Ag Econ Update: Seth Meyer, former USDA Chief Economist | January 5, 2026

🔑 Key Takeaways from the Video

• Farmer bridge payments were designed for speed, not trade mitigation. Payments were calculated based on cost-of-production shortfalls to help producers navigate tight margins until ARC and PLC support becomes available later in 2026.
• Row crop margins remain under pressure, with policy clarity critical to demand. Biofuel policy decisions — including Renewable Volume Obligations, 45Z guidance, imported feedstocks, and year-round E15 — represent some of the most meaningful levers available to support corn and soybean demand.
• China remains difficult to replace as a soybean buyer. While progress is being made on purchase commitments, China’s scale creates ongoing uncertainty that complicates acreage decisions and long-term planning for producers.
• Wheat and cotton face the toughest outlooks. Ample global wheat supplies and intense export competition continue to weigh on prices, while cotton struggles with long-term demand erosion and competition from synthetic fibers.
• Livestock markets are supported by tight supplies — but not without risk. Strong cattle prices, consumer affordability concerns, trade access, and disease threats all intersect to influence herd rebuilding and long-term stability.
• The broader ag economy appears stable — but stalled. Without a new demand shock or meaningful policy shift, producers may remain in a familiar cycle of tight margins and cautious optimism.

2026 Outlook — A Market Searching for Its Next Spark

As the agricultural sector turns the calendar to 2026, former USDA Chief Economist Seth Meyer, now leading the Food and Agricultural Policy Research Institute at the University of Missouri, offers a clear-eyed assessment of where farm economics stand — and why relief remains uneven across commodities. Speaking candidly, Meyer frames the current environment as one marked by tight margins, policy dependence, and an industry still waiting for its next meaningful demand catalyst.

At the center of the conversation are the farmer bridge payments announced just before year-end — designed to provide short-term support as producers navigate prolonged margin compression. Meyer explains that these payments were calculated not as trade mitigation, but as economic relief tied to cost-of-production shortfalls, using an ECAP-style framework to ensure speed of delivery. In his view, timing mattered as much as the dollars themselves: bridge payments only work if they arrive before producers are forced to make difficult financial decisions.

Looking beyond immediate assistance, Meyer highlights the broader transition underway — away from ad hoc disaster and emergency programs and back toward the traditional safety net provided by ARC and PLC. Whether that safety net proves sufficient, however, depends heavily on policy choices still unresolved in Washington. Biofuel policy, particularly decisions around Renewable Volume Obligations, 45Z tax credits, imported feedstocks, and year-round E15, emerges as one of the most significant levers available to support row crop demand in the near term. Without clarity, uncertainty continues to hang over corn and soybean balance sheets.

Trade remains another defining variable. While corn exports have performed relatively well without heavy reliance on China, soybeans tell a more complicated story. Meyer notes that China’s progress toward its soybean purchase commitments bears watching — but equally important is how U.S. soybeans compete globally as Brazilian supplies enter the market. The sheer scale of Chinese demand makes replacement difficult, creating instability that complicates acreage planning and long-term market confidence.

Among crops, Meyer is most cautious on wheat and cotton. Wheat faces abundant global supplies and aggressive competition from Black Sea exporters, keeping prices under pressure despite steady shipments. Cotton, meanwhile, struggles with long-term demand erosion driven by synthetic fiber competition and muted global consumption growth — challenges that trade improvements alone may not fully resolve.

Livestock presents a more nuanced picture. Tight cattle supplies continue to support strong prices, but Meyer emphasizes the delicate balance between maintaining producer profitability and addressing consumer price concerns. Policies affecting beef imports, plant access to China, and disease risks such as New World screwworm all factor into decisions that influence herd rebuilding and long-term stability. In dairy, expanding global milk production and slowing price momentum point to tighter margins ahead in 2026, even as beef-on-dairy continues to provide some income support.

“We go through these cycles where you come off a price spike and things are rough for several years — until the next shock comes along or we see a policy change that pulls us out of it.”
— Seth Meyer

Ultimately, Meyer characterizes the current ag economy as stable, but stuck. Prices may not deteriorate significantly further, but meaningful improvement likely depends on either a new demand shock or decisive policy action. Until then, producers remain in a familiar cycle — navigating tight margins, weighing risk carefully, and waiting for the next force capable of reshaping the market landscape.