Around this time every year, many of us try to predict what the next year will have in store for agriculture. I’m always reluctant to predict the future, but I like to read other’s predictions.
Being an optimist, I think agriculture may have a decent year in 2026, providing the weather and politics are good to us.
But producing agriculture products is always a risky business – it always has been since our products are commodities.
Farmers look to have the greatest risk throughout the next year, even though China and the U.S. signed a trade deal for China to start buying soybeans and other grains. However, I’ve heard China hasn’t been in a rush to hold up their end of the deal.
The U.S. Department of Agriculture announced there is money available for farmers, although it may take a while to get through the system.
In November, only 16 percent of farmers who responded to a survey said they thought they would receive any payments. Hopefully it will all work out since some farmers are in tough shape financially.
But, farmers are a “cup half full” group. The Short-Term Farmland Value Expectations Index has been rising as farmers’ long-term outlook has somewhat improved. Farmers believe farmland values are improving and farmland rentals will stay about the same as they were in 2025. The strong outlook for cash rents further supports farmland values.
The cattle and beef outlook seems to remain strong for 2026. There is nothing out there to indicate cattle prices will start to fall.
In his First Quarter 2026 Outlook, Terrain Senior Animal Protein Analyst Dave Weaber writes about packinghouses’ reduced cattle slaughter capacity.
Weaber says, “Terrain estimates the changes will eventually reduce U.S. slaughter capacity by about 6.6 percent. However slaughter plant capacity utilization is still nearly six percent behind historical norms, as the number of cattle is still well short of filling slaughter capacity.”
Weaber predicts the downsizing of packinghouses will cause packers to be more efficient in processing and reduce shifts to meet lower numbers of available cattle to better compete for available fat cattle.
Weaber adds, “I expect utilization to decline by about two percent during 2026 when the two new plants in Nebraska and Missouri complete their startups. Even without additional future slaughter capacity, utilization rates will remain low and fed cattle numbers are expected to decline during the next two to three years because of cow/calf producers’ beef cow herd expansion efforts.”
I think there will be some cattle herd expansion, but drought conditions and high prices could keep cattle numbers low.
As long as the U.S. doesn’t open the southern border to Mexican cattle, cattle prices should stay high, and even if they do, some Mexican cattle producers have found other places to feed and process their cattle.
As you can see, there are a lot of what-ifs out there. It calls for some good risk management in the hills and feedlots.
Dennis Sun is the publisher of the Wyoming Livestock Roundup, a weekly agriculture newspaper available online and in print. For more information, visit www.wylr.net
