Key Takeaways
- Capstone expects weak crop prices, high input costs, and trade uncertainty to weigh on U.S. agriculture in 2026
- Row-crop farmers face continued income pressure, while cattle shortages support elevated beef prices
- SNAP eligibility changes introduce demand risks for grocers and food manufacturers
- Federal relief is likely but uneven, with trade-related bailouts expected to favor larger producers
Capstone Outlook for U.S. Agriculture in 2026
Capstone expects U.S. agriculture to face a challenging 2026 as farmers contend with weak commodity prices, elevated operating costs, and ongoing trade volatility. According to Capstone’s sector analysis, limited near-term policy relief and continued inflationary pressures are likely to result in tighter margins for producers and uneven demand across food and retail markets.
The outlook highlights diverging conditions across agricultural segments, with row-crop producers under sustained financial strain while livestock markets experience structurally constrained supply.
Capstone on Crop Economics, Trade, and Farm Income
Capstone notes that row-crop farmers are entering 2026 following a difficult period marked by multi-year low prices for soybeans, corn, and wheat, combined with higher costs for fertilizer, labor, equipment, and energy. Trade disruptions, particularly with China, contributed to declining export volumes in 2025, exacerbating income pressure despite relatively strong yields.
“Low prices, high costs, and trade volatility are creating an environment where many row-crop operations struggle to remain profitable,” Capstone analysis stated, citing survey data indicating that only about half of U.S. farm borrowers expected profitability.
While federal commodity support programs and crop insurance expansions are expected to improve longer-term risk management, Capstone observes that many policy measures will not take effect until late 2026, limiting their short-term impact.
Livestock Markets and Elevated Beef Prices
In contrast, Capstone expects beef prices to remain elevated through 2026 due to historically low U.S. cattle inventories. Prolonged drought conditions since 2021 reduced herd sizes, and rebuilding is expected to take several years. As a result, beef and dairy producers are projected to benefit from strong pricing, while meatpackers face margin pressure from labor shortages and regulatory scrutiny.
Capstone notes that higher labor costs and tighter immigration enforcement continue to challenge processing capacity, particularly in rural areas.
SNAP Policy Changes Create Retail Risk
Capstone also flags policy risks for food retailers and manufacturers tied to proposed changes to the Supplemental Nutrition Assistance Program (SNAP). Expanded work requirements, food restriction waivers, and potential reforms to eligibility criteria could reduce participation and spending.
“Structural changes to SNAP could materially affect grocery demand, particularly for packaged food and beverage companies with high exposure to program-funded purchases,” Capstone analysis indicated.
With SNAP accounting for roughly 12% of U.S. grocery spending, Capstone expects grocers and food producers to face demand uncertainty as policy debates continue into 2026.
