2026 MARKET TRENDS
Agriculture
Key Takeaways
- The 2025 Farm Bill expanded federal subsidies for crop insurance, helping offset producer costs, though tariffs and global trade pressures continue to introduce market uncertainty
- Crop insurance premiums are expected to remain stable or modestly decline for the 2026 crop year, supported by favorable loss ratios and the absence of major legislative disruption
- Continued weather volatility and commodity price uncertainty underscore the importance of a comprehensive risk management approach that integrates crop insurance with broader financial planning
As volatility across weather, pricing and input costs continues, crop insurance remains a critical tool for protecting operating income and supporting long-term farm viability.
Overview
The crop insurance market is operating in a dynamic risk environment shaped by legislative developments, government support and ongoing global trade pressures. The 2025 Farm Bill introduced increased federal subsidies for crop insurance, helping expand financial protection and reduce costs for producers. At the same time, tariffs continue to influence export demand and market stability. Weather volatility and fluctuating commodity prices remain persistent factors affecting farm revenue, reinforcing the need for proactive and well-structured risk management strategies.
Market Conditions
The 2026 growing season is expected to reflect many of the conditions seen in 2025, with continued pressure on farm profitability driven by high input costs and variable commodity prices. While these challenges persist, favorable loss experience and stable program fundamentals provide a more predictable crop insurance environment for producers who actively manage risk.
As volatility across weather, pricing and input costs continues, crop insurance remains a critical tool for protecting operating income and supporting long-term farm viability. Producers that align insurance decisions with broader financial and operational planning will be better positioned to manage uncertainty and sustain their operations across future growing seasons.
Elevated production costs:
Farmers are expected to continue facing high input expenses. Seed, fertilizer and land rents remain elevated, with non-land costs for crops such as corn estimated near $800 per acre and total costs exceeding $1,050 per acre in some regions.
Trade agreements:
Commodity prices remain closely tied to trade conditions. Early projections suggest corn prices around $4.50 per bushel, while soybean prices may continue to soften, with forecasts near or below $10.50 per bushel.
Crop insurance utilization:
With margins remaining tight, most producers will continue to rely on crop insurance to limit financial losses rather than guarantee profitability.
Risk management strategies:
While revenue protection remains the primary risk management tool, county-based programs are gaining traction. Enhanced Coverage Option (ECO) and Supplemental Coverage Option (SCO) are increasingly used due to higher subsidy levels and lower deductibles.
Enhanced Coverage Option (ECO):
ECO continues to draw interest following the increase in subsidy support to 80%, providing county-indexed revenue protection across a 95% to 86% coverage band with a limited deductible.
Strategic outlook:
Closely monitoring market conditions and managing input costs will remain critical. Rising expenses, volatile pricing and narrow margins reinforce the need for disciplined, proactive risk management.
Rate Outlook
Multi-peril crop insurance rates benefit from uniform federal rates, ensuring rate stability without competition. With 2025 being a low-loss year and no farm bill changes until September 2026, farmers can expect favorable premiums for 2026.
Impacts & Considerations
Navigating the agricultural landscape requires a proactive approach to risk management, especially with persistent challenges like unpredictable weather and fluctuating commodity prices.
The connection between crop insurance and net farm revenues demands more than simple policy selection; it requires true risk management
An analytical focus and robust risk management program is crucial to help secure financial stability and achieve favorable renewal outcomes in the year ahead
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