Earlier this year, an article in&nbsp;Southern Ag Today&nbsp;titled&nbsp;<a href="https://southernagtoday.org/2026/02/02/the-outlook-for-interest-rates-in-2026/">The Outlook for Interest Rates in 2026</a>&nbsp;examined how interest rates might change in 2026 based on the Federal Open Market Committee’s (FOMC)&nbsp;Summary of Economic Projections. This article reviews those early-2026 projections, compares them with the FOMC’s actual policy decisions, and discusses what changes in the economic environment might mean for interest rates in 2027.&nbsp;



Table 1 summarizes the economic projections of the twelve FOMC members at the December 2025 and March 2026 meetings. At the start of the year, most FOMC members believed a federal funds rate between 2.9% and 3.6% was the appropriate path for 2026. At the time, the FOMC’s target range for the federal funds rate was 3.5%- 3.75%, implying a single quarter-point rate cut in 2026 was likely. However, at its September meeting, the FOMC raised the federal funds rate target range by a quarter point to 3.75%-4.0%. In addition, the FOMC’s September Summary of Economic Projections indicated that most members now favored a federal funds rate between 4.0% and 4.4% in 2026 (Table 2).



Two factors likely explain the change in the FOMC’s monetary policy path. First, the FOMC&#8217;s composition changed this year. In May, Kevin Warsh replaced Jerome Powell as the Chair of both the Federal Reserve and the FOMC. At the same time, four regional Federal Reserve bank presidents rotated off the committee, and four new presidents joined, as is standard practice each year. The addition of five new members may have shifted the board&#8217;s composition, leading to a more hawkish stance on inflation.&nbsp;



The second factor likely influencing the FOMC’s decisions this year is the trajectory of inflation in 2026, as shown in Figure 2. In January, annual inflation in the Personal Consumption Expenditures (PCE) index, the FOMC’s preferred measure of inflation, was 2.73%. By August, annual inflation had risen to 3.45% due to higher tariffs, the Middle East conflict, and resulting increases in input and energy costs across multiple sectors of the economy (FOMC 2026). These events put pressure on the FOMC to reverse course and raise the federal funds rate.



What does this mean for the final two months of 2026 and into 2027? The most likely scenario is higher rates, at least in the short term. If the FOMC’s September projections are accurate, a quarter-point increase at its December meeting would not be unexpected. The long-term outlook is less certain. According to the September summary, the median projection is for the federal funds rate to hold steady at 4.1% next year. How the FOMC manages monetary policy will depend on inflation&#8217;s trajectory and the economy&#8217;s strength. If the U.S. economy shows signs of a recession, the FOMC may feel compelled to lower rates.



If the FOMC raises the federal funds rate in December and keeps the target rate between 4.0% and 4.25% in 2027, expect higher agricultural loan rates as well. Agricultural rates rose in the third quarter of 2026, possibly in anticipation of the committee’s September decision. Figure 2 offers insight into where agricultural rates may end up next year. For most of 2025, the FOMC held the federal funds rate steady between 4.25% and 4.5%. At the same time, long- and intermediate-term agricultural rates were near 8.0%, while short-term rates were closer to 8.5%. The actual rate a borrower receives will depend on their relationship with the lender and their perceived creditworthiness; however, as producers begin planning for 2027, they should expect to pay higher interest rates on operating loans next year.&nbsp;&nbsp;



Table 1. Summary of FOMC Committee Member Projections, December 2025 and March 2026



<figure class="wp-block-table is-style-stripes has-small-font-size"><table><tbody><tr><td>&nbsp;</td><td class="has-text-align-center" data-align="center" colspan="2">Median (%)</td><td class="has-text-align-center" data-align="center" colspan="2">Central Tendency (%)1</td><td class="has-text-align-center" data-align="center" colspan="2">Range (%)</td></tr><tr><td>&nbsp;</td><td class="has-text-align-center" data-align="center">December</td><td class="has-text-align-center" data-align="center">March</td><td class="has-text-align-center" data-align="center">December</td><td>March</td><td class="has-text-align-center" data-align="center">December</td><td class="has-text-align-center" data-align="center">March</td></tr><tr><td>Change in Real GDP</td><td class="has-text-align-center" data-align="center">2.3</td><td class="has-text-align-center" data-align="center">2.3</td><td class="has-text-align-center" data-align="center">2.1 &#8211; 2.5</td><td>2.2 &#8211; 2.5</td><td class="has-text-align-center" data-align="center">2.0 &#8211; 2.6</td><td class="has-text-align-center" data-align="center">2.1 &#8211; 2.7</td></tr><tr><td>Unemployment Rate</td><td class="has-text-align-center" data-align="center">4.4</td><td class="has-text-align-center" data-align="center">4.4</td><td class="has-text-align-center" data-align="center">4.3 &#8211; 4.4</td><td>4.3 &#8211; 4.5</td><td class="has-text-align-center" data-align="center">4.2 &#8211; 4.6</td><td class="has-text-align-center" data-align="center">4.3 &#8211; 4.6</td></tr><tr><td>PCE Inflation</td><td class="has-text-align-center" data-align="center">2.4</td><td class="has-text-align-center" data-align="center">2.7</td><td class="has-text-align-center" data-align="center">2.3 &#8211; 2.5</td><td>2.6 &#8211; 3.1</td><td class="has-text-align-center" data-align="center">2.2 &#8211; 2.7</td><td class="has-text-align-center" data-align="center">2.3 &#8211; 3.3</td></tr><tr><td>Federal Funds Rate</td><td class="has-text-align-center" data-align="center">3.4</td><td class="has-text-align-center" data-align="center">3.4</td><td class="has-text-align-center" data-align="center">2.9 &#8211; 3.6</td><td>3.1 &#8211; 3.6</td><td class="has-text-align-center" data-align="center">2.1 &#8211; 3.9</td><td class="has-text-align-center" data-align="center">2.6 &#8211; 3.6</td></tr><tr><td colspan="7">1&nbsp;The central tendency represents the range of projections, excluding the 3 highest and 3 lowest values.</td></tr></tbody></table></figure>



Table 2. Summary of FOMC Committee Member Projections, September 2026



<figure class="wp-block-table is-style-stripes has-small-font-size"><table><tbody><tr><td>&nbsp;</td><td colspan="2">Median (%)</td><td colspan="2">Central Tendency (%)1</td><td colspan="2">Range (%)</td></tr><tr><td>&nbsp;</td><td>2026</td><td>2027</td><td>2026</td><td>2027</td><td>2026</td><td>2027</td></tr><tr><td>Change in Real GDP</td><td>2.3</td><td>2.4</td><td>2.2 &#8211; 2.4</td><td>2.2 &#8211; 2.6</td><td>2.1 &#8211; 2.6</td><td>2.0 &#8211; 2.9</td></tr><tr><td>Unemployment Rate</td><td>4.1</td><td>4.1</td><td>4.1 &#8211; 4.2</td><td>4.0 &#8211; 4.2</td><td>4.0 &#8211; 4.3</td><td>4.0 &#8211; 4.5</td></tr><tr><td>PCE Inflation</td><td>3.7</td><td>2.3</td><td>3.5 &#8211; 3.7</td><td>2.2 &#8211; 2.5</td><td>2.9 &#8211; 3.8</td><td>2.0 &#8211; 2.6</td></tr><tr><td>Federal Funds Rate</td><td>4.1</td><td>4.1</td><td>4.1 &#8211; 4.4</td><td>3.6 &#8211; 4.4</td><td>3.9 &#8211; 4.4</td><td>3.1 &#8211; 4.4</td></tr><tr><td colspan="7">1&nbsp;The central tendency represents the range of projections, excluding the 3 highest and 3 lowest values.</td></tr></tbody></table></figure>



Figure 1. Agricultural Loan Rates, Q1 2023 – Q3 2026



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="981" height="600" src="https://southernagtoday.org/wp-content/uploads/2026/10/6.45.1-F1.png" alt="" class="wp-image-45036" srcset="https://southernagtoday.org/wp-content/uploads/2026/10/6.45.1-F1.png 981w, https://southernagtoday.org/wp-content/uploads/2026/10/6.45.1-F1-768x470.png 768w" sizes="auto, (max-width: 981px) 100vw, 981px" /></figure>



Figure 2. Annual Personal Consumption Expenditures Index (measure of Inflation) compared to the Federal Funds Rate, January-August 2026



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="981" height="610" src="https://southernagtoday.org/wp-content/uploads/2026/10/6.45.1-F2.png" alt="" class="wp-image-45037" srcset="https://southernagtoday.org/wp-content/uploads/2026/10/6.45.1-F2.png 981w, https://southernagtoday.org/wp-content/uploads/2026/10/6.45.1-F2-768x478.png 768w" sizes="auto, (max-width: 981px) 100vw, 981px" /></figure>



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References



Board of Governors of the Federal Reserve System (US), Federal Funds Effective Rate [FEDFUNDS], retrieved from FRED, Federal Reserve Bank of St. Louis;&nbsp;<a href="https://fred.stlouisfed.org/series/FEDFUNDS">https://fred.stlouisfed.org/series/FEDFUNDS</a>.



Board of Governors of the Federal Reserve System (US), Bank Prime Loan Rate [MPRIME], retrieved from FRED, Federal Reserve Bank of St. Louis;&nbsp;<a href="https://fred.stlouisfed.org/series/MPRIME">https://fred.stlouisfed.org/series/MPRIME</a>.



Board of Governors of the Federal Reserve System (US), Agricultural Survey, retrieved from the Federal Reserve Bank of Dallas;&nbsp;<a href="https://www.dallasfed.org/research/surveys/agsurvey">https://www.dallasfed.org/research/surveys/agsurvey</a>.



Board of Governors of the Federal Reserve System (US), December 30, 2025: FOMC Projections Materials, Accessible Version.&nbsp;&nbsp;Retrieved from:&nbsp;<a href="https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20251210.htm">https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20251210.htm</a>.



Board of Governors of the Federal Reserve System (US), March 18, 2026: FOMC Projections Materials, Accessible Version.&nbsp;&nbsp;Retrieved from:&nbsp;<a href="https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260318.htm">https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260318.htm</a>.&nbsp;&nbsp;



Board of Governors of the Federal Reserve System (US), September 16, 2026: FOMC Projections Materials, Accessible Version.&nbsp;&nbsp;Retrieved from:&nbsp;<a href="https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm">https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm</a>.



Board of Governors of the Federal Reserve System (US), September 16, 2026: Minutes of the Federal Open Market Committee.&nbsp;&nbsp;Retrieved from:&nbsp;<a href="https://www.federalreserve.gov/monetarypolicy/fomcminutes20260916.htm">https://www.federalreserve.gov/monetarypolicy/fomcminutes20260916.htm</a>.



U.S. Bureau of Economic Analysis, Personal Consumption Expenditures: Chain-type Price Index [PCEPI], retrieved from FRED, Federal Reserve Bank of St. Louis;&nbsp;<a href="https://fred.stlouisfed.org/series/PCEPI">https://fred.stlouisfed.org/series/PCEPI</a>.&nbsp;&nbsp;

An Updated Outlook for Interest Rates in 2026 and 2027

Authors: Chrystol Thomas, Assistant Professor and Extension Specialist, Texas A&amp;M AgriLife Extension, and Rachel Carter, Extension Specialist II, Center for Government and Community Development, Mississippi State University Extension



In a 2025&nbsp;<a href="https://southernagtoday.org/2025/03/21/developing-rural-economic-opportunities-through-agritourism/">Southern Ag Today article</a>, Britwum and Thomas (2025) highlighted that agritourism creates new economic opportunities for rural communities by connecting consumers with agriculture. According to the Global Agritourism Network,&nbsp;“Agritourism is an agricultural diversification activity that results from the synergistic intersection of agriculture and tourism. Agritourism offers authentic experiences related to agricultural production that showcase the tangible and intangible resources of the region or locality.”<a href="https://globalagritourismnetwork.org/definition-and-values/"></a>



Agritourism presents unique experiences and business models with its blending of agriculture, a more production focused industry with tourism, an experience-based industry. Agritourism is also a broad concept that can incorporate value added products, outdoor recreation, education, and entertainment. With this blending of industries and continued high public interest in understanding the origin of the food they consume, agritourism presents an opportunity for producers to increase farm revenue, potentially put into production marginal land, create employment opportunities, and build appreciation for agriculture.&nbsp;



However, it is not as easy as 1, 2, 3. Adding another component to an existing farm operation requires a lot of insights and business development knowledge and concepts. Therefore, though agritourism sounds like a lot of fun, and it can be, the industry is complex, and at times challenging for producers. To be successful in agritourism producers must determine how to create authentic experiences that fit their operations, meet visitor demand, abide by regulations, maintain safety, and generate a profitable revenue stream. This article highlights some of the challenges associated with agritourism and strategies for success.



Agritourism operators face a combination of financial, labor, marketing, liability, and infrastructure challenges, although the relative importance of these barriers varies by region. Hollas et al. (2022) found that Southern operators were 1.3 times more likely than Northeastern operators to report liability challenges and 1.6 times more likely to report e-connectivity challenges. Southern operators were less likely than Northeastern operators to report state and local regulatory challenges. These findings suggest that policy responses should reflect regional differences, with improved rural broadband access and affordable liability insurance among the priorities for the South (Hollas et al., 2022).



Findings from the national study by Whitehouse et al. (2026) reinforce the importance of labor and financial constraints. Labor, time management, and having adequate time for marketing were among the challenges most frequently rated at least somewhat challenging, while insurance costs and availability, labor, and the monetary cost of marketing were among those most frequently rated very challenging. Respondents also identified grants and other financial resources, social media marketing and management, and legal and liability information as important forms of support (Whitehouse et al., 2026). These findings are consistent with Connolly et al. (2024), whose study of agritourism and direct-marketing farms in the Northeast documented labor shortages and the operational adjustments farmers made in response.&nbsp;



The 2024 National Agritourism Producer Survey, published by the Northeast Regional Center for Rural Development, identified financial resources and regulatory compliance as important challenges for agritourism operators. Among regulatory issues, civil liability was the most challenging: 53.1% of respondents rated it a moderate or greater challenge. Designation of agritourism operations as retail sites ranked second (45.7%), followed by food safety requirements (39.4%) and building codes (38.9%). Retail-site designation may create additional costs by requiring investments in facilities and infrastructure. These findings highlight the need for accessible liability guidance, affordable insurance, clear regulatory information, and financial and technical assistance to help operators meet safety and infrastructure requirements (Schmidt et al., 2025).



Taken together, these studies point to several policy and extension priorities: expanding reliable rural broadband, improving access to affordable liability insurance and clear legal guidance, developing grant programs for agritourism businesses and visitor infrastructure, and providing practical training in marketing, business planning, financial management, food safety, and regulatory compliance. Multiple states in the southern region have been working to address some of these challenges to reduce the risks associated with agritourism such as regulations to address liability and education programs to address financial risks through workshops on financial management, food safety, and marketing. Cooperative Extension, agricultural agencies, and tourism organizations are well positioned to coordinate these forms of technical assistance.&nbsp;



References



Britwum, K. &amp; Thomas, C. (2025). “Developing Rural Economic Opportunities Through Agritourism.”&nbsp;Southern Ag Today&nbsp;5(12.5). https://southernagtoday.org/2025/03/21/developing-rural-economic-opportunities-through-agritourism/



Connolly, C., Cusack, C., Morzillo, A. T., &amp; Towe, C. (2024). Challenges facing agritourism: How are producers coping?&nbsp;Choices, 39(3), 1-9. https://doi.org/10.22004/ag.econ.344742



Global Agritourism Network. (2025). Agritourism definition and values. https://globalagritourismnetwork.org/definition-and-values/



Hollas, C. R., Wang, W., Chase, L., Conner, D., &amp; Kolodinsky, J. (2022). Challenges for the agritourism sector in the United States: Regional comparisons of access.&nbsp;Journal of Agriculture, Food Systems, and Community Development, 11(4), 61-76. https://doi.org/10.5304/jafscd.2022.114.003.



Schmidt, C., Entsminger, J.S., Cornelisse, S. and Schweichler, J. (2025) “Insights on Agritourism Among U.S. Producers: Evidence from the 2024 National Agritourism Producer Survey.” Data Brief 2025-1. Northeast Regional Center for Rural Development.



Whitehouse, C., LaBonte, K., Straw, A., Solorzano, G., Vega-Labiosa, A., &amp; Chase, L. (2026). “Agritourism across the United States: Findings from a national study of agritourism operators.” University of Vermont. https://www.uvm.edu/extension/national-agritourism-study.



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Recommended citation format: Thomas, Chrystol, and Rachel Carter. &#8220;<a href="https://southernagtoday.org/2026/10/12/agritourism-sounds-like-fun-challenges-and-strategies-for-success/">Agritourism Sounds Like Fun: Challenges and Strategies for Success.</a>&#8221; Southern Ag Today 6(44.5). October 30, 2026. <a href="https://southernagtoday.org/2026/10/12/agritourism-sounds-like-fun-challenges-and-strategies-for-success/">Permalink</a>

Agritourism Sounds Like Fun: Challenges and Strategies for Success

Authors: Natalie Stewart and Hank Nelson



Beginning in 2027, producers can purchase multiple area-wide crop insurance endorsements that cover a portion of the deductible on their underlying policy: Hurricane Insurance Protection – Wind Index (HIP-WI), the Supplemental Coverage Option (SCO), and the Enhanced Coverage Option (ECO). SCO and ECO follow the underlying Revenue Protection (RP) or Yield Protection (YP) policy, with liability based on the producer’s individual APH, but indemnities are triggered by county-level losses. SCO covers the band from 90% down to the underlying coverage level, and ECO covers 95% to 90%. HIP-WI is triggered by county-level hurricane and tropical storm winds and covers the band from 95% down to the underlying coverage level. Details of HIP-WI were covered in a recent Southern Ag Today article:&nbsp;<a href="https://southernagtoday.org/2026/10/01/hip-wi-basics-and-trends/">HIP-WI Basics and Trends</a>.



Before 2027, producers could pair HIP-WI with SCO, but HIP-WI coverage was cut back to the band between 95% and the top of SCO coverage. HIP-WI and ECO could not be combined at all. The complaint was that the policies cover different losses – HIP-WI covers an extreme weather event, while SCO and ECO cover yield and/or price losses (depending on the underlying policy). When HIP-WI triggers, it pays the full HIP-WI coverage band regardless of individual losses, whereas SCO and ECO pay only to the extent&nbsp;county&nbsp;yield or revenue falls below the trigger. However, HIP-WI triggers less often and does not cover other types of losses. The choice was not entirely either/or, though – a storm strong enough to trigger HIP-WI could reduce county yields, so SCO and ECO may still pay in a hurricane year, but not necessarily as much as HIP-WI. In summary, coastal producers were essentially choosing between a potentially larger but less likely payment in HIP-WI, and a more likely one in SCO/ECO.



RMA data from 2020 to 2025 show that for counties in which both HIP-WI and SCO were available, SCO paid out more often than HIP-WI. Across corn, soybeans, cotton, and wheat, SCO triggered on 34% to 46% of policies, compared to 4% to 14% for HIP-WI – roughly three to eight times as often. These results indicate only that an indemnity was received, not the amount paid out for each endorsement (USDA RMA 2026a, 2026b, 2026c). Although SCO has historically paid more often, in practice producers have tended to give up SCO in favor of HIP-WI, prioritizing hurricane protection over coverage for more common county-level losses.&nbsp;



For 2027, producers can purchase HIP-WI with SCO and/or ECO, allowing HIP-WI to cover the same portion of the deductible as SCO and ECO. Producers will pay separate premiums for each policy, but if HIP-WI triggers, they are not eligible for SCO or ECO indemnities – the current industry expectation is that producers cannot receive payments from two policies covering the same portion of the deductible. This is illustrated in Figure 1.



Combining area-wide endorsements gives producers in counties where HIP-WI and SCO are available protection from multiple types of losses. Limiting payment to one policy for each portion of the deductible eliminates the concern that combining policies would allow producers to be paid twice for the same coverage. Producers should weigh the cost of paying both premiums against the value of having both types of protection. Once RMA releases full details, producers should review the rules with their crop insurance agent before making coverage decisions for 2027.&nbsp;



Figure 1. Combining Area-Wide Endorsements for 2027



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1962" height="1537" src="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.4-1.png" alt="" class="wp-image-45030" srcset="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.4-1.png 1962w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.4-1-1024x802.png 1024w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.4-1-768x602.png 768w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.4-1-1536x1203.png 1536w" sizes="auto, (max-width: 1962px) 100vw, 1962px" /><figcaption class="wp-element-caption">Source: Authors’ illustration of area-wide endorsement changes for 2027.</figcaption></figure>



References



U.S. Department of Agriculture, Risk Management Agency (RMA). 2026a. “Hurricane Insurance Protection–Wind Index Rates and Triggering Events Reports, 2020–2025.” Washington, DC. Accessed October 27, 2026.



———. 2026b. “Supplemental Coverage Option County Yields and Revenues, 2020–2025.” Washington, DC. Accessed October 27, 2026.



———. 2026c. “Cause of Loss Historical Data Files, 2020–2025.” Washington, DC. Accessed October 27, 2026.



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Stewart, Natalie, and Henry Hank Nelson. &#8220;<a href="https://southernagtoday.org/2026/10/12/combining-sco-eco-and-hip-wi-for-2027/">Combining SCO, ECO, and HIP-WI for 2027.</a>&#8221; Southern Ag Today 6(44.4). October 29, 2026. <a href="https://southernagtoday.org/2026/10/12/combining-sco-eco-and-hip-wi-for-2027/">permalink</a>

Combining SCO and ECO with HIP-WI for 2027

Authors: Alvaro Durand-Morat, Associate Professor, and Ryan Loy, Assistant Professor and Extension Economist, University of Arkansas



Domestic Market



USDA&#8217;s October 2026 WASDE further confirmed that the 2026 U.S. rice crop will be one of the smallest in decades. All-rice production is projected at 157.7 million cwt, down 24 percent from last year. Total rice harvested acres fell to roughly 2 million, down 25 percent from 2.74 million in the 2025/26 marketing year (Figure 1). Arkansas saw the largest decline, falling from 1.25 million acres to 886,000 (down 29% YoY). Yields partially offset the acreage loss, though, as the national average is currently forecast at 7,668 pounds per acre, up from 7,544 a year ago but down ~22 pounds from last month due to late-season conditions in the Mississippi Delta region.



Figure 1. United States Rice Production and Acres Harvested (2019 &#8211; 2026)



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1086" src="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-1.png" alt="" class="wp-image-45021" srcset="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-1.png 2048w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-1-1024x543.png 1024w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-1-768x407.png 768w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-1-1536x815.png 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Source: USDA-NASS</figcaption></figure>



With lower overall supply and use, 2026/27 ending stocks are projected at 40.0 million cwt. The stocks-to-use ratio has tightened, which could provide some upside potential for prices. The all-rice season-average price is projected at $15.20/cwt, up from $12.40 last year. USDA raised its long-grain rice forecast $0.50 this month to $14.00/cwt, on stronger cash and futures values since harvest began.&nbsp;



At the same time, USDA NASS estimates the long-grain price received at just $10.70 per cwt in August 2026. The October WASDE forecast assumes prices will firm up for the rest of the marketing year as the smaller crop comes online. For Mid-South producers, a historically smaller crop, driven by fewer acres, is moving through a tighter balance sheet and pulling long-grain prices up off the multi-year lows seen earlier this year.&nbsp;



International Rice Update



Several factors are providing upside price support globally, among which the ongoing Super El Niño event and the conflict in the Middle East, particularly the situation in the Strait of Hormuz, are arguably the most relevant.



The ongoing Super El Niño event is providing market support because of its potential impact on rice production. For example, in India, the largest rice producer and exporter globally, the southwest monsoon season ended on September 30 with a 12.6% rainfall deficit for June-September, making it the weakest monsoon since 2015 and threatening the productivity and quality of the main Kharif crop (Government of India, 2026). As of October, the USDA projects 2026 rice production to be 4.6% lower than in 2025 (but still 4% higher than the 2021-25 average). The drier-than-usual Summer and Fall in Southeast Asia is also a concern, threatening Vietnam’s Winter-Spring rice crop (which accounts for roughly 45% of the annual production) and Thailand’s secondary crop (which accounts for roughly 20% of the annual production), and creating concerns about the yield and quality of Thailand’s main crop currently under development. The USDA projects a 1.9% and 0.4% decrease in rice production in Thailand and Vietnam, respectively, in 2026. Finally, El Niño is affecting planting progress in Mercosur due to wetter-than-normal conditions. For example, CONAB (Brazil’s National Supply Company) estimates 2026 production would be 3% lower than in 2025, while Argentina and Uruguay face potentially larger losses.&nbsp;&nbsp;



While the situation in the Strait of Hormuz affects the entire economy mainly through crude oil prices, it affects rice trade with Iraq, Kuwait, the UAE, and Qatar, which together account for around 6% of total rice imports in 2023-25. Iraq is particularly important for US long-grain rice—the third-largest export market overall and the second largest for milled rice after Haiti in the last three marketing years.



Based on the discussion above, we can infer that international market prices should remain firm in the current marketing year. The FAO indica index, which tracks export prices for long-grain rice from top exporters, grew 15% from March to September, driven by increases in the export price of high-quality long grain from India (10%), Thailand (23%), Vietnam (19%), Uruguay (17%), and the U.S. (12%) (Figure 2). Projections from the Arkansas Global Rice Economics Project (AGREP) point in the same direction, with a projected export (FOB) price for Thai long-grain rice of $453/metric ton (mt) in marketing year 2026, up from $395/mt in 2025. We project the U.S. long-grain export price (US #2/4, FOB Houston) to average $675/mt relative to $569/mt in 2025, and farm prices to reach $14.05/hundredweight in 2026.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2145" height="990" src="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-2.png" alt="" class="wp-image-45023" srcset="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-2.png 2145w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-2-1024x473.png 1024w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-2-768x354.png 768w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-2-1536x709.png 1536w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.3-2-2048x945.png 2048w" sizes="auto, (max-width: 2145px) 100vw, 2145px" /></figure>



The increase in long-grain rice prices in the domestic market is constrained by the ongoing growth in rice imports (mainly aromatic rice). According to the latest WASDE report, rice imports this year are projected to reach 43 million hundredweight (1.95 million mt), amounting to 36.7% of the domestic long-grain market. Imports have grown 134% since 2010, and the trend is not slowing, with projections that the U.S. will become a net importer of long-grain rice (including aromatic rice) by 2035.



In conclusion, current global market conditions support firm prices in the 2026 marketing year, with a high probability of spillover into 2027 if the El Niño event lingers a bit longer. There is always the potential for policy or other interventions to change the price conditions (e.g., will India react to a lower production by banning exports as they did in 2023, leading to further upward support?).



References



AGREP – Arkansas Global Rice Economics Project. Preliminary results from FAPRI’s August 2026 meltdown (unpublished).&nbsp;



CONAB &#8211; Companhia Nacional de Abastecimento, Brazil. Boletim da Safra de Grãos.&nbsp;1º Levantamento &#8211; Safra 2026/27.



FAO. FAO Rice Price Update. October 2026. Retrieved from https://www.fao.org/markets-and-trade/commodities/rice/fao-rice-price-update/en/



Government of India. India Meteorological Department. 2026. Salient Features of the 2026 Southwest Monsoon Season. Retrieved from&nbsp;<a href="https://mausam.imd.gov.in/Forecast/marquee_data/Salient_Features_SW_MONSOON%20_2026_30_sep.pdf">https://mausam.imd.gov.in/Forecast/marquee_data/Salient_Features_SW_MONSOON%20_2026_30_sep.pdf</a>&nbsp;&nbsp;



USDA – World Agricultural Supply and Demand Estimates. 2026. “October 2026 WASDE Report.” Retrieved from&nbsp;<a href="https://www.usda.gov/oce/commodity/wasde/wasde1026.pdf">https://www.usda.gov/oce/commodity/wasde/wasde1026.pdf</a>USDA – National Agricultural Statistics Service. 2026. “Agricultural Prices.” Retrieved from&nbsp;<a href="https://esmis.nal.usda.gov/sites/default/release-files/796084/agpr0926.pdf">https://esmis.nal.usda.gov/sites/default/release-files/796084/agpr0926.pdf</a>

2026 Rice Market Update

USDA announced last week that AMS will start publishing a new negotiated cash cattle report on October 26 that combines Texas, Oklahoma, New Mexico, Kansas, and Colorado. The report uses data packers already submit under Livestock Mandatory Reporting. This doesn’t change how cattle are bought and sold, but it does change how much of the Southern Plains fed cattle cash trade gets publicly reported, and lately that has not been much.



AMS can’t publish a report if it doesn’t meet the 3/70/20 confidentiality rule, which states a mandatory price report is only published if at least three companies regularly contribute data, no one company accounts for more than 70 percent of the volume, and no one company is the only reporter more than 20 percent of the time. Colorado has been in that situation for years, and this year it became a problem for other states. The Texas/Oklahoma/New Mexico weekly negotiated price has been withheld every week since early July, and Kansas has been withheld every week since late August. Kansas had not missed a week since at least 2019. Texas/Oklahoma/New Mexico’s last gap was seven weeks last winter, from early December through mid-January.



Table 1.&nbsp;Weeks the weekly negotiated cash report was withheld, by region and report year



<figure class="wp-block-table has-small-font-size"><table><thead><tr><td>Withheld weeks</td><td>2021</td><td>2022</td><td>2023</td><td>2024</td><td>2025</td><td>2026</td></tr></thead><tbody><tr><td>TX-OK-NM</td><td>0</td><td>0</td><td>0</td><td>0</td><td>4</td><td>19</td></tr><tr><td>Kansas</td><td>0</td><td>0</td><td>0</td><td>0</td><td>0</td><td>9</td></tr><tr><td>Nebraska</td><td>0</td><td>0</td><td>0</td><td>0</td><td>0</td><td>0</td></tr><tr><td>Iowa-Minnesota</td><td>0</td><td>0</td><td>0</td><td>0</td><td>0</td><td>0</td></tr><tr><td>Colorado</td><td>27</td><td>36</td><td>52</td><td>53</td><td>52</td><td>42</td></tr></tbody></table><figcaption class="wp-element-caption">2026 through the October 19th report. Source: USDA AMS Livestock Mandatory Reporting.</figcaption></figure>



The part that may surprise some is what this does to the 5-Area fed cattle average price that is widely used. The 5-Area average fed cattle price is not calculated from all five regions, regardless of what gets published. It is calculated from the regions that pass the confidentiality test. Since the August 24th report, the 5-Area head count has been only Nebraska plus Iowa/Minnesota. For two months now, Southern Plains cattle have had no direct weight on the benchmark 5-Area cattle price that anchors many formula trades and settles LRP fed cattle coverage.



In 2026, while the Texas/Oklahoma/New Mexico price was still being published, it averaged 9 cents per cwt above Nebraska and 23 cents above Iowa-Minnesota. But individual weeks ran $3 to $4 apart in either direction. In 5 of 19 weeks the gap was more than $2. Most weeks the gap was small, but some weeks it was not.



There are a few things to watch once the new report starts. The first is if the new five-state average price (Texas, New Mexico, Oklahoma, Kansas, and Colorado) will regularly clear confidentiality every week. Second, will this change allow for trades in these states to be added into the 5-Area price. And third, will AMS be able to backfill and publish some history for the new price series, allowing some comparison of the new series with the 5 market average price.&nbsp;



Figure 1. Average weekly 5-Area negotiated cash head count by month: Nebraska and Iowa-Minnesota vs. Kansas and Texas-Oklahoma-New Mexico, January 2025 through October 19, 2026



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2560" height="1601" src="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-1-scaled.png" alt="" class="wp-image-45013" srcset="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-1-scaled.png 2560w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-1-1024x640.png 1024w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-1-768x480.png 768w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-1-1536x961.png 1536w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-1-2048x1281.png 2048w" sizes="auto, (max-width: 2560px) 100vw, 2560px" /></figure>



Figure 2. Weekly difference between the Texas-Oklahoma-New Mexico and Nebraska Over 80% Choice live steer prices, 2026



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2560" height="1600" src="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-2-scaled.png" alt="" class="wp-image-45014" srcset="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-2-scaled.png 2560w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-2-1024x640.png 1024w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-2-768x480.png 768w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-2-1536x960.png 1536w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.2-2-2048x1280.png 2048w" sizes="auto, (max-width: 2560px) 100vw, 2560px" /></figure>



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Recommended citation format: Maples, Josh. &#8220;<a href="https://southernagtoday.org/2026/10/12/southern-timber-market-update/">A New Cash Cattle Report for the Southern Plains.</a>&#8221; Southern Ag Today 6(44.2). October 27, 2026. <a href="https://southernagtoday.org/2026/10/12/southern-timber-market-update/">Permalink</a>

A New Cash Cattle Report for the Southern Plains

Stumpage price trends



Across the southern region, stumpage&nbsp;prices for pine and hardwood sawtimber edged up in the third quarter (Q3) of 2026, while pulpwood prices continued to decline (Figure 1). Pine sawtimber averaged just under $24/ton, up 2% quarter-over-quarter but down 5% year-over-year and 14% below its early 2022 peak (TimberMart-South, 2026). Hardwood sawtimber averaged slightly above $31/ton, down 5% year-over-year. The average pine chip-n-saw price declined to $16.50/ton, down 8% year-over-year and 21% below its recent peak in 2022.&nbsp;



Pine pulpwood prices continued to decline for the 7th&nbsp;consecutive quarter, dating back to Q1 2025. The average price was just over $5/ton, down 4% quarter-over-quarter and 16% year-over-year. It was less than half of its recent high in 2022. Hardwood pulpwood remained relatively stable until early 2026, then fell more than 24%, averaging slightly above $6/ton in Q3 2026 and narrowing the price gap between hardwood and pine pulpwood.



Figure 1. South-wide pulpwood stumpage prices, Q3 2016 –Q3 2026.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1402" height="540" src="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-1.jpg" alt="" class="wp-image-45007" srcset="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-1.jpg 1402w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-1-1024x394.jpg 1024w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-1-768x296.jpg 768w" sizes="auto, (max-width: 1402px) 100vw, 1402px" /></figure>



Source: TimberMart-South, 2026.



Stumpage prices varied widely across states and subregions. In Q3 2026, pine sawtimber prices ranged from $16-19/ton in eastern Tennessee and Virginia to more than $30/ton in Florida and western North Carolina (Figure 2). Year over year, prices fell most sharply in eastern Tennessee (-23%), northern Arkansas (-18%), northern Mississippi (-15%), North Carolina (-11%), and Virginia (-10%). In contrast, prices increased in northern Georgia (+13%), southeast Texas (+13%), northeastern Florida (+8%), and southern Louisiana (+7%).



Figure 2. Average pine sawtimber and pulpwood stumpage prices by state and subregion, Q3 2026



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2319" height="1265" src="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-2.png" alt="" class="wp-image-45008" srcset="https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-2.png 2319w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-2-1024x559.png 1024w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-2-768x419.png 768w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-2-1536x838.png 1536w, https://southernagtoday.org/wp-content/uploads/2026/10/6.44.1-2-2048x1117.png 2048w" sizes="auto, (max-width: 2319px) 100vw, 2319px" /></figure>



Data source: TimberMart-South (2026)



In Q3 2026, pine pulpwood prices ranged from $2-3/ton in southern Arkansas and Tennessee to $9-11/ton in north-central Florida and eastern North Carolina (Figure 2). Compared with a year earlier, prices fell sharply in South Carolina (-37%), northern Louisiana (-37%), southern Georgia (-36%), southern Arkansas (-32%), and northern Alabama (-28%). Most other regions experienced declines of approximately 10-25%.&nbsp;



Factors behind price trends



Weak pine sawtimber prices reflect a stagnant housing market and an oversupply of sawtimber in some wood baskets. In September 2026, single-family housing starts, a key demand driver for pine sawtimber and structural panels, were at a seasonally adjusted annual rate of 859,000 units, below the long-term benchmark of 1.1 million units associated with a healthy economy (U.S. Census Bureau, 2026). Housing construction continues to face affordability challenges, high construction and financing costs, labor shortages, and zoning restrictions. The 21st&nbsp;Century ROAD to Housing Act, enacted on July 11, 2026, includes provisions intended to reduce regulatory barriers to housing construction and expand housing supply. However, it remains uncertain how much these policies translate into stronger homebuilding activity, greater lumber demand, and ultimately higher timber demand.&nbsp;



Landowners who have deferred harvesting for several years may need to reassess their expectations and recognize that prices may not return to the levels above $40/ton seen before the 2008-2009 financial crisis. Further delays may allow trees to grow beyond the preferred size specifications of some sawmills, potentially resulting in lower stumpage prices.&nbsp;



The continued decline in pine and hardwood pulpwood prices reflects structural changes in the pulp and paper industry, including shifts in product demand, increased use of recycled fiber, mill modernization, rising wood pulp imports, and relocation to lower-cost regions. These trends have intensified in the past three years, reducing regional pulpwood demand and putting downward pressure on pulpwood stumpage prices. Between 2023 and 2025, more than 10 major pulp facilities in the South closed, eliminating over 25 million tons of annual fiber demand and significantly reshaping regional pulpwood markets (Winn et al., 2026; Forisk, 2026).&nbsp;



Landowners in areas affected by recent mill closures may need to reassess their long-term management strategies in response to reduced pulpwood demand. Potential adjustments may include reducing planting density for reforestation or delaying thinning.&nbsp;



Major takeaways



Southern sawtimber prices remained relatively flat or lower in many wood baskets of the region, while pulpwood prices continued to fall across much of the South. Persistent weakness in housing demand and structural changes in the pulp and paper industry continue to challenge timber markets. Landowners may consider reassessing harvest timing and forest management strategies in light of local stumpage price trends, mill demand, stand conditions, and long-term management objectives.&nbsp;



References



Forisk. 2026. Forisk North American forest industry capacity database. Athens, GA.&nbsp;



TimberMart-South. 2026.&nbsp;Market news quarterly. Athens, GA.



U.S. Census Bureau. 2026. Monthly new residential construction.&nbsp;<a href="https://www.census.gov/construction/nrc/index.html">https://www.census.gov/construction/nrc/index.html</a>



Winn, M., J. Gray, and J. Cooper. 2026. Southern pulpwood production, 2024. Asheville, NC.<a href="https://doi.org/10.2737/SRS-RB-250">https://doi.org/10.2737/SRS-RB-250</a>



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Li, Yanshu. &#8220;<a href="https://southernagtoday.org/2026/10/12/southern-timber-market-update/">Southern Timber Market Update</a>.&#8221; Southern Ag Today 6(44.1). October 26, 2026. <a href="https://southernagtoday.org/2026/10/12/southern-timber-market-update/">Permalink</a>

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