The days are getting shorter and many are wrapping up harvest and preparing for the unpredictable elements of old man winter in the home stretch of 2025. Top of mind for many who are in the planning stages is what lies ahead for 2026. Will the economic uncertainty persist? How does one prepare the business, and more importantly, prepare oneself to navigate the twists and turns as we embark on the second quarter of the 21st Century?

The New Normal

The questions above deserve honest answers, even if those answers are complex. When we consider the phrase “the new normal,” some keywords to define it would be geopolitical and regional military tensions, deglobalization, tariffs, sanctions, trade disruptions, and accelerated consumer and societal changes.

Expect tariffs and trade sanctions not to abate, but possibly accelerate. The agricultural industry will be at the center of pivotal negotiations. This is critical for an industry where one in five dollars of net income is generated by exports. Inflated costs in farm inputs, specifically fertilizer and chemicals, along with spot shortages of equipment and technology components, can be expected. Overall, markets will be in disarray as rumors, tweets, and regional and border conflicts continue to impact profits and cash flows.

The Grain and Row Crop Challenge

Those in grain and row crops and, to some extent, specialty crops, are being impacted long term by more than tariffs and the value of the dollar. Since 2013, China has strategically invested over $1.3 trillion in agricultural centers, particularly in the Global South. The strategic collaboration of the BRICS nations (Brazil, Russia, India, China, and South Africa) with over 40 other countries in diversification of food, fiber, and fuel sources is in full force during the down cycle of commodities that grow in the United States.

The combination of lower prices with inflated input and capital investment costs is resulting in what industry veterans call the “two in ten year rule.” Simply put, over a decade one involved in grain, row crop, and specialty crops can expect two very profitable years and eight years when breakeven will be the aspiration, often supplemented by government payments. The wild card is weather in production belts in both the Northern and Southern Hemisphere and trade relations with Mexico, Canada, and China.

Animal Agriculture Outlook

The animal agriculture sector in 2026 is more positive, with guarded optimism. This sector offers more stability in part because of diversified demand streams and growing consumer interest in protein-rich diets. Producer business models that have diversified revenue sources with three to six streams, including both farm and nonfarm businesses, are more likely to generate a positive bottom line.

Expect the dairy industry to continue to consolidate, with profits hinged on exports specifically to Mexico and possibly China. A positive for the industry is the increased consumption of dairy products as consumers aspire to include more protein in their diets. The dairy and beef industry should remain positive despite recent administrative actions which have taken some of the profits off the table. Expect poultry and pork production to be substituted for beef, particularly if households and individuals face financial stresses and lower incomes.

Interest Rates

A common question asked by individuals in attendance on the speaking circuit concerns interest rate direction. The current administration’s new appointees to the Federal Reserve and the chairperson would suggest accommodative policy with accelerated cuts in 2026. The unemployment reports, along with core and headline inflation, will need to be closely monitored by the Fed to determine appropriate actions on interest rates.

The 800-pound gorilla for 2026 will be the lack of discipline in fiscal spending. Government deficits and debt buildup, along with their impact on the financing of treasuries and bonds, pose significant risk. This risk, in turn, could impact the long end of the yield curve and the cost of money for government, businesses, and households.

U.S. Economy

Interest rate policy does not operate in a vacuum. It influences and is influenced by broader economic conditions. The United States economy is currently in a paradox. Wage earners are struggling with inflation, job uncertainty, and confidence in spending and investments while the stock market is at record highs. However, elevated gold and silver prices suggest uncertainty.

In 2026, watch corporate businesses that cut costs and reduce hiring of white-collar workers such as recent college graduates. In the short run, this increases earnings and stock prices with company buybacks. The question becomes: will it be sustainable in the long run? The probability of a recession increases dramatically with a 20% to 30% long-term correction in the stock market and housing markets. This in turn could impact consumer spending habits on agricultural products, particularly value-added, livestock, and protein.

Preparation for 2026

As you prepare for 2026 and beyond, consider five steps:

1. Develop your goals in writing. Consider business, family, and personal goals as well as physical, mental, and spiritual goals for a balanced life. Goal setting will be imperative in focusing energy on managing the controllables and managing around the un-controllables, both in business and life.
2. Develop a projected cash flow on either a monthly or quarterly basis. Have an operational plan including production, marketing, finance, and human resources along with the timing of income, costs, and assumptions that back up your plan.
3. Develop a financial sensitivity analysis. In the uncertain world that was outlined previously, create guardrails so that objective versus subjective or emotional decision making can occur. Test various assumptions on production, price, cost, and interest rates.
4. Formulate an advisory team. This is critical for young, beginning producers where legacy equity or capital is limited. The team could include your lender, crop or livestock specialist, a peer, and a trusted community member.
5. Take care of yourself and others. Care for your spouse or partner, family members, and community. Yes, success can be measured in dollar signs, but significance in life is giving time and positive energy to others. Never equate your net worth to your self-worth, a lesson learned from the downturns of the 1980s and, of course, the Great Depression.

The year ahead will test resilience and adaptability. Markets will fluctuate, policies will shift, and uncertainty will persist. Those who plan deliberately, build strong advisory teams, and maintain perspective on what truly matters will be better positioned not just to weather the challenges of 2026, but to identify and seize opportunities within them. In agriculture, as in life, preparation and perspective make all the difference