YEAREND: Ag industry seeks light at the end of the tunnel
“Growers are looking for every way to improve margins.” —Scott Stiles
By Mary Hightower
University of Arkansas System Division of Agriculture
Dec. 22, 2025
Fast facts
- “Unfortunately, some are exiting farming altogether; some voluntarily and some involuntarily.” — Scott Stiles
- Growers awaiting new Farm Bill; OBBBA provides improved reference prices
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LITTLE ROCK — Following one of agriculture’s darkest years, some farmers are looking for anything that might improve the bottom line, while others are looking for the exit.
Deacue Fields, an agricultural economist who is head of the University of Arkansas System Division of Agriculture, but it bluntly: “The agricultural economy right now is probably in one of the most depressing states that I've seen in my career.”
For most row crop farmers, a bigger harvest didn’t translate into bigger profits. It translated into bigger losses.
Net farm income in Arkansas was expected to decline 8 percent from 2024 levels to $2.91 billion in 2025, according to a report from the Rural and Farm Finance Policy Analysis Center, or RaFF, working with agricultural economists from the University of Arkansas System Division of Agriculture.
Economists projected a further decrease in crop receipts in 2026.
“The State of the Arkansas Crop Economy in 2025,” conducted by Extension Economists Hunter Biram, Ryan Loy and Economics Program Associate Scott Stiles, examined net returns on the state’s principal crops. They factored in expected yield, expected price, expected revenues, operating costs and rent.
They found that Arkansas farmers were expecting to suffer losses of $85.02 per acre for soybeans up to $352.75 per acre on cotton in 2025.
In addition to battling market turbulence, farmers had to cope with damage from storms in April that produced “generational” flooding. Division of Agriculture economists estimated the economic impact of the flooding at $99.4 million from damage in 32 counties.
2026 OUTLOOK
“Growers are looking for every way to improve margins,” Stiles said. “That will require a combination of capturing opportunities in the market — such as we've seen over the past month in soybeans.
“In recent visits with growers, most are and have been deferring equipment purchases,” he said. “Some are renegotiating farm leases. Some are walking away from leases that aren't working in the current environment.
“Unfortunately, some are exiting farming altogether; some voluntarily and some involuntarily,” Stiles said.
“Strong yields are not enough,” he said. “Marketing, cost management, and maximizing farm program benefits will all need equal time and attention going forward.”
Comparing the Division of Agriculture’s 2025 and 2026 budgets, input costs are similar, though some inputs have eased.
“Since the '26 budgets were released, we are seeing welcome reductions lately in fertilizer and fuel,” Stiles said. “Crude oil has traded down to the lowest point we've seen since early 2021, and phosphate prices have turned lower in recent weeks, finally coming off three-year highs.”
Loy said that “operating expenses are relatively unchanged, adding more fuel to the cost-squeeze fire.
“For soybeans to reach breakeven, the budget was reworked to remove a second pass for weed control, he said. “This was a way to trim the budget for soybean in this high-cost environment.
“Overall, there is very little relief expected in 2026; margins will still be tight, and row crop prices will remain low,” Loy said.
July’s One Big Beautiful Bill Act included changes to some key risk management tools, including a 10 to 21 percent increase in the reference price floors for Price Loss Coverage. The act also increased effective references price from 86 percent to 88 percent.
In December, the Trump administration rolled out a $12 billion Farmer Bridge Assistance package that was expected to bring much-needed funds to farmers in February.
Biram was projecting that the Farmer Bridge Assistance program “will provide $329.15 million to Arkansas farmers. Economic losses were $1.2 billion.
“This results in net farm income of minus $873.85 million before any payments paid from the One Big Beautiful Bill Act, which I do not expect to make up all the difference,” he said.
House Ag Committee Chairman Glenn Thompson has already made a call for an additional $10 billion on top of the $12 billion FBA package released.
“With the possibility for another government shutdown in January, any ad hoc funding from Congress on top of the $12 billion released is likely to face political headwinds,” Biram said.
For a detailed look back, see the 2025 Markets in Review produced by the Fryar Price Risk Management Center of Excellence.
FORESTRY
2025 saw slippage in timber prices, but the University of Arkansas at Monticello researchers are looking at new markets for small-diameter pines, as well as new forest management approaches to optimize forest health.
CATTLE
Cattle herds in the United States continued their decline, with cattle inventories hitting their lowest levels since the 1950s. Retail beef prices averaged $8.56 per pound through August 2025 — up 60 cents per pound from the same period last year. Input costs and other factors are likely to slow any herd rebuilding.
The beef industry also faces other challenges. An old enemy, the New World Screwworm, reappeared in Mexico in late 2024, and livestock imports from south of the border were halted.
A proposal to quadruple imports from Argentina to about 132 million pounds would account for less than 1 percent of U.S. demand isn’t expected make much of a dent, said James Mitchell, extension livestock economist for the Division of Agriculture.
POULTRY
The poultry industry faced another year hard-pressed by highly pathogenic avian influenza. In the 30 days ending Dec. 15, the disease was reported in 34 commercial and 58 backyard flocks, affecting some 900,000 birds. While no commercial flocks in Arkansas were affected, In October, the disease was detected in a backyard flock in Mississippi County.
In addition to bird flu, turkey farmers were bracing for avian metapneumovirus, or aMPV, a highly contagious upper respiratory disease in turkeys that has become a threat to not only existing flocks but also future supply.
Despite the pressures, egg prices descended to normal levels, chicken meat prices remained highly competitive compared to beef and pork, and turkey prices remained level compared to 2024.
While egg prices are back down to normal levels, chicken meat is reasonably inexpensive and Thanksgiving turkey prices were comparable to last year, avian influenza remained a serious threat to the poultry industry in 2025.
With turkeys, very little of the increase in wholesale prices were passed to consumers for Thanksgiving because most of the production is forward contracted for the holiday season, Mitchell said.
To learn more about the Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website. Follow us on X at @ArkAgResearch, subscribe to the Food, Farms and Forests podcast and sign up for our monthly newsletter, the Arkansas Agricultural Research Report. To learn more about the Division of Agriculture, visit uada.edu. Follow us on X at @AgInArk. To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit uaex.uada.edu.
About the Division of Agriculture
The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system.
The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on three system campuses.
Pursuant to 7 CFR § 15.3, the University of Arkansas System Division of Agriculture offers all its Extension and Research programs and services (including employment) without regard to race, color, sex, national origin, religion, age, disability, marital or veteran status, genetic information, sexual preference, pregnancy or any other legally protected status, and is an equal opportunity institution.
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Media Contact: Nick Kordsmeier, nkordsme@uark.edu