Plagued with disastrously low prices and wild weather, many Kansas farmers were more than happy to see the holiday season arrive….if for no other reason than to have 2025 behind them and to be done with it.
So how did 2025 turn out? Actually, here on our farm things turned out pretty well. And that was despite commodity prices being way below cost of production. So what did we do right? Well, it wasn’t anything we did, it was because we and other farmers in this area had a very wet year and crop yields were a career high.
On a broader scale, our Scott City accountant says because of super high yields, his farm clientele had an “OK” year and not much better than that.
But if you were not in this wet area and did not have the yields, ’25 was not a very pleasant experience and, for many, it was a very painful experience. For instance, instead of 150-bushel dryland corn, I talked to farmers in northwest Kansas and southwest Nebraska whose corn got up 3 foot tall….and died…. because of severe drought.
And on an even broader scale, that coincides with what Kansas State University says about the declining farm financial situation. In ’21, just 4% of Kansas farmers had negative farm incomes but by ’24, that number had jumped to almost 30%. The figures are not in yet for ’25, but the outlook for ’26 is very worrisome. In a national survey of ag lenders, 93% expect farm debt to increase this year and 70% say they’re very worried about grain profitability. That’s a safe bet. K-State says to cover all costs on dryland western Kansas wheat, we need a breakeven price of $7.20 per bushel.
Wheat right now in Dighton, Kansas, is $4.30 a bushel.
A big part of the problem facing United States agriculture is we have had very good production worldwide leading to chronic oversupply….and even lower prices. K-State ag economist Dan O’Brien says Kansas wheat prices could be as much as 50 cents a bushel lower this year. And for that matter, the U.S. Department of Agriculture says carryover of every major commodity will go up and prices will go down.
What’s next
So back here on our farm, how does ’26 look? Can we expect career high yields again, for the second year in a row, to bail us out? I wouldn’t bet 5 cents on that outcome. If you want to bet, you always bet on average. And if we have average yields with even lower prices, it could be ugly. One of the Federal Reserve Banks agreed and said their projection was ’26 would be where agriculture hits bottom. I hope they’re right.
Realistically, though, we have some other very serious problems to deal with. For instance, the trade war and tariffs have been incredibly bad farm policy. For instance, North Dakota State University’s Ag Trade Monitor says the tariffs added 9% to farm input costs. And outside of the farm economy, Yale University, and others, says the tariffs cost each U.S. household $1,700 in higher costs.
What’s more is the trade war is greatly responsible for the mounting inventories of unsold grain here in the U.S. For instance, China, which historically buys 40 to 50% of our exported soybeans and 80 to 90% of our exported grain sorghum, bought virtually nothing for the greater part of ’25. And within 5 miles of our farm, with all the local elevators filled with grain, sits probably another 5 million bushels of unsold grain, mainly grain sorghum, stored outside in ground piles. And God only knows how long it’ll sit out there.
China today
So what were the Chinese doing when they were not buying from the U.S.? They did exactly what you and I would have done. They sent their cargo ships down to South America and loaded them with Brazilian soybeans or over to Australia to get their grain sorghum. And as a consequence of record exports to China, Brazil is expanding their soybean acreage another 4%. And that additional production will forever haunt US farmers. And it will definitely reduce our ability to compete in the international marketplace.
And while we are supposed to have a new trade agreement with China, I’d call it weak at best. With soybeans, for instance, they’ve historically bought 29 million metric tons a year. But in the agreement, they’ll buy a lot less—only 25 MMT. Buying less is a win? And if this new agreement is anything like the one that was negotiated after the first trade war, I don’t think I’d be going out and buying more land or bigger tractors. In that agreement, the Chinese said they’d buy so many million metric tons of soybeans. But the fine print said, “If they need it and if the price is right”. Neither condition was met so they reneged on the deal. Will they follow through this time?
Do we even have an agreement with China? Market consultant Dan Basse with Ag Resource in Chicago says, “I don’t believe we have a deal to import 25 MMT over the next three years. My Chinese government contacts say they know of no deal. When I asked USTR to confirm, they said China will buy 12 MMT of soybeans this year, but did not confirm a deal for 25 MMT for ’26, ’27 or ’28,” Basse says. “This places the U.S. right back in China’s hands in lowering U.S. tariffs for them to secure U.S. bean—or other grain—on a state-by-state basis for the remainder of ’26. American agriculture needs to think about a future without China,” Basse warns.
He adds that the landscape for U.S. agriculture looks grim for the next three to five years—possibly longer.
USAID did provide value
The news doesn’t get any better. In the alleged hunt for waste, fraud and abuse, which lead to the termination of USAID, we did away with a $2 billion a year market for U.S. farm products which is now no longer there to help support our farm markets in times like these. In addition, when USAID was killed, along with it went $50 million in ag research at K-State, which definitely helped us Kansas farmers in addition to farmers in other politically and economically vulnerable areas of the world. And that’s just at K-State. In addition to those cuts, other cuts to other USDA programs only made the matter worse for Kansas and U.S. agriculture.
Louise and I talked to a prominent wheat breeder who said those cuts will definitely have a negative impact on the wheat breeding program at K-State.
In addition, while on campus several months ago, we talked to another researcher who had just
lost a $110,000 federal grant because in the title it contained these words, “alternative energy”. He told of other researchers who had also lost federal funding because their research did not align with where the current administration wants to take the country.
This is incredibly bad news for agriculture because we are a mature industry characterized by intense competition and very tight profit margins. And, as such, we have a carnivorous appetite for research which we rapidly adopt to either reduce costs or to increase production. For instance, a new wheat variety that yields 3 or 4 bushels more per acre than the next best thing out there will be adopted very rapidly. But if it’s not there, then what?
Vance Ehmke is a farmer from Healy, Kansas.
