US agricultural belt is in the grip of a crisis: grain prices do not cover costs

Banks are tightening lending conditions, and agribusinesses are cutting thousands of jobs across rural America.

Depressed times have arrived for US farm states. Farmers are entering the new season amid low prices, sky-high costs, and an agonizing choice: how—or whether—to continue working. With an oversupply of grain putting pressure on the market, the crisis in the US agricultural economy is becoming systemic: from dealer lots overflowing with unsold tractors to declining profits at major agricultural holdings.

Financial Scissors: Costs Higher than Revenue

The situation in 2026 promises to be extremely dire. According to the US Department of Agriculture (USDA), corn production costs will increase by 3% and soybean production costs by 3.1% compared to last year. Meanwhile, market prices remain well below the breakeven point.

According to Reuters analysts, based on USDA data:

• Corn: The current selling price is about $4.10 per bushel, while the breakeven point is $5.03.
• Soybeans: The price is about $10.20 per bushel, while $12.80 is needed to break even.

“Right now, there’s not a single crop you can point to and say, ‘Here’s an opportunity.’ Everything is underwater,” says Iowa State University agricultural economist Chad Hart.

Credit crunch and bankruptcies

Banks, including one of the sector’s largest lenders, CoBank, have begun to sharply tighten their policies. The quality of loan portfolios is deteriorating: in the first nine months of 2025, the bank set aside $129 million for potential loan losses (compared to just $6 million in the same period a year earlier).

For many, time has already run out. In the first three quarters of 2025, the number of farm bankruptcy filings (under Chapter 12 of the US Bankruptcy Code) increased by 36% compared to the entire 2024 period. Lawyers note that while this procedure previously helped restructure debt, it is now increasingly leading to the complete liquidation of farms.

A Blow to the Machine-Building Industry and Rural Communities

The farm crisis has immediately impacted related industries. Tractor sales fell by almost 10%, and combine harvester sales by more than 35%. Due to a lack of funds to maintain old equipment, combine fires in fields have become more common in states like Kansas.

Major equipment manufacturers have begun mass layoffs:

• Deere & Co. has cut more than 2,000 jobs starting in 2023.
• AGCO plans to cut about 6% of its workforce.
• CNH Industrial announced hundreds of layoffs, citing weak demand and rising material costs caused by tariffs.

Experts warn that the hammer blow will hit not only factories but also social infrastructure. Falling farm incomes are leading to reduced tax revenues, threatening funding for rural schools, hospitals, and social programs.

Tags: USA, margin