How deep into an ag crisis farmers think they have fallen depends on a number of things. First off would be how long they have been draining equity and their depletion of working capital. For a slice of farmers, it has already gone on too long and has cut too deep. They have not made money and are bleeding equity. Their operations are in a terminal stage, and they can see buzzards circling overhead.

USDA financial aid will temporarily save some but not all. They have structural problems that either they cannot or will not make the changes necessary to overcome them. There was really no good crop choice this year even in places where they have more choices about what to plant than we do here in northwest Iowa. Loss projections for ag crops in general show they were all losers. Our critics often say we lose money because we just grow corn/soybeans. They cannot make suggestions, however, of alternative crops because nothing has been profitable and if there was a profitable niche, its margin too would be quickly crushed when enough farmers shifted to it. The solution is not so simple as to just grow different crops.

I have argued for the imperative need to grow demand. Ag lenders are no more in control of conditions and events than we farmers are and are trying to manage farm leverage so that it doesn’t become another 1980.

I am not talking about a bad year now and then. There are ups and downs. Good yields-bad yields, good prices-bad prices are part of the game. Those things tend to correlate by the way. We had our billion dollar flood here in northwest Iowa in 2024. Via crop insurance, including prevent-plant, cutting costs, USDA aid checks and marketing … the cash rent and farm payment got made. This year, because of a record corn yield, our primary crop, corn, will make money with our $4 breakeven, and there should be both Trump tariff ACHs and farm program receipts coming yet as profit. Last year, I used the flood-related prevent-plant area as opportunity to restructure a draw using CRP and conservation cost-share (for which the USDA has not yet paid) and pattern tiled the area. The tile paid off and was one of the reasons for our all-time record corn yield in 2025. Our result was an exception, as the average state or national corn yield lost money.

The ag depression of the 1980s was a real farm crisis, and this one will be different, and just like the rest of the economy is more bifurcated or trifurcated. How farmers are impacted will be determined by how much equity they have, what they produce and where they produce it. High equity farmers that own a lot of their land will be able to add a farm as opportunity knocks. By my estimate, land prices are off 20% from their highs where we live but are still well above 2019 levels when we made our last farm purchase. Most farm values are above water as to purchase price and well above water relative to equity. Lenders restricted the amount they would loan on farms, having learned a lesson from the 1980 crisis that broke a lot of banks. If leveraged, this time, most farmers have historically low fixed-rate mortgages. In 1980, you could borrow most all of the purchase price for farmland and then when values plunged and variable interest rates soared, the weakness was fed by distress sales of land recently purchased being forced back onto the market. Farmland lost 80% of its peak value in that disaster.

Most land being sold now is estate related and the buyers are legacy farms adding to existing holdings. There are some signs of liquidity problems as a few farmers are selling a parcel to gain liquidity but that is isolated and regional. The farm problem right now is primarily one of “margins.” There are payments to make and families have expenses to live. New machinery sales are off over 60%, but used equipment values have not fallen as much yet.

One change that occurred out of both desire and necessity from the ag crisis of the 1980s was that the wives went to work. Some wanted to, but many had to. Second incomes actually meant that there was an income when the farm produced none or lost.

Commstock Investments was a product of the ag crisis of the 1980s. All of its founding employees, from office secretary to IT technician, compliance and financial officer to the brokers and me, were all active farmers. Many of our current employees still are active in farming. Off-farm employment allowed farm families access to employer health insurance and retirement programs. Family farms became successful husband/wife partnerships.

Second to outside income, another near requirement for sustaining farming viability, is diversification from involvement in value-added enterprises. Crop diversification doesn’t work well when all commodity crops lose money. Diversification is no guarantee of profitability either … just ask the dairy industry. The availability of value-added enterprise varies regionally. Our family once produced eggs, milk, alfalfa, oats, corn, soybeans, farrowing and finishing hogs and finishing cattle in its history. That is why I fought so hard for independent livestock producers in this report. We lost that battle for independent producers in the hog/pork industry as they no longer own the hogs, but the cattle industry is still independent.

Diversified or livestock-heavy regions remain stronger than grain-dominant areas. The value-added component to ag is why the state of Nebraska is outperforming Iowa financially and why the state of Iowa is outperforming the state of Arkansas in farm income. Nebraska feeds cattle and produces ethanol. So does Iowa, just not as much. The state of Arkansas lacks value-added enterprises, and the state appears to be the epicenter of this farm crisis for farmers there. I am consistently getting ethanol plant investment dividend checks. My idea for an “ethanol put option” has worked to add value. Nebraska is on its way to building the next value-added enterprise …l ow carbon CO2 sequestered ethanol, while some Iowa landowners and the legislature are mistakenly fighting a CO2 pipeline. Ethanol plants on this pipeline are poised to expand by 25 to 100% capacity which would have a material impact on corn demand. This is a huge mistake that will handicap Iowa while Nebraska benefits.