A new report shows Iowa’s agricultural economy is facing a prolonged downturn, which is expected to continue through 2027.
Researchers say the conditions are not as dire as what led to the 1980s farm crisis. But the “mounting pressure” affects farmers, rural communities and other sectors of the economy, like manufacturing.
“When agriculture sneezes, the Iowa economy catches a cold,” said Christopher Pudenz, an economist with the Iowa Farm Bureau Federation during the organization’s economic summit Friday.
Pudenz moderated a session about the 2026 Iowa Agricultural Outlook: The Pressure is Rising report, which was jointly published by the Iowa Farm Bureau, Iowa State University (ISU) and the Iowa Bankers Association.
“The basis for this is that Iowa net farm income fell 53% from 2022 to 2024, and it's the third year in a row during which crop costs outpaced crop revenues,” Pudenz said. “The questions that we asked with this report are: How did we get here, and what is the path forward?”
The 100-plus-page report points to record-high input costs, depressed grain markets, trade uncertainty and ongoing conflicts abroad as some of the challenges.
The share of financially vulnerable mid- and large-scale farms in Iowa more than doubled from 7.7% in 2022 to 19% at the end of 2025.
Credit demand is going up, and farm bankruptcies have more than doubled over the past two years. But it’s still below the minimum number of annual bankruptcies averaged from 2008 to 2021.
“I’ve been asked the question many times over the past few years, ‘Does this downturn look like the 1980s?’ And I point out to folks, ‘No, that’s not what I’m seeing,’” said ISU Economist Chad Hart.
Some of the big differences are profits from livestock, land values and government support.
The current state of crops and livestock
Production costs for corn and soybeans have increased 37% and 36%, respectively, since 2021. Simultaneously, record and near-record crop production over the last five years have led to surpluses, which have dragged prices down.
Soybean exports also fell below the five-year average due to the trade war with China. China is not traditionally a big importer of U.S. corn, which is expected to hit an export record for the 2025-26 marketing year.
“Iowa's livestock sectors have been this silver lining to an ag economy that otherwise has been struggling because of low row crop prices,” Pudenz said.
Specifically, beef prices have increased steadily since 2021.
Hart described the crop-livestock sectors of agriculture as a teeter-totter. Lower crop prices generally mean cheaper feed for cattle, hogs and poultry.
However, Hart said producers face high costs when buying new animals, especially heifers, amid a historically tight supply of cattle in the U.S. The turkey and egg sectors are also rebuilding after significant losses in recent years from bird flu.
Hart said many farmers are cash-poor but asset-rich. The latest Iowa Farmland Ownership and Tenure Survey found 84% of farmland in the state is owned debt-free.
Farmland prices hold steady
While land values in Iowa have decreased slightly since 2023, Hart credited the livestock sector’s counterbalancing effect and injections of government support in keeping “those land values firm.”
Direct government payments to producers last year exceeded $30 billion, roughly double the yearly average from 2022-24.
“Another thing that's been helping in the land market has been that we see relatively little land changing hands over time,” Hart said. “Limited number of sales keeps prices high.”
Farmland is often used as collateral for taking on more debt to help cover the bills, he said.
In the lead-up to the 1980s farm crisis, Hart said many Iowa farms had long-term debt and relied on the farmland to hold value. But average land values in Iowa dropped from $2,147 per acre in 1981 to roughly $787 per acre by 1986.
Hart doesn’t see that happening any time soon in Iowa. Rather, the conditions are “eerily similar to where we were back in the late 2010s.”
After a net farm income peak in the early 2010s, agricultural returns hit a low point in 2016. According to the report, recovery was slow until “the post-COVID-19 economic boom sent farm incomes back up into record territory, peaking in 2022 at $182 billion.”
“If you're in agriculture long enough, you experience these … incredible returns, but they're followed by typically lulls of struggles for a while,” Hart said. “I'm going to argue it will balance out. It just may take a little bit longer than we care to.”
