Chief Economist Says Ag Support Must Show Results
Published: Friday, February 27, 2026
Government support for farmers cannot continue ad hoc without an end-goal in sight.
That's according to the newly-appointed chief economist for the U.S. Department of Agriculture, who gave an address during the opening session of the USDA Agricultural Outlook Forum last Thursday in Arlington, Va. Included in his remarks was his outlook for agricultural trade and for the 2026 farm economy.
"If we continue ad hoc support, it has to be a bridge to something," Chief Economist Justin Benevidez said concerning government assistance to farmers.
He joined the Office of the Chief Economist in January after serving in a similar role with the House Committee on Agriculture.
Benavidez reported that 2026 farm income is expected to rise, but about 25% ($44 billion) of that increase will come from federal support that is additional to safety net provisions.
"Do we continue this ongoing ad hoc support? If we stop, we will be in a case where we will lose producers," he said, adding that there could be regional impacts.
The solution, he said, is bridging to an increased safety net and better demand conditions.
Benavidez said that over the past 10 years there has been "substantial shock to the markets," between the renegotiations of trade with China in 2018, the pandemic in 2020 and Russia's invasion of Ukraine in 2022, among other things.
"What we've seen over the past 15 years, realistically, is headwinds from substantial amounts of supply with brief moments of price support," he said.
Benavidez said it is time to move forward, and there are multiple outcomes possible. These include: less production, lowering production costs and increasing demand.
Lowering production costs, he said, will be tough. However, costs are projected to decline by about .9% year-over-year and, while still historically high, is beginning to moderate.
"Bringing down cost of production is difficult, but we are beginning to see progress in that arena, and certainly it's going to be helpful in getting us back to profitability," he said.
He noted that there is some competition: global stocks for corn are near record levels, causing pressure from stocks on corn price. Also putting pressure on U.S. farmers is Brazil's growing trade share, especially in soybeans and cotton, as U.S. exports are in decline. He also noted competition and oversupply in wheat exports.
In addition to the federal assistance, farm income is made up of about 7% crop insurance and the rest from cash receipts.
Looking ahead to the 2026 growing season, Benavidez said it is important to consider the weather
conditions and how they might affect farm profitability. Heading into the end of the growing season, farmers will begin to see the effects of the El Niño, with warmer than average and wet conditions in the East, and drier than average conditions in the North and West.
Acreage across the U.S. is trending toward soybeans, with 85 million acres of soybeans and 94 million acres of corn expected in 2026, compared to last year when 98.8 million acres were dedicated to corn.
"Prices are expected to move modestly higher," he said.
This includes a 10-cent increase per bushel for corn, beans and wheat. This means there should be a moderate increase in the average net farm income, he said. Benavidez also expects higher reference prices for all commodities.
In specialty crops, Benavidez said the highest impact on the sector is labor costs, which are projected to rise about 45%.
Transitioning into the livestock sector, Benavidez said cattle shortages have driven up prices for beef, but beef-on-dairy trends have offered some moderation. However, this is altering the dairy sector's bottom line due to more cows being held longer for beef-on-dairy breeding purposes. This could lead to a strain on the dairy market as fewer replacement heifers are being utilized.
In poultry, there has been "a significant decline on egg prices."
Benavidez said that two years ago, about one replacement pullet was bred for every three layers, and that has now increased to one replacement for every two layers.
"The only supply chain decline in livestock and poultry was eggs," he said.
Benavidez noted the changing consumption patterns in the U.S., driven by an emphasis on protein, GLP-1, 45Z and RFS. He said these trends are opening up markets for agricultural products, including more protein markets and putting more soybean crush plants online.
Moving to agricultural exports (see related story), Benavidez said the U.S. is facing a lot of imbalance.
Higher-valued goods lead to trade imbalance domestically, and an increase in demand for bulk commodities globally is teetering agricultural trade for the U.S. in exports. He noted there was a boost in total agricultural exports between January 2024 and January 2025, but there are still several barriers, including non-tariff barriers on corn and soybeans, beef, poultry and pork.
"These are the problems that have to be solved in the long run," Benavidez said. "Demand is the solution out of the supply glut."
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