Charting the Course: 2026 and Beyond

Today's agricultural environment is complex and overwhelming, but charting a strategic course for your business, family, and personal goals is essential. Even the best-laid plans can be quickly disrupted by geopolitics, military conflict, tariffs, sanctions, and shifting consumer and societal trends. Layered with weather and economic volatility, producers are consistently faced with challenges and opportunities.

Split Economy

The current economy has a split personality; grain, row-crop, and specialty-crop operations with narrow revenue streams are decreasing in global competitiveness while many livestock operations are seeing a positive trend. This trend began in 2013 despite some temporary COVID-induced relief.

Three to six income sources seems to be the sweet spot in agriculture – including farm and off-farm income – as it provides resiliency, nimbleness, and agility.

Farmland values, comprising over 80 percent of U.S. farm balance sheets, remain stable and continue appreciating in some regions.

Farm asset transitions accelerate as veterans and baby boomers age out, complicating succession planning as off-farm successors often cash out or reposition assets into alternative income sources. Opportunities are expanding for young and beginning producers as over 20 percent of senior farmers have no identified successor.

Blocking and Tackling

Regardless of your business’s spot on the economic spectrum, good old-fashioned blocking and tackling focused on business fundamentals cultivates success. There are four business and financial pillars grounded in sound philosophies and practical wisdom to help navigate the current economy and prepare for the future:

1. Production excellence and cost efficiency. In crop, livestock, or value-added enterprises, being 5 percent better than your peers year-over-year fosters long-term success. This requires critical thinking, analyzing resource productivity, and evaluating income zones through benefit–cost analysis. Like the 1980s, some producers are shedding resources not compatible with production goals or logistical realities. Adding acres may satisfy the ego, but improving the long-term bottom line through innovation and adaptability is the optimal solution.
2. Owning the numbers. Numbers don’t just satisfy your lender, they chart the course of your business. Focus on big expenses like feed, labor, rent, and repairs where small adjustments compound and improve the bottom line. Be cautious of the “cost of everything and the value of nothing” trap that solely focuses on cutting costs; sometimes increasing costs is appropriate if the benefit–cost ratio is positive. Monthly and quarterly monitoring is the key to effective cost management.
3. Marketing and risk management. Know your cost of production and break-evens while recognizing they are moving targets in today’s economy. Marketing is about consistent base hits rather than swinging for home runs, while risk management mitigates major hits to profitability, financial liquidity, and net worth that threaten your business and family.
4. Capital efficiency. There is an old adage: get efficient before getting bigger. In favorable economic cycles, this wisdom is often overlooked. Tough economic times require a thorough assessment of capital to determine whether assets and management capacity are underutilized or not performing.

Charting the Course

Charting your course requires embracing simplicity before complexity. Identify key metrics for each pillar, outline them in a plan, and execute and monitor that plan. Foster a business culture of open communication with partners, spouses, lenders, and other stakeholders who provide input and guidance in achieving your desired goals.