Farm Production Costs Rise Faster Than Crop Prices Since 2018 Farm Bill

The farm economy has changed significantly since the 2018 farm bill, with production costs rising faster than the prices farmers receive for their crops. A recent study from multiple farm groups shows that the prices-paid index for crop production inputs climbed more than 38 percent from July 2018 through July 2026, while the prices-received index for crop products increased about 24 percent. That widening gap means higher commodity prices don't translate into stronger farm margins. As input costs rise faster than product values, break-even prices increase and producers have less room to absorb market declines or unexpected expenses. Farmers and ranchers have also faced higher interest rates, rising equipment and farmland costs, and increasing farm debt. Higher land values have strengthened balance sheets, but they also raise costs for beginning farmers and those looking to expand. The changes demonstrate the need for a new farm bill that reflects today's higher costs, greater capital requirements, and increased risks.

Cattle on Feed Report Placements Below Expectations

August cattle placements came in well below expectations in the latest Cattle on Feed Report, signaling a potential shift in the cattle market as fewer animals move into feedlots. Oklahoma State University Extension livestock marketing specialist Derrell Peel says August marked the second-straight month of sharply lower placements. Placements fell 9.2 percent from a year ago, while marketings declined 3.3 percent. The September 1 on-feed total was 11.2 million head, seven-tenths of a percent above last year. Peel says the larger on-feed number has been driven by marketings falling faster than placements. He expects that to change in the coming months. “I expect that we’ll get the on-feed total back below a year ago here in the next couple of months and be that way for some period of time,” Peel says. The August placement figure also fell below the entire range of pre-report estimates. Peel says the unexpected decline could be bullish for cattle markets.

China’s U.S. Farm Purchases Remain Slow

China’s purchases of U.S. agricultural products remain well below the pace needed to meet a recently announced trade commitment. The White House said in May that China would purchase at least 17 billion dollars of U.S. farm goods annually through 2028, with the 2026 target prorated. Soybeans were excluded from that figure because China separately pledged to increase soybean purchases, However, Agriculture Department data show China bought just 3.9 billion dollars of U.S. agricultural products, excluding soybeans, during the first seven months of 2026. Bloomberg said that was only slightly more than the same period last year, when purchases were at a six-year low. “As we look back over the last several years, we’ve had inconsistencies,” said National Sorghum Producers CEO Tim Lust. “It’s been really good at times, and it’s been really slow at times. So that’s one of the things that we’re hopeful out of this, that we get that more consistent trade volume.”

California Clears Final Hurdle For E15 Sales

California has cleared the final regulatory hurdle for retailers to offer E15 gasoline, potentially opening a major new market for ethanol. Governor Gavin Newsom signed Senate Bill 795, the E15 Clean-up Act, into law following unanimous passage by the California Legislature on August 31. The Renewable Fuels Association says the law allows retailers to use existing vapor recovery equipment to dispense E15 if manufacturers provide state agencies with a statement confirming compatibility. RFA President and CEO Geoff Cooper says the action removes red tape that had prevented E15 sales. “California drivers are about to experience those same advantages for themselves,” Cooper says, pointing to lower costs, reduced emissions, and improved engine performance. Recent studies cited by RFA estimate E15 could save California drivers at least 2.7 billion dollars annually, or about 200 dollars per household. The law could also significantly expand ethanol demand in the nation’s largest gasoline market.

State Agriculture Leaders Gather For NASDA Annual Meeting

Agriculture leaders from across the country gathered in Maine, for the National Association of State Departments of Agriculture’s 2026 Annual Meeting. Roughly 460 people attended the meeting in person or virtually, where state agriculture commissioners, directors, and secretaries discussed challenges and opportunities facing farmers and ranchers. Maine Agriculture Commissioner and NASDA President Amanda Beal says bringing state leaders together helps them tackle shared challenges and identify opportunities to strengthen agriculture nationwide. Agriculture Secretary Brooke Rollins also addressed the group, highlighting USDA’s work with states and announcing the new Stand-Up Program. The initiative will provide up to 50 million dollars to help states join or expand federal-state meat inspection programs. NASDA CEO Ted McKinney highlighted the new Data on Economic and Bankruptcy Trends Project, developed with the National Agricultural Law Center, which provides a more comprehensive look at agricultural bankruptcy trends across the country. Washington Agriculture Director Derek Sandison was elected NASDA president for 2026-27.

Young Farmers Raise Concerns Over Senate Farm Bill

The Senate Agriculture Committee has advanced its version of the 2026 Farm Bill, but the National Young Farmers Coalition says the legislation still falls short on issues affecting the next generation of farmers. The Agricultural Act of 2026 advanced from committee September 16 on a 12-11 party-line vote after the panel resumed business that had stalled in August.  Young Farmers Executive Director Michelle Hughes says the coalition recognizes bipartisan provisions supporting small farms, farmer education, and local food programs, along with improvements to Farm Service Agency financing. However, the group says the bill does not include the New Producer Economic Security Act, which would provide flexible financial support to new and beginning farmers during the early years of establishing a farm business. Young Farmers also says the legislation does not address what it describes as significant barriers to affordable farmland access or restore nutrition funding.

Tuesday Watch List

Markets

On Monday, USDA will release their weekly Export Inspections report at 10 a.m. CDT. In the afternoon at 3 p.m. CDT, the weekly Crop Progress report will be released, with an increased interest in harvest progress given wet conditions across the U.S. grain belt.

Weather

A front that has been stalled across the Corn Belt for most of the last week is starting to push southeast on Monday. Areas of showers and thunderstorms will work down into the Delta and Southeast throughout the day. Showers will continue across the Plains though, too, increasing soil moisture for several areas there.