Two recent reports from USDA provide a closer look at the U.S. cattle industry. Chad Smith has details on the numbers and market reaction.

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Key Takeaways

• U.S. cattle herd shows signs of stabilization. Total cattle inventory increased slightly for the first time since 2018, but the beef cow herd fell to 28.5 million head, a record low for the July report, indicating herd rebuilding remains limited.
• Replacement heifer numbers improved, but the calf crop remains historically small. Beef replacement heifers increased 3%, suggesting farmers and ranchers are beginning to retain females for breeding. However, the 2026 calf crop is projected at a record-low 32.5 million head, marking the ninth consecutive annual decline and constraining future herd growth.
• Feeder cattle supplies are expected to remain tight through 2027. Lower calf numbers and declining feedlot placements point to fewer feeder cattle available in the coming years. While the reopening of the U.S.-Mexico border will gradually increase feeder cattle imports, supplies are still expected to remain historically tight.
• Market signals are mixed as supply constraints clash with softer demand indicators. Tight cattle supplies remain supportive for long-term cattle prices, but recent declines in boxed beef values and the reopening of cattle imports from Mexico have added bearish pressure. Cattle prices have fallen sharply in recent weeks, though improving packer margins may help support processing activity going forward.

USDA’s July Cattle Inventory report offers a critical midyear snapshot of the U.S. cattle herd, including an estimate of the year’s calf crop. Released in tandem with USDA’s monthly Cattle on Feed report, the two datasets together provide a more comprehensive view of supply trends and herd dynamics.

July Cattle Inventory

According to the July Cattle Inventory report, the inventory of all cattle and calves in the United States totaled 94.2 million head on July 1, 2026, up 200,000 head, or less than 1%, from 94.0 million head on July 1, 2025. This marks the first increase in the July cattle inventory since 2018.

Despite the slight increase in total inventory, indicators of herd expansion remain mixed. All cows and heifers that have calved were estimated at 38.1 million head, unchanged from a year ago. Within that total, beef cows were estimated at 28.5 million head, down 200,000 head, or 1%, from 2025 and the smallest July inventory on record (the data goes back to 1973). In contrast, milk cows were estimated at 9.65 million head, up 200,000 head, or 2%, from last year.

One of the most closely watched measures in the report is the inventory of beef replacement heifers weighing more than 500 pounds, which was estimated at 3.8 million head, up 100,000 head, or 3%, from 2025. This increase represents the first meaningful sign of heifer retention and potential herd rebuilding in nearly a decade. Meanwhile, other heifers totaled 7.3 million head, down 100,000 head, or 1%, from last year. These animals remain a potential source of future breeding stock.

The report also estimated the 2026 calf crop at 32.5 million head, down 2% from 2025 and the smallest calf crop on record. This marks the ninth consecutive year of decline and remains a major constraint on future herd growth. These calves represent the pool of animals available either for breeding or for placement into feedlots in 2027 and 2028. As long as calf numbers continue to decline, producers face limitations in expanding the herd, regardless of retention decisions.

Overall, the report suggests stabilization rather than expansion of the U.S. cattle herd. The increase in beef replacement heifers is an encouraging sign and contributed to the modest rise in total cattle inventory. However, that gain was largely offset by a smaller beef cow herd, while growth in milk cow numbers accounted for much of the increase in total cattle inventory. A sustained increase in both the calf crop and total cattle inventory would provide a clearer indication that a broader expansion phase has begun.

Cattle on Feed

USDA releases a monthly Cattle on Feed report that tracks inventories in large commercial feedlots with capacities of 1,000 head or more. The July Cattle Inventory report complements that survey by providing a broader estimate of all cattle and calves on feed across U.S. feedlots of every size.

According to the July report, 13.2 million cattle and calves were on feed in all U.S. feedlots on July 1, 2026. Of that total, 11.37 million head were in feedlots with capacities of 1,000 head or more, up 2% from a year earlier and accounting for 86.2% of all cattle on feed, compared with 85.2% a year ago.

Within large feedlots, USDA estimated 7.12 million steers and steer calves on feed, up 236,000 head, or 3%, from last year. Heifers and heifer calves totaled 4.25 million head, up 10,000 head, or less than 1%. Steers and steer calves represented approximately 63% of cattle on feed, while heifers and heifer calves accounted for about 36%.

Recent placement and marketing activity highlights the increasingly tight supply. June placements totaled 1.40 million head, down 42,000 head, or 3%, from a year ago. This followed May placements that were down 10%, or 183,000 head, from May 2025. At the same time, June marketings were estimated at 1.66 million head, down 46,000 head, or 3%, from last year and the lowest June total on record.

The combination of declining placements and slower marketings suggests cattle are remaining in feedlots longer, contributing to heavier market weights. Slower slaughter rates have also allowed market-ready supplies to build in feedlots, while packers have reduced processing schedules amid tight cattle supplies and compressed margins. As a result, cattle are being fed to heavier weights before entering the packing sector, partially offsetting the impact of lower cattle inventories on beef production.

Feeder Cattle Supplies and Mexico

Mexico typically exports between 1.2 million and 1.5 million head of feeder cattle to the United States each year. These cattle are an important component of the U.S. beef supply chain, moving from border crossings into feedyards across the country before eventually entering packing plants.

This trade was disrupted in November 2024 when the United States closed the border to livestock imports following the detection of New World screwworm (NWS) in southern Mexico. The pest gradually spread northward and was eventually detected in the United States in June 2026. As of this article’s posting, there have been 42 confirmed NWS detections in the current U.S. outbreak: 41 cases in Texas and one in New Mexico.

The border closure has tightened feeder cattle supplies, particularly in border states such as Arizona, New Mexico and Texas, which depend heavily on Mexican cattle to support feedyards and maintain beef production. Reduced cattle imports have contributed to tighter supplies and higher beef prices.

Efforts to contain the pest have centered on the Sterile Insect Technique, a proven method for controlling NWS populations. A key milestone occurred on June 27, 2026, with the opening of a new sterile fly production facility in Metapa, Mexico. Prior to its opening, the only remaining production facility was located in Panama and produced approximately 100 million sterile flies per week. The Metapa facility is expected to produce 30 million flies per week by the end of August, with an increased capacity up to 100 million flies per week by the fall.

These advancements helped pave the way for the gradual reopening of cross-border cattle trade. On July 24, Secretary of Agriculture Brooke Rollins announced that imports would resume through the Douglas, Arizona, port of entry after a 30-day period, with two New Mexico ports scheduled to reopen thereafter. Reopening protocols include stringent treatment and inspection requirements. Imported cattle must pass through disinfectant dip vats and undergo additional inspections for open wounds or any additional signs of NWS. Animals showing evidence of NWS infestation or visible open wounds will be rejected and prohibited from entering the United States.

The phased reopening should help ease feeder cattle supply constraints over time while maintaining safeguards to prevent further spread of NWS.

Markets

The monthly reports and the announcement that the United States will reopen its border to livestock imports from Mexico were both released after markets closed on Friday, July 24. Overall, the reports provide mixed signals and are largely neutral for cattle markets, while the reopening of the border is viewed as bearish because it will increase cattle supplies over time.

These developments follow a sharp decline in cattle prices over the past month. August 2026 live cattle futures recently recorded a historic streak of losses over 15 consecutive trading days. In the cash market, the 5-area daily weighted average fed cattle price has fallen $29/hundredweight (cwt), or 11%, since June 25, 2026.

From a supply perspective, the strongest bullish takeaway from the reports is found in the feeder cattle market. A record-small calf crop and lower June placements both point to a tighter supply of feeder cattle later in 2026 and throughout 2027. While the reopening of the border to Mexican cattle imports will gradually increase feeder cattle availability, supplies are still expected to remain historically tight. Reduced feeder cattle numbers ultimately imply limited future fed cattle supplies, which should provide some support to cattle prices.

Demand

Boxed beef prices have weakened since late June. U.S. beef demand typically peaks around the Fourth of July holiday as summer grilling season reaches its height. Since reaching a high of $400.31/cwt on June 23, the Choice beef cutout value has declined $39.07/cwt, or roughly 10%, to $361.24/cwt on July 24.

Although seasonal declines in beef prices following the peak grilling season are common, the recent weakness raises questions about whether consumer demand is beginning to soften after several years of exceptional strength. If consumer demand is slowing, beef cutout values could continue to decline. If demand remains resilient, however, boxed beef prices may find support.

Both scenarios have important implications for packer profitability. While fed cattle prices have recently declined faster than beef cutout values, resulting in a modest improvement in the live-to-cutout spread, packer margins remain firmly in negative territory and have been for several months.

Conclusion

USDA's July Cattle Inventory and Cattle on Feed reports suggest the U.S. cattle industry remains in a period of stabilization rather than meaningful expansion. While the increase in replacement heifers provides an early signal that some producers may be positioning for herd rebuilding, record-low beef cow numbers and the smallest calf crop on record continue to limit growth potential. At the same time, lower feedlot placements point to tight feeder cattle supplies extending into 2027, even as the gradual reopening of live cattle imports from Mexico provides some relief.

For markets, the outlook remains mixed. Tight long-term cattle supplies remain supportive, but softer boxed beef prices, questions surrounding consumer demand, and increased imports from Mexico have added near-term pressure. The coming months will be critical in determining whether early signs of herd rebuilding gain momentum or whether supply constraints continue to define the cattle market cycle.

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American Farm Bureau Federation President Zippy Duvall commented today on House passage of a budget framework that includes market relief for farmers.

“We applaud members of the House of Representatives for recognizing the economic toll facing farm country and advancing farm aid as part of their reconciliation package. High production costs and weak commodity prices are expected to drive billions in losses across row crops in 2027, with additional losses facing specialty crop, alfalfa and sugar producers.

“Our attention now turns to the Senate where we hope to not only pass the market relief but also work in a bipartisan fashion to advance other critical priorities for agriculture this Congress including a reauthorized farm bill and year-round E-15.”

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As Congress works toward approving a budget, the House has authorized $12 billion in additional farm aid. Stephanie Hoff has the story.

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Utah Farm Bureau’s Miracle of Agriculture Foundation is making significant strides toward its goal of providing protein to food pantries in the state, while also giving a boost to 4-H, FFA and local ranchers.

The initiative’s successful pilot program with North and South Box Elder County Farm Bureaus resulted in the delivery of protein from animals purchased at the Utah State Fair to three local pantries in early 2025. The county Farm Bureaus also raised funds to provide financial support to the pantries, multiplying the impact of the partnership.

Following that success, the Miracle of Agriculture Foundation partnered with Carbon and Emery County Farm Bureaus, which delivered protein, also from animals purchased at the Utah State Fair, to two pantries in their area.

Additional counties joining the initiative in 2025 included Wasatch County and Salt Lake County. In total, in 2025, the Miracle of Agriculture Foundation, in partnership with local Farm Bureau leaders, donated 20,650 pounds of high-quality protein to 10 pantries across the state.

These early counties provided a blueprint for the initiative: The county Farm Bureau purchases animals from local 4-H and FFA participants through junior livestock auctions, typically at the Utah State Fair or a county fair, and pays to have it processed through the Miracle of Agriculture Foundation. The Foundation then works with county Farm Bureaus to donate the meat to a local pantry – or pantries.

Local Partnerships are Essential

Key to the effort’s success are county Farm Bureaus and their volunteer leaders. As the boots on the ground, they are known and trusted in their communities.

“Their local knowledge, connections and willingness to serve have opened doors with pantries, families and youth participants, helping the program grow stronger and make a real difference at the local level,” said Clayton Beckstead, executive director of the Utah Farm Bureau’s Miracle of Agriculture Foundation.

Providing More Than Protein: Leadership Development and Community Engagement

Utah Farm Bureau regional managers had an important role as mentors to county leaders, helping them build confidence in reaching out to local pantries, coordinating purchases at livestock auctions and organizing donation events. This experience not only strengthened the impact of the program in the community, but it also provided valuable leadership development opportunities to Farm Bureau volunteers, helping Utah Farm Bureau in one of its core goals: growing leaders within Farm Bureau.

The effort also highlighted farmers’, ranchers’ and Utah Farm Bureau’s commitment to local communities and feeding people.

“By connecting the dots between youth programs, local agriculture and food pantries, the project has created goodwill and strengthened Utah Farm Bureau’s presence across the state,” Beckstead said. “It has also provided an important educational element, helping counties and communities better understand where their food comes from and the vital role agriculture plays in their lives.”

State Awards of Excellence

The Miracle of Agriculture Foundation’s partnership with county Farm Bureaus to provide protein to food pantries across Utah was recognized with a 2026 Award of Excellence in the Coalitions & Partnerships category. The award was presented at the 2026 American Farm Bureau Convention in January in Anaheim.

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The cost and availability of fertilizer hit home for thousands of farmers this year. Chad Smith tells us the American Farm Bureau Federation analyzed possible solutions to future fertilizer challenges.

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Do Americans mistrust farmers and ranchers? If you ask most farmers and ranchers, they’ll say they absolutely think that’s the case. I understand why. There are loud voices critical of agriculture that can quickly fill a room or social media platform. It can seem like they speak for all Americans.

Here's the simple truth: they do not.

Farmers are some of the most trusted people in America. Not only according to Farm Bureau's national polling, but also affirmed by Gallup polls, which consistently rank agriculture in the top five sectors. In their 2020 and 2025 polls, farming was the top-rated sector by Americans.

We've been tracking public trust in farmers since 2019 with our partners at Morning Consult and our national polling also showed farmers topping the chart in trust levels in 2020 and 2025. In fact, farmers have consistently been in the top three when it comes to public trust. Doctors and nurses sometimes slide into first place, which is not bad company to keep.

It’s an impressive statistic that public trust in farmers has remained at 80% or higher since we began tracking it. Congress would love to have a trust level half that high.

When I share this data with Farm Bureau members, they’re often surprised. They’re a humble group, in general, that views their work as more of a calling than a job – one few people outside of agriculture understand. So, for them to be in the number one spot in one of the most important measurements across the social landscape sometimes leaves them speechless. For good reason.

You can't buy trust. You can't manufacture it. You can't demand it. It is earned. And it is declining societally as polarization increases and nefarious intent is assigned to people and groups based solely on differences of opinion. It’s impressive that farmers and ranchers remain above the fray.

But they are correct in believing that few people in the U.S. understand agriculture. That’s not surprising when 98% of the population has no direct connection to a farm. The nearly 2 million farmers and ranchers who make up the remaining 2% are pleased and proud to be the country's providers. But the disconnect is dangerous and those in agriculture would be wise to pay attention to it.

The sky-high trust in farmers does not extend to some farming practices. If public concerns go unanswered, there is potential for an erosion of trust in the people behind the practices. The need for effective engagement has never been higher. But it’s a challenge in the agricultural sector for a variety of reasons. A big one: farmers will be the first to tell you operating a farm is often a sunup to sundown job. Many hold jobs off the farm in order to be able to afford to be farmer. So, making time to engage with people who have questions about farming, whether digitally or at city hall, doesn’t always top the priority list. Farmers also tend to live private lives and like it that way. So, sharing their story can be uncomfortable and seem frivolous (to them). The data tells us it’s anything but frivolous.

When farmers engage and explain why they use the practices they do, public opinion shifts. We’ve seen it happen time and again. In fact, our polling indicates that when the public has a chance to interact with farmers, trust increases nearly 20%. That’s almost eye-popping, but not surprising. In a world where AI-generated content and misinformation campaigns leave the public wondering what to believe, they crave authenticity above all.

That’s why a selfie recorded by a farmer in the field can garner more interest and engagement than a professionally produced and narrated video about farming. This not only presents an opportunity for farmers, it’s a red-carpet invitation, dirty jeans and all. The question is whether farmers will RSVP.

There is no question agriculture has come a long way when it comes to engaging with the public. Whether as a digital influencer building an audience or operating a mobile ag lab that visits schools or as a witness delivering testimony at the statehouse or to Congress, farmers and ranchers increasingly recognize the importance of engaging and are diving in, despite their already full plates. That’s admirable. It will serve all of agriculture well to preserve one of the most precious resources of our time: social trust.

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Prompted by concerns about dwindling interest in running for local office, Kansas Farm Bureau launched Engaged Kansas in February 2023. This nonpartisan and non-policy-specific initiative brings together leading Kansas nonprofits and other organizations to encourage and support civic-minded individuals to consider public service.

Local leaders are incredibly influential in rural communities in Kansas because they make key decisions about many of the things that impact a rural community’s ability to thrive and provide necessary off-farm employment for farmers and ranchers. According to USDA, more than 50% of farmers’ household incomes come from off-farm employment, which provides income to keep farms in business and often provides health insurance.

Despite the importance of these local elected positions, there often aren’t enough thoughtful, intentional people willing to step into them.

Overcoming Barriers to Entry

When asking Kansas Farm Bureau members and community leaders if they would consider running for public office, the two most common responses were related to:

• not understanding the roles and responsibilities of public offices; and
• not knowing how to run a successful campaign.

Kansas Farm Bureau then launched an educational campaign to increase the understanding of roles, responsibilities and expectations of public office, as well as to provide neutral and independent resources to improve the campaign and leadership skillsets of Kansans interested in elected office.

Expanding With Partners

Once Kansas Farm Bureau finalized its goals, they invited other organizations with a vested interest in helping Kansas communities thrive by finding the right people for leadership positions to support Engaged Kansas. That support comes in the form of publicly available resources, educational opportunities and using their respective networks to promote Engaged Kansas.

Partners include Kansas Association of Counties, Kansas Association of School Boards, Kansas Chamber of Commerce, Kansas Bankers Association, Kansas Medical Society and Kansas Association of Realtors, among others.

Getting the Word Out

Along with sharing Engaged Kansas’ resources through their partners’ networks, Engaged Kansas has a website and utilizes Facebook, X and LinkedIn. Kansas Farm Bureau shared the initiatives and resources with their members via their newsletter for voting members, e-newsletter and their social media platforms.

Engaged Kansas also targets communications to all state legislators, political party leaders, community Chamber directors, commodity group leaders and candidates for elected office

Strong Interest

Kansas Farm Bureau staff has delivered Engaged Kansas presentations to more than 3,000 people in more than 75 Farm Bureau, commodity and community organizations — and the requests continue to come in.

Back to School – Campaign School

One of Engaged Kansas’ offerings is a two-day Campaign School, using the American Farm Bureau Federation’s (AFBF) Campaign School curriculum. The AFBF Campaign School’s proven and empowering tactics have been a vital asset to the coalition, gaining broad acceptance and continued growth, both inside and outside of typical Kansas Farm Bureau networks.

When a shorter campaign school program was requested, AFBF and Kansas Farm Bureau built a four-hour mini session, which Kansas Farm Bureau staff deliver. The mini session provides a brief but thorough resource to those interested in seeking elected office and offers a preview of the two-day campaign school.

Kansas Farm Bureau staff has delivered mini sessions to more than 175 Kansans interested in a wide range of offices.

A Collegiate Campaign workshop on the Kansas State University campus was developed and presented as well for on- and off-campus organization leaders. Others continue to be planned, offering encouragement and support to young potential elected leaders.

State Awards of Excellence

Engaged Kansas earned Kansas Farm Bureau a 2026 Award of Excellence in the Coalitions & Partnerships category. The award was presented at the 2026 American Farm Bureau Convention in January in Anaheim.

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Several years of high inflation and low commodity prices, coupled with volatile production costs, are continuing to squeeze farmers financially. These forces are projected to hit farmers with $32 billion in losses for the major row crops in 2027 after a projected loss of $31 billion in 2026. Fruit, vegetable, nut and other specialty crop farmers faced billions of dollars in losses in 2025, with difficult market conditions continuing throughout 2026. American Farm Bureau Federation economists analyzed the losses felt across the farm economy in the latest Farm Bureau Intel.

The Farm Bureau Intel states, “Corn losses are projected to increase from $131 per acre in 2026 to $167 per acre in 2027. Soybean losses are projected to increase from $80 per acre to $138 per acre, wheat losses from $114 per acre to $145 per acre and cotton losses from $342 per acre to $406 per acre. Rice, sorghum, oats, barley and peanuts are also projected to remain below breakeven.”

Specialty crop producers are facing many of the same cost and market pressures. The Farm Bureau Intel outlines six representative specialty crops - almonds, apples, blueberries, lettuce, potatoes and strawberries - with “over $7 billion in estimated 2025 economic losses as labor, input, compliance and capital costs outpaced farm-level returns. Available 2026 market data show that conditions for specialty crop producers have not broadly improved.” These crops account for only about one-quarter of specialty crop receipts.

AFBF President Zippy Duvall also sent a letter to congressional leaders today in support of market relief. Cumulative uncovered losses across the farm economy exceed $12 billion and are being felt across many sectors of agriculture. He wrote, “Farms support rural communities as well as the jobs that keep those communities strong. Every farm lost takes with it generations of knowledge, community leadership, and the heartbeat of local economies. As those farms disappear, America’s food security is put at greater risk.”

Longer-term policy solutions are also needed to strengthen the farm economy beyond immediate assistance. A new, modernized farm bill, protecting interstate commerce, risk management coverage for specialty crop farmers and policies like year-round E15 can help improve demand and reduce the risk of more farm closures.

Read the letter to Congress here.

Read the full Farm Bureau Intel here.

To subscribe to Farm Bureau Intel, click here.

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Key Takeaways

• Global instability is pushing production costs higher. Fertilizer and fuel costs were already elevated heading into 2026, and the conflict with Iran has added further pressure to those markets.
• AFBF analysis shows losses are expected to deepen in 2027. AFBF estimates that without federal assistance, farmers growing nine principal crops will lose $32 billion (national average returns over total costs) in 2027, compared to $31 billion in 2026. On a per-acre basis, every crop analyzed is projected to remain below breakeven in 2027.
• Fruit, vegetable, nut and other specialty crop losses remain largely uncovered. AFBF estimates farmers growing six representative crops faced more than $7 billion in 2025 losses. The ASCF program provides welcome relief, but payment rates cover only about 5% to 28% of estimated 2025 per-acre losses for the crops analyzed. Available 2026 data show difficult market conditions continue, including below-breakeven prices, acreage reductions and weak margins across major specialty crop sectors.
• Additional economic assistance is needed and is supported on a bipartisan basis. Additional financial support is critical to offset trade-related losses, rising input costs and the deep financial pressure facing U.S. row crop, specialty crop, hay and sugar producers. This support would help stabilize the farm economy, sustain rural communities and maintain a strong domestic food supply.
• Longer term, policy solutions to help stabilize the farm economy are needed. Such as year-round E15; a modernized five-year farm bill that protects interstate commerce from a patchwork of state legislation; a legislative fix to agricultural labor; and stronger risk management tools, including better data collection and publication to support more effective options for specialty crop producers.

Crop farmers continue to face elevated production costs, lower commodity prices and tight margins – with no relief on the horizon. AFBF analysis projects 2027 will mark a sixth year of negative returns over total costs for most major row crops. Specialty crop farmers are experiencing similar financial strain, facing expected below-breakeven prices and acreage reductions across major fruit, vegetable and tree nut sectors in 2026, even as limited public data make the full scale of losses difficult to measure. At the same time, fertilizer and fuel prices remain volatile, with the Iran conflict adding additional pressure to those markets.

Row Crops

USDA’s June 30 Acreage report provides an updated acreage baseline for estimating the scale of economic losses across major row crops. Total U.S. principal crop acres are estimated to be down 1.91 million acres from 2025, a 0.6% decline overall. Corn planted area is estimated at 95.3 million acres, down 3% from last year but still the fourth-highest planted corn acreage in the U.S. since 1944. Soybean planted acreage is estimated at 85.4 million acres, up 5% from 2025, while all wheat planted area is estimated at 42.7 million acres, down 6% from last year.

Using USDA-Economic Research Service cost of production data, World Agricultural Supply and Demand Estimates data, USDA-National Agricultural Statistics Service acreage data and Food and Agricultural Policy Research Institute projections, AFBF estimates national average returns over total costs, without federal assistance, at a $32 billion loss across nine principal crops in 2027, deepening from a $31 billion loss in 2026. These 2026 and 2027 figures represent projected, not realized, losses. Producers still have time to adjust acreage and input decisions, while weather, yields, market prices and other factors could change the final outcome. The 2027 estimate assumes crop prices remain at 2026 levels, though actual prices will vary in response to changing market conditions

On a per-acre basis, losses are projected across every major crop analyzed. Corn losses are projected to increase from $131 per acre in 2026 to $167 per acre in 2027. Soybean losses are projected to increase from $80 per acre to $138 per acre, wheat losses from $114 per acre to $145 per acre and cotton losses from $342 per acre to $406 per acre. Rice, sorghum, oats, barley and peanuts are also projected to remain below breakeven.

In total dollar terms, corn accounts for the largest projected loss at $15.8 billion, followed by soybeans at $11.6 billion, wheat at $6.6 billion and cotton at $3.8 billion. Combined, losses across the nine principal crops are projected to reach $41.4 billion in 2027.

Specialty Crops

Specialty crop producers face many of the same cost and market pressures, but the full scale of losses is more difficult to quantify because consistent, timely public data on production costs and prices received by farmers is lacking for many crops. This data gap should not be mistaken for a lack of hardship. AFBF’s earlier analysis of almonds, apples, blueberries, lettuce, potatoes and strawberries, six crops representing roughly one-quarter of specialty crop receipts, identified over $7 billion in estimated 2025 economic losses as labor, input, compliance and capital costs outpaced farm-level returns.

Available 2026 market data show that conditions for specialty crop producers have not broadly improved. For example, potato growers planted 873,000 acres in 2026, down 3% from 2025 and the lowest level since 1952. AFBF’s earlier analysis estimated a 2025 weighted open-market potato price of $6.88 per hundredweight, already well below average full production costs of $12.25. In early 2026, analysts reported some uncontracted potatoes selling for just $2 to $3 per hundredweight and continued to describe the market as unprofitable. Other specialty crop markets show a similar lack of recovery. In June, agricultural analysts continued to rate both apple and wine grape producers as unprofitable.

Although some specialty crop prices have strengthened, those gains have been limited. Almond prices strengthened in May as the projected 2026 crop fell below the five-year average, partly after growers removed acreage or reduced production activities in response to several years of weak margins. California strawberry prices also increased after weather reduced available volume. In both cases, stronger prices were tied at least partly to tighter supplies, while labor, fertilizer, energy, compliance and capital costs remained elevated. When higher prices result from weather-related production losses or acreage removals, growers also have less product to sell, limiting any improvement in farm-level revenue and leaving overall margins under pressure.

Recent economic conditions also point to a shrinking domestic specialty crop footprint. Since 2000, U.S. vegetable acreage has declined 41%, while production has fallen 24%, from 37 million metric tons to 28 million in 2024. Fruit acreage, including citrus, has declined 37%, while production has fallen 48%, from 51 million metric tons to 26 million. Tree nut production strengthened during years of stronger markets, peaking at 3.7 million metric tons in 2020, but had fallen to 3.2 million by 2024. These declines reflect the cumulative effects of weak market returns, rising labor costs, import competition, weather, disease, and water constraints. Although they do not provide a direct measure of producer losses, they show how sustained financial and production pressures are shrinking domestic specialty crop capacity.

Why More Economic Assistance is Needed

Congress and the administration have already taken important steps to respond to these economic headwinds. In late 2024, Congress passed the American Relief Act, which included $10 billion in aid for row crop farmers through the Emergency Commodity Assistance Program (ECAP) to address economic losses from the 2023 and 2024 crop years. The Farmer Bridge Assistance Program provided $11 billion in short-term economic relief to row crop farmers, while USDA initially reserved another $1 billion for specialty crop and sugar assistance for losses felt in 2025. USDA later finalized $1.625 billion specifically for eligible fruit, vegetable and tree nut growers through the Assistance for Specialty Crop Farmers (ASCF) Program, an increase from the amount originally set aside, with sugar assistance addressed separately. Together, these programs provided more than $23 billion in economic assistance.

Through H.R. 1, Congress also made several significant longer-term improvements to commodity programs and the farm safety net. Higher reference prices, expanded crop insurance options and other provisions will provide meaningful support as they are implemented, with the first Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) payments expected in October 2026.

Since the enactment of H.R. 1, fertilizer, fuel and other production costs have continued to rise, while prices for many major commodities have remained flat or declined. As a result, row crop, specialty crop and alfalfa farmers are entering the fall under intense financial strain. Some sectors of agriculture are projected to face a seventh consecutive year of losses in 2027, leaving cumulative shortfalls that remain well beyond the support provided to date.

The scale and persistence of those losses have drawn bipartisan backing from President Trump and leaders of both parties on the House and Senate Agriculture committees. In late June, the president requested more than $11 billion in additional agricultural assistance from Congress. The proposal would provide $10 billion for row and specialty crop producers with crops planted in 2026, with another $1.1 billion directed to Florida producers affected by winter storms. The proposal also urges Congress to pass year-round E15. Congressional work to assemble this supplemental package and determine program details are still needed. The final package must be sufficiently robust and broadly structured to reflect the depth of losses across agriculture.

Economic Support Needed Now

Multiple years of high input costs, declining crop prices, trade uncertainty, global energy volatility and negative margins have weakened farm balance sheets and reduced working capital. Without additional support, more farmers will face difficult decisions about whether they can continue operating into the next crop year.

Near-term economic assistance is needed to help farm families offset trade-related losses and increased input costs intensified by geopolitical conflict.

Longer-term policy solutions are also needed to strengthen the farm economy beyond immediate assistance. Swift implementation of farm bill improvements; protecting interstate commerce from a patchwork of state laws; stronger risk management tools, including better data collection and publication to support more effective options for specialty crop producers; and domestic market-expanding policies like year-round E15 can help improve demand, provide certainty and reduce the risk of further farm closures.

Together, short-term assistance and long-term policy solutions will help protect rural communities and ensure farmers can continue producing the food, fuel and fiber Americans rely on.

AFBF analysis estimates national average returns over total costs using USDA ERS cost of production data, USDA WASDE estimates, USDA FSA prices, USDA NASS acreage data and FAPRI projections. Estimates are intended to provide a national view of crop sector financial conditions and will vary by farm, region, yield, marketing decisions and cost structure.

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