesses that are set up as S corporations and LLC’s will now be treated similar to general partnerships as far as determining the number of individuals that are eligible for payment limits; however, no details have been released regarding the revised payment limit eligibility.
 

• Will the OBBA provisions be implemented retroactively for the 2025 crop year ?

Yes, since farmers had already selected their farm program choice when the OBBA was passed, they will automatically receive the higher of any PLC or ARC-CO payments for a given farm program crop for the 2025 crop year, which will be paid in October. This provision will only be in effect for the 2025 crop year.  
 

• Will farmers be able to increase crop base acres for 2026 ?

The OBBA allows for the addition of up to 30 million more farm program base acres, which will be allocated among eligible program crops. The added base acres will be for acres planted to farm program crops that are currently not eligible for farm program benefits. It is not anticipated that this will include the opportunity to change or update existing crop base acres. It is likely that the new crop base acres will be eligible for farm program benefits for the 2026 crop year; however, no announcement has been made in that regard. As of this writing, USDA has not announced the details for adding crop base acres.
 

• What are the enrollment dates for the 2026 farm program ?

USDA has not yet announced the sign-up dates for the 2026 farm program. It is anticipated that sign-up may not begin until after the crop base acre update has been completed, which means that farm program sign-up may be delayed until late Spring or early Summer. The delay in the 2026 farm program sign-up beyond the normal March 15 deadline can actually be a benefit for producers, as it allows them to have a better handle on 2026 crop production and anticipated 2026 market year average prices. This can be very helpful when deciding between PLC and ARC-CO as a farm program choice for 2026.
 

• Where can producers get more information on the 2026 farm program ?

County Farm Service Agency (FSA) offices will provide information on the 2026 farm program details and sign-up procedures, as soon as information becomes available. The FSA offices will also be providing information on crop base acre upgrades, as soon as those details are available. The updated 2026 crop reference prices used to calculate PLC payments, as well as the 2026 benchmark prices, yields, and revenues used to calculate ARC-CO payments and other farm program information are available on the FSA website at: https://www.fsa.usda.gov/resources/programs/arc-plc/program-data
 

• What are the increased crop insurance premium subsidies that are in place for 2026 ?

The federal premium subsidies for 80 and 85 percent crop insurance coverage will increase by 3 percent for 80 and 85 percent coverage levels, with an increase of 5 percent for other levels of crop insurance. The 2026 premium subsidy is increased to 80% in 2026 for both Supplemental Crop Option (SCO) and Enhanced Coverage Option (ECO) insurance cverage. In addition, both SCO and ECO are now available with either the PLC or ARC-CO farm program choice in 2026.
 

• What are the extra premium subsidies for beginning farmers with ten years or less of farming experience ?

The additional beginning farmer premium subsidies in 2026, beyond the regular crop insurance premium subsidies, are as follows:

• Year 1 and 2 farming --- additional 15% premium subsidy.
• Year 3 of farming --- additional 13% premium subsidy.
• Year 4 of farming --- additional 11% premium subsidy.
• Year 5-10 of farming --- additional 10% premium subsidy.

 

• How could the increased premium subsidies and other changes affect crop insurance decisions ?

The increased premium subsidies will allow most corn and soybean producers in the Midwest to utilize and an 80 or 85 percent revenue protection (RP) insurance policy with farm-level APH yields, and then supplement that policy with SCO and ECO insurance coverage utilizing county yields. This can provide for up to 95 percent insurance coverage in 2026 at a fairly reasonable cost.
 
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For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group
Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com 

]]>Wed, 04 Feb 2026 14:14:53 GMThttps://www.fairmontphotopress.com/kent-thiesse/sco-and-eco-insurance-coverage-a-viable-option-for-2026As has been often said with farming “every year is different”, and many times decisions for the current crop year are based on what happened in the previous year or two. That could be the scenario in some cases with considering the Enhanced Coverage Option (ECO) and Supplemental Coverage Option (SCO) insurance coverage options for 2026. ECO insurance has been around for several years but was not considered on a widespread basis due to the relatively high premium rates for ECO coverage and limitations for SCO coverage. That scenario has now changed due to much lower premium rates and fewer limitations on SCO coverage. This makes SCO and ECO a much more viable crop insurance option as part of an overall risk management package in 2026. The deadline to enroll in crop insurance for corn and soybeans in 2026 is March 16. 

NEW FOR 2026 
The Supplemental Coverage Option (SCO) coverage will be available to producers that choose the Price Loss Coverage (PLC) and the Ag Risk Coverage (ARC-CO) farm program options for the 2026 crop year. So the farm program choice will not impact SCO insurance coverage decisions, as it did previously. SCO coverage allows producers to purchase additional county-level crop insurance coverage up to a maximum of 86 percent coverage in 2026, which will increase to 90 percent coverage in 2027. For example, a producer that purchases an 80% RP policy for corn or soybeans could purchase an additional 6% SCO coverage in 2026. 
The Enhanced Coverage Option (ECO) provides area-based insurance coverage from 86 percent up to 95 percent coverage, with producers having a choice between 90 or 95 percent ECO coverage. The purchase of ECO coverage is not linked to farm program enrollment. Producers can utilize both ECO and SCO together, in addition to their underlying RP, RPE, or YP insurance policy; however, farmers do not have to purchase SCO coverage in order to purchase ECO insurance. 
The Federal government has increased the premium subsidies for both SCO and ECO coverage for 2026, which should make premiums more reasonable for crop insurance coverage options that include these products. Both the 90 percent and 95 percent ECO insurance coverage options will have a premium subsidy of 80% in 2026, which is the as the premium subsidy for SCO coverage. (This is a correction from last week’s column dated 1-26-26.) In 2025, the ECO coverage options had a premium subsidy of 65%, which was increased from a 44 percent premium subsidy in 2024. This is in addition to the premium subsidy increases of 3-5 percent on most farm-level revenue protection (RP) crop insurance policies for 2026. The increase in the premium subsidy in 2025 resulted in 61.8 million acres being insured under ECO coverage in 2025, as compared to only 15.6 million acres under ECO policies in 2024. With the additional premium subsidy up to 80 percent for the 2026 crop year, we will likely see another increase in the number of corn and soybean acres insured by ECO coverage in 2026. 

HOW ECO AND SCO INSURANCE COVERAGE FUNCTION 
ECO and SCO are county revenue-based insurance products that are somewhat similar to the area risk protection crop insurance products. The calculations for ECO and SCO function very similarly to standard revenue protection (RP) insurance policies, utilizing the same crop insurance Spring price and harvest price as RP policies. The 2026 crop insurance Spring (base) price is based on the average Chicago Board of Trade (CBOT) prices for December corn futures and November soybean futures during the month of February. The Spring price estimates (as of 2-02-26) are near $4.50 per bushel for corn and $10.75 per bushel for soybeans. The harvest price for SCO and ECO coverage, as well as RP policies, is the average price of the same CBOT futures months during the month of October. Producers can utilize both ECO and SCO insurance coverage together, in addition to their underlying RP, RPE, or YP insurance policy. The biggest difference from most RP insurance policies is that ECO and SCO utilize county level average yields, rather than the farm-level APH yields that are used for RP policies. 
Based on the current Spring price estimates of $4.50 for corn and $10.75 for soybeans, crop producers can guarantee a market price of $3.83 per bushel for corn and $9.14 per bushel for soybeans with an 85% RP insurance policy. However, the market price guarantee increases to $4.28 per bushel for corn and $10.22 per bushel for soybeans, when adding SCO coverage and a 95% ECO policy, utilizing county yields, together with the underlying RP policy. These price guarantee estimates assume that the final 2026 harvest yield is the same as the APH yield on the farm., and the final 2026 county average yield is the same as the original county average yield. Any variations in the final harvest yield at the farm-level or with the county average yield, either up down from the farm-level APH yield or the original county average yield, will cause these price guarantees to vary. 
Due to the difference in county and farm-level yields, the calculations for SCO and ECO policies may function differently than the underlying RP policies. It is possible for a producer to collect on an individual RP policy, but not collect on a SCO or ECO policy, or vice versa. For example, a producer with an 85% RP policy may have a loss that qualifies for an insurance indemnity payment on a farm unit, while the county as a whole may not meet the threshold to qualify for a SCO or ECO payment. It could also be possible to collect a SCO or ECO payment for a county-level revenue loss, while not qualifying for a RP insurance indemnity payment at the individual farm-level. 

BOTTOM-LINE ON ECO AND SCO INSURANCE COVERAGE OPTIONS 
In 1989, corn and soybean producers could only insure up to 75 percent of their crop guarantee (APH yield times the Spring crop insurance price), and the federal premium subsidy was only 30 percent. This made crop insurance fairly expensive for the risk protection that was provided. In 2026, farmers can insure up to 85 percent of their crop insurance guarantee, based on trend-adjusted (TA) farm level yields. Premium subsidies are now 41 percent for 85 percent coverage, 51 percent for 80 percent coverage, and 60 percent for 75 percent coverage. In addition, farmers can now insure up to 90 or 95 percent of the insurance guarantee, utilizing county average crop yields above their farm-level coverage. Farmers can now carry 95 percent insurance coverage at a net premium cost that is likely lower than the premium cost for 75 percent coverage back in 1989. 
The added premium subsidies make the higher crop insurance coverage levels available through SCO and ECO policies much more affordable for 2026. The enhancements to SCO and ECO coverage allow farmers to reduce risk and insure a higher percentage of their expected 2026 crop production at a reasonable premium cost. Many crop insurance companies have combined SCO and ECO coverage with other private insurance buy-up policies to offer some very attractive insurance options for 2026. Utilizing SCO and ECO coverage, together with a sound Revenue Protection (RP) policy on individual farm yields, an provide an excellent risk management package. 
Farmers should contact their crop insurance agent for details, premium quotes, and spreadsheets on various crop insurance coverage options, including ECO and SCO. 
Kent Thiesse, Farm Management Analyst, has prepared an information sheet titled: “2026 Crop Insurance Decisions” that contains more details on SCO and ECO insurance coverage, along with tables showing SCO and ECO examples. To request a free copy of this information sheet, send an e-mail to: kentthiesse@gmail.com 
Some other good crop insurance resources include: Ø U of Illinois FarmDoc website - https://farmdoc.illinois.edu/ Ø Kansas State University - https://agmanager.info/ Ø Iowa State University - https://www.extension.iastate.edu/agdm/# Ø USDA Risk Management Agency (RMA) --- https://www.rma.usda.gov/ 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone - (507) 381-7960; E-mail - kentthiesse@gmail.com


]]>Wed, 28 Jan 2026 14:22:40 GMThttps://www.fairmontphotopress.com/kent-thiesse/2026-crop-insurance-decisionsDuring the next few weeks, farm operators will be finalizing their crop insurance decisions for the 2026 crop year. March 16th is the deadline to purchase crop insurance for the 2026 crop year. The Spring base prices for corn and soybeans will be finalized on March 2, 2026, and should be similar to crop insurance base prices in 2025. There have been increases to federal premium subsidies and other enhancements for crop insurance coverage in 2026. This should provide for some favorable crop insurance options and guarantees for the 2026 crop year at reasonable premium costs. Linking a revenue protection (RP) insurance policy with farm yields together with SCO and ECO insurance coverage can provide enhanced risk protection, which can be especially important in this era of low commodity prices.
Producers have several crop insurance policy options to choose from, including yield-only (YP) and revenue protection (RP and RPE) policies, SCO and ECO policies, and other private insurance options. In recent years, most farm operators have chosen revenue protection (RP) insurance options, which provide a guaranteed gross revenue per acre (yield x price). This guarantee is based on yield history (APH) on a farm unit times the Spring (base) price, which is the average of the CBOT prices during the month of February for December corn futures and November soybean futures.
As of January 26, the 2026 crop insurance Spring price estimates in the Upper Midwest for YP, RP, and RPE policies were estimated near $4.55 per bushel for corn and near $10.80 per bushel for soybeans. The 2026 Spring prices will be finalized on March 2. The current 2026 Spring price estimates compare to recent base prices $4.70/bu. for corn and $10.54/bu. for soybeans in 2025; $4.66/bu. for corn and $11.55/bu. for soybeans in 2024; $5.91/bu. for corn and $13.76/bu. for soybeans in 2023; and $5.90/bu. for corn and $14.33/bu. for soybeans in 2022. The final 2026 crop revenue will be the actual fam yield times the crop insurance harvest price, which is the average CBOT prices during October for December corn futures and November soybean futures.
An analysis for the past nineteen years (2007-2025) shows that the final crop insurance harvest price for corn has been lower than the Spring base price in thirteen of the nineteen years, including a decrease of ($.48) per bushel in 2025. The corn harvest price was also lower from 2013-2019. That trend was reversed from 2020-2022, when the harvest price for corn rose above the Spring price by +$.11 per bushel in 2020 +$.79 in 2021, and by +$.96 in 2022, before declining in 2023, 2024, and 2025. The only other years that saw an increase in the harvest price compared to the Spring price were 2010, 2011 and 2012.
An analysis of the past nineteen years for soybeans, shows that the harvest price has increased in seven years (2007, 2009, 2010, 2012, 2016, 2020 and 2021) and decreased in eleven years (2008, 2011, 2014-2019, 2022, 2023, 2024 and 2025), while staying the same in 2013. The range has been from an increase of +$2.84 per bushel in 2012 to a decline of ($3.00) per bushel in 2008. In 2025, the harvest price was $10.35/bu., which was a decrease of ($.19) per bushel from the Spring price. The range of price variation for both corn and soybeans over the years highlights the importance of having a solid crop insurance policy in place for the 2026 crop year.
Another insurance option that usually has a lower premium than a typical RP policy with harvest price protection is a RPE (harvest price exclusion) policy. An RPE policy functions similarly to a standard RP policy except that the guarantees on RPE policies are fixed at the base price level and are not affected by harvest prices that exceed the base price. The revenue guarantee for standard RP policies is increased for final insurance calculations, if average CBOT prices during the month of October are higher than the February CBOT prices, which is what occurred for corn and soybeans in both 2020 and 2021, as well as for corn in 2022. The RPE option is not recommended to protect against losses due to large crop disasters, such as a drought or other disaster that affects a large portion of the Midwest, or other situations that could lead to price increases during the year.
SCO and ECO Insurance Coverage Improved for 2026
New for 2026 - The Supplemental Coverage Option (SCO) coverage will be available to producers that choose the Price Loss Coverage (PLC) and the Ag Risk Coverage (ARC-CO) farm program options for the 2026 crop year. The farm program choice will no longer impact the SCO insurance coverage decision, as it had in the past. SCO coverage allows producers to purchase additional county-level crop insurance coverage up to a maximum of 86 percent coverage in 2026, which will increase to 90 percent coverage in 2027. For example, a producer that purchases an 80% RP policy for corn or soybeans could purchase an additional 6% SCO coverage in 2026.
The Enhanced Coverage Option (ECO) provides area-based insurance coverage from 86 percent up to 95 percent coverage, with producers having a choice between 90 or 95 percent ECO coverage. The purchase of ECO coverage is not linked to farm program enrollment. Producers can utilize both ECO and SCO together, in addition to their underlying RP, RPE, or YP insurance policy. SCO and ECO are county revenue-based insurance products that utilize the same crop insurance Spring prices and harvest prices as RP insurance policies; however, the biggest difference is that SCO and ECO utilize county level average yields, rather than the farm-level APH yields. As a result, the SCO and ECO insurance policies may achieve different results than the underlying RP policy. County yields are not finalized until May in the year following harvest, so any indemnity payments for SCO and ECO coverage would not be paid until early June in the following year.
The Federal government has increased the premium subsidies for both SCO and ECO coverage for 2026, which should make premiums more reasonable for crop insurance coverage options that include these products. For 2026, the 90 percent ECO coverage will have a premium subsidy of 80%, similar to SCO coverage, and 95 percent ECO coverage will have a premium subsidy of 65%. The added premium subsidies make the higher crop insurance coverage levels more affordable for 2026. The enhancements to SCO and ECO coverage allow farmers to reduce risk and insure a higher percentage of their expected 2026 crop production at a reasonable premium cost. Many crop insurance companies have combined SCO and ECO coverage with other private insurance buy-up policies to offer some very attractive risk management insurance packages for 2026.
“Enterprise Units” and “Optional Units”
“Enterprise units” combine all acres of a crop in a given county into one crop insurance unit, while “optional units” allow producers to insure crops separately in each individual township section. “Enterprise units” usually have a lower premium cost (approx. $5.00-$10.00 per acre less) compared to “optional units” for comparable RP and RPE policies. Producers should be aware that “enterprise units” are based on larger coverage areas, and do not necessarily cover losses from isolated storms or crop damage that affect individual farm units, such as damage from hail, wind, or heavy rains that have occurred in recent years. It is important to understand the difference in insurance coverage and to analyze the yield risk on each individual farm unit, when determining if paying the extra premium for insurance coverage with “optional units” makes sense.
“Bottom-Line” on 2026 Crop Insurance Decisions
Producers have the option to purchase RP and RPE insurance coverage levels from 50% to 85%, and losses are paid if the final crop revenue falls below the revenue guarantee. Given the tighter margins for both corn and soybeans, there may be a tendency to reduce the level of crop insurance coverage for 2026. However, producers need to closely analyze their risk exposure for the 2026 crop year and adjust their crop insurance coverage accordingly. The enhancements to SCO and ECO insurance coverage allows crop producers to greatly improve their risk protection at a fairly reasonable cost. Crop insurance remains one of the best risk management tools that is available for farm operators to protect their investment in crop production.
A reputable crop insurance agent is the best source of information to find out more details about the various crop insurance products that are offered, to get premium quotes, and to help finalize 2026 crop insurance decisions. Kent Thiesse, Farm Management Analyst, has prepared an information sheet titled: “2026 Crop Insurance Decisions”. To receive a free copy, send an email to: kenthiesse@gmail.com
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com
]]>Wed, 21 Jan 2026 14:25:03 GMThttps://www.fairmontphotopress.com/kent-thiesse/bearish-wasde-report-sets-a-negative-tone-for-2026The multiple USDA reports that are typically released in January are often known as being a “market mover”, and it appears that 2026 will continue that trend. The World Supply and Demand Estimates (WASDE) report released on January 12th seems to have set a negative tone for corn and soybean markets in the early months of 2026. USDA made a significant increase in the final 2025 corn production estimate, based on increasing the final 2025 record national average corn yield and increasing the 2025 harvested corn acres by over 1 million acres. The fairly large increase in the total corn supply, together with only a minor increase in corn usage estimates, resulted in a notable increase in projected ending stocks for corn, compared to a month earlier. The WASDE report also made some adjustments to soybean supply and demand data that were also viewed as negative for grain markets. The initial market reaction following the release of the WASDE report was a significant decrease in both corn and soybean prices on the Chicago Board of Trade (CBOT). 
CORN 
The updated National Ag Statistics Service (NASS) Crop Production Report for 2025 that was released on January 12th estimated the final 2025 U.S. average corn yield at the record level of 186.5 bushels per acre, which was an increase of 0.5 bushels per acre from the November estimate. The 2025 corn yield surpasses previous record U.S. yields of 179.3 bushels per acre in 2024 and 177.3 bushels per acre in 2023. The USDA 2025 corn yield estimate surpassed national average yield projection of nearly all grain market analysts. The overall average yield estimate by the analysts was 184 bushels per acre. The USDA corn yield estimates in January were increased significantly in Minnesota, Nebraska, Wisconsin, and North Dakota, compared to the previous yield estimates in November, 2025. 
The NASS report showed Minnesota as having a record corn 2025 yield at 201 bushels per acre, compared to 174 bushels per acre in 2024 and surpassing the previous record yield of 195 bushels per acre in 2022. Iowa is projected to have a corn yield of 210 bushels per acre in 2025, compared to 211 bushels per acre in 2024. Other projected state average corn yields for 2025 compared to 2024 yields are Illinois at 214 bushels per acre, compared to 217 bushels per acre; Indiana at 204 bushels per acre (record), compared to 198 bushels per acre; Ohio at 185 bushels per acre, compared to 177 bushels per acre; Nebraska at 194 bushels per acre (record), compared to 188 bushels per acre; Wisconsin at 188 bushels per acre (record), compared to 174 bushels per acre; South Dakota at 171 bushels per acre (record), compared to 164 bushels per acre; and North Dakota at 158 bushels per acre (record), compared to 149 bushels per acre. 
The latest WASDE report listed the total 2025 U.S. corn production at the record level of just over 17 billion bushels, which was increased from 16.75 billion bushels in November. The projected 2025 U.S. corn production was up 14.3 percent from 14.89 billion bushels in 2024, and was also above 15.34 billion bushels in 2023. The latest USDA report put the total demand for corn usage in 2025-26 at just under 16.4 billion bushels, which is an 8.2 percent increase from the 2024-25 corn usage. USDA is projecting corn export levels to increase by 342 million bushels in 2025-26, along with increases of 746 million bushels in corn used for feed and 164 million bushels in corn processed into ethanol. 
USDA is estimating 2025-2026 U.S. corn ending stocks at nearly 2.23 billion bushels, which was an increase of 198 million bushels from the December WASDE report. The estimated 2025-26 ending stocks are 43.5 percent higher than the final carryover of 1.55 billion bushels in 2024-25, and the current projected ending stocks also substantially exceeds the carryover of 1.76 billion bushels in 2023-24. The 2025-26 corn stocks-to-use ratio is now estimated at the relatively high level of 13.6 percent, which compares to ratios of 10.3 percent in 2024-25, as well as 11.8 percent in 2023-24 and 9.9 percent in 2022-23. The projected 2025-26 ratio is comparable to the relatively high stocks-to-use ratios of 13.7 percent in 2019-20 and 14.6 percent in 2018-19. The large available corn supply could limit the potential for short-term rallies in the cash corn market or local basis improvement in the coming months. 
USDA is estimating the U.S average on-farm cash corn price for 2025-26 at $4.10 per bushel, which is an increase of $.10 per bushel from the December estimate. The market year average (MYA) corn and soybean price estimates for 2025-26 are the expected average farm-level prices for the 2025 crop from September 1, 2025, through August 31, 2026; however, the MYA price does not represent estimated price for either the 2025 or 2026 calendar year. The projected 2025-26 corn price compares to final MYA price of $4.24 for 2024-25, $4.55 per bushel in 2023-24, $6.54 per bushel in 2022-23 and $6.00 per bushel in 2021-22. The current projected MYA price still exceeds the national average corn prices of $3.57 per bushel for 2019-20, $3.61 per bushel for 2018-19, and $3.36 per bushel in 2017-18. 
SOYBEANS 
The latest NASS report projects the 2025 U.S. average soybean yield at the record level of 53 bushels per acre, which was the same as the November estimate. The 2025 yield compares to recent final U.S. average yields of 50.7 bushels per acre in 2024, 50.6 bushels per acre in 2023, and 49.6 bushels per acre in 2022. Total U.S. soybean production for 2025 is estimated at 4.262 billion bushels, which is a decrease of 112 million bushels from the 2024 production level. The recent WASDE report estimates soybean demand at 4.257 billion bushels for the 2025-26 marketing year, which is a decrease of 164 million bushels from 2024-25 soybean demand levels. Soybean crush levels are expected to increase by 125 million bushels in the current marketing year; however, while soybean exports are expected to decline by 307 million bushels from 2024-25 levels, and would be 125 million bushels below 2023-24 export levels. 
The latest WASDE report estimated U.S. soybean ending stocks for the 2025-26 marketing year at 350 million bushels, which is an increase of 60 million bushels from the December report. The projected 2024-25 soybean ending stocks would be an increase of 25 million bushels from the 2024-25 carryout level of 325 million bushels. The updated 2025-26 projected ending stocks compares to other recent year-end carryout levels of 342 million bushels in 2023-24, 264 million bushels in 2022-23, and 274 million bushels in 2021-22. Current carryover levels are still well below the ending stocks of 525 million bushels in 2019-20 and 913 million bushels in 2018-19. 
The soybean stocks-to-use ratio for 2025-26 is now estimated at 8.2 percent, which is an increase from the final ratio of 7.4 percent in 2024-25, and compares to ending ratios of 8.3 percent in 2023-24, and 6.1 percent in both 2022-23 and 2021-22. The projected 2025-26 ratio is still considerably lower than the very high soybean stocks-to-use ratios of 23 percent for 2018-19 and 13.3 percent for 2019-20. The increase in the 2025-26 estimated soybean supply may limit opportunities for some short-term rallies in cash soybean prices in the coming months, unless weather issues develop in South America, or this coming growing season with the 2026 U.S. soybean crop. 
USDA is projecting the U.S. average farm-level (MYA) soybean price for the 2025-2026 marketing year at $10.20 per bushel, which is a decrease of $.30 per bushel from the December estimate. The estimated 2025-26 average soybean price compares to the final soybean MYA prices of $10.00 per bushel in 2024-25, $12.40 per bushel in 2023-24, $14.20 per bushel in 2022-23 and $13.30 per bushel in 2021-22. The 2025-26 MYA price estimate would still be considerably higher than the MYA soybean prices of $8.57 per bushel in 2019-20 and $8.48 per bushel in 2018-19, which occurred during the last trade war with China. 
Bottom Line following the January WASDE Report 
Both corn and soybean market prices had a very negative market response following the release of the WASDE report on January 12, with corn decreasing by over 24 cents per bushel and soybean prices declining by about 14 cents per bushel on the Chicago Board of Trade (CBOT) following the report. The USDA Grain Stocks report on January 12 indicated that as of December 1 there were 8.7 billion bushels of corn stored on farms in the U.S., including 1.45 billion bushels in Iowa and 1.2 billion bushels in Minnesota. It is likely that a high percentage of the bushels stored on farms are not yet priced, which means that the price decline on January 12 resulted in a lost asset value on the stored corn inventory of over $2 billion. A farmer that had 1,000 acres of corn in 2025 that yielded 220 bushels per acre would have 220,000 bushels of corn. If that corn is stored on the farm and not priced, that farmer lost nearly $53,000 in reduced value on his corn inventory immediately following the January WASDE report. 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com 


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