MASON CITY — Iowa’s farm economy is under mounting pressure after net farm income plunged 53% in just two years, and the squeeze could continue as high production costs, weak crop prices and trade uncertainty hammer producers across the state — including the heavily agricultural economy surrounding Mason City.
A sweeping new agricultural outlook released in July 2026 by Iowa State University’s Center for Agricultural and Rural Development, the Iowa Farm Bureau Federation and the Iowa Bankers Association paints a troubling picture for Iowa farmers after the highly profitable years that followed the COVID-19 pandemic.
The report, “2026 Iowa Agricultural Outlook: The Pressure is Rising,” found Iowa net farm income fell 53% from 2022 through 2024.
To read the full “2026 Iowa Agricultural Outlook: The Pressure is Rising” report, jointly published by Iowa State University’s Center for Agricultural and Rural Development, the Iowa Farm Bureau Federation and the Iowa Bankers Association, please click here.
Researchers say Iowa’s agricultural economy is several years into a downturn, with corn and soybean prices retreating from their post-pandemic highs while many production expenses remain elevated.
That combination is particularly significant across North Iowa, where corn and soybeans dominate hundreds of thousands of acres and agriculture remains deeply tied to local businesses, lenders, equipment dealers, grain elevators, transportation companies and rural communities.
Cerro Gordo County offers a clear example.
According to the latest USDA Census of Agriculture, Cerro Gordo County had about 800 farms covering nearly 337,000 acres in 2022. Those farms sold more than $409 million worth of agricultural products that year.
About 81% of those sales came from crops.
Cerro Gordo County farmers harvested nearly 180,000 acres of corn for grain and nearly 116,000 acres of soybeans in the 2022 census year. Crop sales totaled approximately $332 million, including about $323 million from grains, oilseeds, dry beans and dry peas.
That heavy dependence on row crops means the financial forces identified in the new statewide report are especially relevant in the Mason City area and neighboring agricultural counties.
Production costs surge
The cost of growing Iowa’s two dominant crops has risen dramatically since the beginning of the decade.
The report says Iowa corn production costs have climbed approximately 37% since 2021, while soybean production costs have jumped about 36%.
Some individual expenses have risen even faster.
Machinery costs associated with corn production increased about 57%, while seed, chemical and fertilizer expenses rose approximately 39%.
For soybeans, machinery costs increased an estimated 74% since 2021, while seed, chemical and fertilizer expenses climbed about 37%.
Farmland-related production costs rose about 23% during the same period.
At the same time, enormous crop production has contributed to weaker commodity prices.
Researchers noted that four of the past five U.S. corn crops rank among the five largest ever produced, including a massive 17-billion-bushel crop. The five most recent soybean crops all rank among the 10 largest in U.S. history.
Production has been growing faster than demand, placing downward pressure on prices even as farmers continue paying historically elevated costs to put a crop in the ground.
The result is a classic farm squeeze: Farmers can produce tremendous quantities of grain while keeping less money after expenses.
Farm finances showing warning signs
The deterioration is beginning to show up on farm balance sheets.
According to the report, 19% of mid- and large-sized Iowa farms examined were considered financially vulnerable by December 2025.
That was more than double the 7.7% recorded in December 2022.
Researchers also found signs of deteriorating liquidity and greater working-capital needs among Iowa farms.
Demand for agricultural credit is rising, concerns about loan repayment are increasing and Chapter 12 farm bankruptcy filings have begun climbing from exceptionally low levels.
The report cautions, however, that Iowa is not currently experiencing anything comparable to the devastating farm crisis of the 1980s.
Farmland equity remains strong, agricultural lenders generally remain financially healthy and delinquency rates are still relatively low compared with previous periods of severe agricultural distress.
But researchers warned that the length of the downturn matters.
A short period of poor profitability can often be absorbed through savings, working capital, refinancing and accumulated land equity. Several additional years of poor margins, however, could steadily increase carryover debt, drain liquidity and weaken farmers’ ability to repay operating loans.
For farm-dependent communities across North Iowa, that could eventually mean less spending on machinery, vehicles, construction, supplies and other goods and services.
Agriculture drives nearly one-fifth of Iowa economy
The stakes extend well beyond individual farms.
The report estimates agriculture and agriculture-related industries contributed an average of $51.5 billion annually to Iowa’s gross domestic product from 2020 through 2024 — approximately 19% of the state’s total GDP.
Each job in agriculture-related industries supported an estimated 1.65 jobs throughout Iowa’s economy.
That means reduced farm profitability can ripple through communities such as Mason City, Clear Lake, Garner, Hampton and smaller towns throughout Cerro Gordo, Hancock, Worth, Franklin and surrounding counties.
Farmers who earn less may postpone buying tractors, trucks and equipment, reduce construction projects and spend less with local businesses. Agricultural suppliers and processors can feel the downturn, followed eventually by retailers, service companies and local governments.
Cerro Gordo County alone had more than $291 million in farm production expenses during the 2022 Census of Agriculture — money flowing through seed dealers, fertilizer suppliers, machinery businesses, lenders, repair shops, fuel providers and other parts of the regional economy.
Trade uncertainty adds another risk
International trade represents another major source of uncertainty.
Iowa ranked second among all states in agricultural commodity export value in 2024, with approximately $13.7 billion in exports, according to the report.
Corn and soybeans remain among Iowa’s most important crops and depend heavily on global markets.
The report specifically examines county-level exposure to retaliatory tariffs involving China and concludes that agricultural counties producing commodities targeted in trade disputes can face greater economic exposure.
Soybeans are particularly sensitive because China historically has been such an important buyer of U.S. soybeans.
That matters across North Iowa, where soybeans occupy vast stretches of farmland alongside corn.
International competition also continues to intensify.
Long-range economic modeling examined in the report points to continued growth in Brazilian agricultural production and exports, creating additional competition for U.S. farmers in global corn, soybean and biofuel markets.
Uncertainty involving tariffs, international trade, inflation, labor, federal farm policy and global conflicts makes long-term planning increasingly difficult for producers.
Livestock offers a bright spot
Not every part of Iowa agriculture is suffering equally.
Livestock has provided one of the strongest areas of profitability.
Estimated monthly returns for Iowa cattle feedlots averaged a record $556.70 per head in 2025. Through May 2026, estimated returns remained strong at approximately $496 per head.
Hog producers also generally returned to profitability after suffering severe losses earlier in the decade. Estimated farrow-to-finish hog returns averaged about $27 per head in 2025 and roughly $17 per head through May 2026.
Lower corn and soybean prices have helped livestock producers by reducing feed costs.
That diversification matters in Cerro Gordo County, which had more than 110,000 hogs and pigs and approximately 10,400 cattle and calves according to the 2022 agricultural census.
Livestock sales totaled approximately $77.5 million in the county that year, including nearly $53 million in hog sales and almost $24 million from cattle and calves.
Still, livestock producers face their own challenges.
Cattle supplies remain historically tight, making replacement animals expensive. Hog producers face changing consumer demand and market conditions, while poultry producers continue dealing with disease risks including highly pathogenic avian influenza.
No quick turnaround guaranteed
Perhaps the most concerning conclusion of the report is that Iowa’s agricultural downturn may take time to work through.
The report describes Iowa agriculture as several years into a downturn following the exceptionally profitable period of 2021 and 2022.
Preliminary projections examined by researchers show Iowa net farm income increasing temporarily in 2025, aided substantially by government payments and stronger livestock returns, before declining again in 2026 and 2027.
Researchers noted that agricultural profit cycles frequently stretch seven to 10 years.
The current downturn followed the unusually profitable 2021 and 2022 period, when strong commodity prices and other economic conditions pushed farm income sharply higher.
Those conditions have changed.
Commodity prices have retreated while many of the expenses farmers accumulated during the boom remain elevated.
The report concludes that Iowa farmers have so far shown considerable financial resilience, supported in part by strong farmland values and accumulated equity.
But continued weak margins could increasingly spread beyond the farm gate.
For North Iowa — where agriculture remains woven deeply into the economy surrounding Mason City and scores of nearby rural communities — what happens on the farm over the next several years could increasingly determine what happens on Main Street.
Thanks trump
Why would it be Trumps fault that farmers are poor business managers and can’t learn to live within their means ? Still see new 80K pickups driving around and building new multi million homes and grain bin sites. So where is the decline income ??? What a scam.