OMAHA (DTN) -- 2025 was always going to be a tough year for crop farmers and that's largely how it played out.
Crop farmers came into the year facing financial losses from the 2024 crop, while also waiting for details on $10 billion that eventually became the Emergency Commodity Assistance Program (ECAP), along with another $21.5 billion in aid for natural disaster losses in 2023 and 2024.
One small moment that stood out was in early February when 11 farmers testified before the U.S. Senate Agriculture Committee. Jennifer James, a rice farmer from Arkansas, was the last to speak, but her comments captured the real-life struggles many farmers were facing. Rice farmers were staring at four consecutive years of negative margins projected at $345 an acre, James said. In hindsight, the net returns for rice farmers actually came in worse than that.
"Nothing in my area pencils out," James told senators. "This is not economically sustainable."
Her voice trembled as James described the conversations her family was having at home.
"Just last week we had one of the most difficult business conversations my family has had. Is farming really worth it? What scares me is we are only one farm family of thousands having these conversations."
That was just one perspective from crop producers who grappled with financial strains.
Corn prices coming into 2025 were down 40% from two years earlier, but input prices such as fertilizer prices and interest rates on operating loans remained stubbornly high.
An analysis by economists at the University of Illinois shows the average corn farmer had a net return of minus $153 an acre this year. For wheat farmers it was minus $130 and for soybeans it was minus $83. Cotton farmers had net returns of minus $383 per acre, while rice net returns were minus $446 an acre. Sorghum farmers also had a net return of minus $160 an acre.
And yet, all eight fertilizers DTN tracks on a weekly basis are anywhere from 10% to 28% higher in price than they were a year ago.
In an interview with DTN last week, James said she was going over crop budgets for 2026.
"Everything is still negative, even much more negative than it was last year at this time. So, I question our sanity sometimes," she said.
LESS CAPITAL SPENDING
The losses translated into fewer farmers buying equipment as well. Despite the promise of new tax breaks for equipment expenses, capital spending by farmers across multiple Federal Reserve districts "declined at the fastest pace since early 2020," according to a recent Kansas City Fed report.
Manufacturers saw that decline in capital spending, and worker layoffs continued. Deere & Co.'s last quarterly report in November showed revenue was down $3.5 billion or 17% during the past year in Deere's Production & Precision Ag division. CNH Industrial reported weeks earlier that the company reduced production of Case IH and New Holland tractors as CNH lowered its outlook for the year.
"Market fundamentals remain uncertain and challenging for our farmers, and it is difficult to say if we will enter 2026 with more visibility or even more momentum," said CNH CEO Gerrit Marx on a November analysts' call, Reuters reported.
FARM FINANCE
While fewer farmers were in the market for equipment, farmers still increased their loan needs in 2025.
Agricultural banks reported during the past year that farm loan balances are up 5% at more than half of all agricultural banks while about one-quarter of those banks saw farm loan balances increase 10%. Debt is rising at agricultural banks for both real estate and non-real estate loans, according to a Kansas City Fed report.
One in five banks in the Chicago Fed region also has raised their collateral requirements for farm loans over the past year while none eased their collateral requirements.
Delinquency rates for farm loans remain low, about 1.3% overall, but the delinquency rates continue to tick upward slightly as well.
LABOR-IMMIGRATION INTERWINED
Agricultural labor has been a long-standing crisis that became more political and controversial as the Trump administration launched its mass deportation plans.
The spring and summer were filled with videos of farm raids, especially in California where the Trump administration heightened immigration enforcement efforts.
Lisa Tate, an orchard farmer in southern California, said on a call earlier this month with the group Grow It Here that her county just north of Los Angeles dealt with farm raids. The deportation push and aggressive tactics have left a lasting impression on farm workers and others in the community who are in the U.S. legally.
"It was very scary at first and there was a lot of outrage and a lot of protests out this way," Tate said. "The farming community was pretty concerned about it and we still are. But I'm also seeing it just -- within the community in general, just a change in the way we are doing things."
Area residents who would normally participate in a local nonprofits' Christmas events were leery about law enforcement and whether attending those events would be safe, Tate said.
"There have been some lasting -- I don't know -- cultural changes that started here and that's really sad, because we should really be valuing the people who are harvesting our crops and taking care of our food and getting it to us. They shouldn't be scared in their own communities."
Questions about farm raids often reached the White House. Trump repeatedly told his Cabinet and others that immigration officials needed to ensure farmers were not losing workers. Trump reiterated that message, though there was never any formal actions to back away from employer raids.
"I don't want to take people away from the farmers," Trump told a crowd in Iowa on July 3. The president added farm labor is hard work. "They bend over all day. We don't have too many people who can do that. They work very hard."
Zach Rutledge, an assistant professor at Michigan State University, said farm labor faces a growing problem of aging workers with as high as 40% of the workforce also are in the country illegally. Younger workers, both legal and undocumented, also are looking for better opportunities in other sectors. Farmers are experiencing a growing labor shortage that puts more pressure on wages and will also lead to higher food prices.
"We have an aging workforce that's not being replenished by younger immigrants the way it once was back in the '90s and the '80s," Rutledge said.
Contrary to popular belief, farmers didn't exactly lose large numbers of workers this year despite the immigration raids on farms in some states. There was a dramatic swing in the number of farm workers, which hit 2.37 million in March of 2025, but rapidly fell by 209,000 workers by May -- the sharpest decline in three years. Still, farm employment in November 2025 was 2.189 million, about 13,000 fewer jobs in agriculture than in November 2024, according to the Bureau of Labor Statistics and Federal Reserve Economic Data (FRED).
H-2A REGS AND PAY CUT
Farmers also got some needed reprieves when it comes to the temporary H-2A guestworker program. The Department of Labor (DOL) first ended enforcement of the Biden administration's 2024 "Farmworker Protection Rule" that had been blocked by court injunctions across at least 17 states.
After years of complaints about H-2A wages, USDA announced it would end its Agricultural Labor Survey that had collected wage data from 18,000 farmers nationally. Farmers who use H-2A workers blamed the survey for DOL's annual Adverse Effect Wage Rate changes that had increased how much producers are required to pay H-2A workers in each state.
In early October, DOL then changed how hourly wages are set for temporary foreign workers. The changes in the rule are projected to save H-2A employers $2.46 billion per year. United Farm Workers (UFW) sued the Trump administration in November over the wage changes, which the group argued would undercut wages for American farm workers and "risks dramatically expanding the exploitive H-2A" program.
Farmers are still waiting for Congress to reform the H-2A law to allow year-round workers. One of the biggest Republican advocates in Congress for reforming the program, Rep. Dan Newhouse, R-Wash., also announced he'll retire at the end of 2026 rather than seek re-election.
TARIFF BATTLES
High expenses and farm labor were just a few of the challenges farmers faced financially. There were also the non-stop tariff battles -- but that's a whole other story.
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