Why the Current Economic Downturn is So Troublesome

The current outlook for the major row crops in the U.S. is pretty dismal.  The Agricultural and Food Policy Center (AFPC) at Texas A&M University has been working with farmers across the country since 1983 to develop representative farms in major production regions.  Currently, AFPC maintains the data to analyze 92 crop (64) and livestock (28) operations in 30 states (Figure 1). From the beginning, the representative farms have been utilized to conduct “what if” policy analyses for the House and Senate agricultural committees to help craft agricultural legislation.  Another use of the farms is to provide policymakers with an early warning system or agricultural barometer under current policy conditions.  AFPC has partnered with and uses price projections from the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri to project the financial wellbeing of the representative farms.

In the 42 years that AFPC has been projecting farm financial performance, the most recent crop outlook for the representative farms is the worst in terms of the number of farms in each of the four commodity types (feed grains, cotton, rice and wheat) that are not currently expected to have a positive cash flow over the next 5 years.  What makes this so troublesome is there is not a crop that producers can switch to from their current crops that would generate a positive return.  In other downturns, we would see producers that can grow several types of crops taking market signals and moving to more profitable crops.  Part of developing representative farms is collecting all of the cost information for the farms.  This makes it possible to develop cost of production data for each of the crops being produced on the 64 representative crop farms.  The bottom line is very few of the representative farms appear to have profitable crops on them at prices that are projected by FAPRI for the 2025/26 marketing year – which is very troublesome.  While the economic and natural disaster assistance provided in the recent American Relief Act of 2025 will help in the near term, the need for a significant enhancement to the farm safety net over the next 5 years is imperative… and the sooner the better.

Figure 1.  AFPC Representative Crop and Livestock Farms.


Outlaw, Joe L., and Bart L. Fischer. “Why the Current Economic Downturn is So Troublesome.Southern Ag Today 5(5.4). January 30, 2025. Permalink