2026 Crop Outlook Shows Supply Outweighs Demand
Published: Friday, January 2, 2026
As Indiana corn and soybean producers wrap up the 2025 harvest and look toward 2026, the latest U.S. Department of Agriculture World Agricultural Supply and Demand Estimates (WASDE) from December describes the challenges in the corn and soybean markets.
Record corn exports and steady growth in domestic use cannot offset the impact of record corn production and surging corn supply causing increased stocks. Soybeans face tighter supplies but softer exports. Add in ongoing cost pressures, and it is clear the margin squeeze has not abated. However, some government support programs could provide an inflow to improve liquidity.
The 2025 U.S. corn crop came in at a record 16.75 billion bushels, up significantly from last year, thanks to the largest harvested acreage since 1933 (around 90 million acres) and a trend-topping national yield near 186 bushels per acre. Total supply for the 2025-26 marketing year is projected to increase by nearly 10% after factoring in beginning stocks and imports.
Demand is not expanding fast enough to absorb the larger crop. Feed use is expected to rise by about 7.5%, primarily driven by the residual component, which increases with production. Exports are a bright spot and are estimated in the December WASDE to set a record at 3.2 billion bushels. Still, ending stocks are forecast at roughly 2 billion bushels, the highest carryout in several years and equivalent to about 49 days of use (up from 37 days last year).
The season average farm price is pegged at $4 per bushel, down about 24 cents from 2024-25. That is a drop of over $2.50 from the 2022 peak as stocks have recovered. For Indiana farmers, this means planning for lower revenue in 2026 unless yields are better than budgeted or demand increases, pulling prices higher.
Soybean supplies for 2025-26 are down about 3% from last year, primarily due to reduced planted acres that more than offset a record 53 bushel-per-acre national yield. Total use is projected slightly lower, with crush up 4.5% on strong domestic demand for the biofuels market.
Unfortunately, exports are down sharply—around 13%—a casualty of the trade war with China. Ending stocks are expected at 290 million bushels, translating to roughly a 23-day supply heading into September 2026 (down three days from the prior year). The marketing-year average price is forecast at $10.50 per bushel, a 50 cent increase from 2024 but still $3.70 below the price received in 2022.
Purdue University's preliminary 2026 crop enterprise budgets (published in September 2025) highlight the profit margin squeeze facing farmers. For a 1,000-acre corn-soybean rotation farm on average productivity soils:
• Returns over variable costs are projected around $226 per acre—similar to or slightly better than 2025, assuming trend yields and current input costs.
• Overhead expenses (land rent, machinery, labor) are slightly higher.
• After accounting for those, the bottom line shows a projected loss of about $106 per acre for farms with 50% rented ground—roughly the same as 2025's budgeted shortfall.
Without higher prices or exceptional yields, breaking even will be tough for many operations.
The Trump administration's Farmer Bridge Assistance Program (FBAP), announced recently, provides payments in early 2026 based on 2025 certified plantings. The FBAP is expected to be similar to last year's ECAP program. Farm CPA Paul Neiffer calculates FBAP payments at around $48 per acre for corn and $31 per acre for soybeans. Details are forthcoming, but farmers have already qualified by certifying their planted acreage to their local FSA office this past summer.
Looking further ahead, the new farm bill's revised ARC and PLC programs could deliver additional payments in October 2026 to help with any liquidity problems. Simulations developed by agricultural economists at the University of Illinois indicate that PLC is likely to have a higher payment rate than ARC in most Indiana counties. Average projected 2025 PLC payments:
• Corn: $55 per planted acre (ranging $40-$66 across counties; higher in 87 of 92 Indiana counties).
• Soybeans: $20 per planted acre (ranging $16-$25; higher in 64 of 92 counties).
Remember that ARC and PLC payments are based on final 2026 prices. The payment rates will not be official until October 2026.
The FBAP and potential ARC/PLC payments are only band aids for cash flow problems in a tough economy. Multi-year liquidity issues often signal deeper challenges that deserve attention—whether it is from high cash rents, machinery driving up costs per acre, or family living expenses that could be reduced.
Alternatives like flexible cash leases (with a lower base rent plus bonuses for high yields/prices) can share risk with landowners. Custom farming or leasing equipment might cut machinery ownership costs. Family living expenses vary greatly. However, University of Illinois records show that farm families of similar sizes vary widely in living expenses—some have found effective ways to economize without sacrificing quality of life.
Heading into 2026, vigilance on costs, marketing and the use of available farm program payments will be key to weathering the cycle. Indiana's corn and soybean farmers have navigated challenges before—staying informed and adaptable remains the best path forward.
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