I’m involved fairly close to this topic and have a hard time feeling sorry for producers. Coming out of 2020 Covid scares crop producers were profiting $400 to $600 (2020-2023) per acre and in some cases substantially more with exceptional yields, good prices and government subsidies. Where did all that money go, new equipment, new vehicles, boats, lake houses, EXCESSIVE family living, high value land purchases, big fancy sheds, etc. Where should it have gone, some for rainy day when times get tougher like they are now. Farmers have a hatred towards paying taxes yet sometimes there is a place for them to realize profits. Instead they spend $4 for every $1 they profit with profits and debt to save paying taxes. Well principal reduction on land is not deductible and you have to make money to make payments. Generally speaking 2025 was not a terrible year for profitability if expenses were managed and if yields were APH or above. And guess what, another government payment coming in the way of the bridge payments. The market does need to correct as cash rents are high along with other inputs but farmers had exuberant profits that they could have retained from a few years ago but instead they spent poorly. The average producer drives a brand new pickup and trades every couple years and has enough equipment to plant their crop in two weeks and to harvest the same. There are isolated cases of locally bad yields or drought in some of the cotton/rice areas coupled with lower market prices that have caused drastic problems in those areas. Farmers now expect $200 to $300 profits per acre all while pricing themselves to break evens. A lot of farmer balance sheets don’t even compare to average Joe on IW.
