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  • Resilient Calf Prices, Rising Input Costs, & Relentless Drought

    Resilient Calf Prices, Rising Input Costs, & Relentless Drought

    Last year was an interesting year for the cattle industry, which came with its own set of rewards and challenges for cattle producers. The first quarter of 2026 has not fallen short of keeping things interesting, for lack of a better term. Continued drought conditions, rising input costs due to the Iran war, and uncertainty as to how long high market prices will last are all contributing to the slow movement towards rebuilding the cow herd.

    As of April 14, 2026, the U.S. Drought Monitor indicated that 100% of the Southeast is experiencing some level of drought, with 75% of the region experiencing severe or extreme drought. Areas of exceptional drought are occurring in the Florida Panhandle and in South Georgia. Prolonged drought conditions combined with the unusual freezing temperatures at the beginning of the year have resulted in stressed forages and weed emergence. Compensating for limited forages makes it challenging to maintain an existing herd’s nutritional requirements, further hindering the decision to increase herd numbers. We have officially transitioned from La Nina into an ENSO-neutral pattern that is expected to quickly move into El Niño this summer, hopefully bringing some much-needed rain soon.

    In addition to drought conditions, fertilizer and fuel costs have risen well above year ago levels due to the Iran war. Average diesel fuel prices in April are 55% higher than in April 2025, with prices reaching over $6.00/gallon in some areas. March prices in the Southeast for potash, UAN, and urea, were 5%, 52%, and 50% higher year over year, respectively. Increases in fertilizer costs will influence decisions on how much fertilizer to purchase this year, potentially resulting in reductions in forage quality and yield. Without adequate forage and with increases in input costs, the thought of increasing herd numbers moves to the back of the line. 

    Cattle prices, with the exception of a few corrections at the start of the year, are continuing to hold strong. Prices the week of April 13th for 500–600-pound steer calves in the Southern Plains were 31% higher than April 2025 and 128% higher than the 5-year average. Strong consumer demand and tightening supplies are supporting high prices and will eventually encourage retention and expansion. Decisions have already been made to stabilize by holding more heifers back this year as we saw in the USDA Cattle Inventory report. But rising costs and forage availability could prolong the shift from stabilizing to rebuilding if the resources are not there to support the growth. Nonetheless, another year of profitable returns to cow-calf producers is expected amidst another “interesting” year in the cattle industry.

    U.S. Department of Agriculture. (2026). Fertilizer prices by region. https://agtransport.usda.gov/Fertilizer/Fertilizer-Prices-by-Region/8bgf-5mdv/about_data

    U.S. Department of Agriculture. (2026). Weekly On-Highway Diesel Fuel Prices. https://agtransport.usda.gov/Fertilizer/Fertilizer-Prices-by-Region/8bgf-5mdv/about_data

    Baker, Hannah. “Resilient Calf Prices, Rising Input Costs, & Relentless Drought.” Southern Ag Today 6(17.2). April 21, 2026. Permalink

  • “More Than a Number”: The Farmer Lender Relationship

    “More Than a Number”: The Farmer Lender Relationship

    Authors: Gracen Briges, Kelli Russell, and Mykel Taylor

    Agricultural lenders play a key role in farm operations. According to the USDA ERS, about 60% of midsize farms and 75% of large farms carry debt, highlighting the importance of the farmer-lender relationship. But how do farmers portray these relationships? We conducted 74 in-depth interviews with 98 farmers and ranchers in four states (Alabama, Kansas, Montana, and North Carolina). Interview participants included midsize and large-scale operations producing a diverse range of crop and livestock products. Participants’ description of their lender relationships tended to fall into three types: trusting and collaborative, strained and tense, and transactional and unstable. Here’s what they told us.

    Trusting and Collaborative Relationships

    Farmers described a wide range of positive relationships and experiences with their lenders, often emphasizing trust. Many characterized their relationships as “good,” “very good,” or even “great.”  In most cases, lenders were described as partners, advisors, and collaborators invested in the farm or ranch operation’s well-being. Farmers emphasized the importance of transparent, open communication, as one farmer explained, “I want them to tell me if I’m being dumb [in] a decision I’m making.” Long-term relationships were common. One producer described his long-term relationship, “I’ve had the same one since I got a checkbook when I was in high school.” Others noted the importance of responsiveness, one farmer noting he could “pick up the phone and call ’em even if it’s after hours at night.” Many reported that they were willing to pay a slightly higher interest rate for a lender with an understanding of agriculture. 

    Strained and Tense Relationships

    Some farmers shared examples of lender interactions that made them feel especially tense or stressed, often related to the bank’s financials being prioritized over understanding the realities of farming. As one farmer explained, “I just know that they’re a salesman. They’re just trying to sell me money,” and another added, “They’re out for themselves.” These situations often created a fear of denial or being judged, especially during financially difficult years. And as one pointed out, sometimes the lending institutions were also part of the stress, not a solution to it, stating, “They came calling for money earlier than I expected.” These negative relationships clearly added management constraints, uncertainty, and increased stress. 

    Transactional and Unstable Relationships 

    Other farmers described relationships that were neither positive nor negative. One farmer stated, “At the end of the day, it’s business strategy – not a relationship.” This group of producers was less concerned with relationships than with interest rates and tended to have minimal interactions with their banks as a strategy. However, drawbacks to this type of non-relationship were often acknowledged. A producer explained, “We switched 10 years ago for better interest rates, and I’ve had three different lenders in those 10 years.” Following the best interest rate led to having to constantly build a working relationship with a new lender. A second group cited lender turnover as the reason for having transactional or transitional relationships with their lender. Frequent personnel changes can leave ranchers and farmers constantly working to build trust with a newly hired lender. One farmer explained, “The problem I’ve had lately is a lot of loan officers are retiring, and it’s kind of making everything chaotic.” Even with capable new lenders, farmers expressed a cautious attitude with short relationships and little understanding of their specific agricultural operation. Regardless of the cause, the lack of long-term familiarity created uncertainty when making farm management decisions. 

    The Bigger Picture

    The experiences of farmers and ranchers we interviewed reveal the importance of the lender relationship in farm management decisions. We learned that trust, communication, and a thorough understanding of agriculture in farmer-rancher/lender relationships are just as important as (if not more than) access to capital for farmers and ranchers. Strong, collaborative relationships can and do reduce uncertainty and help agricultural producers navigate the challenges of short and long-term planning. One farmer summed up her relationship with her lender by stating, “They have treated us unlike any other banking entity. They treated us like people and not numbers.” Other relationships that lack understanding or personal connection can create additional stress, uncertainty, and cautious decision-making. Recognizing these relationship dynamics helps highlight what farmers value most in their lenders.

  • Understanding Workers’ Compensation Requirements for Employers of H-2A Workers

    Understanding Workers’ Compensation Requirements for Employers of H-2A Workers

    Introduction

    Crop and animal production can be an inherently dangerous field, with the Bureau of Labor Statistics estimating, in 2024, over 23,000 nonfatal injuries and approximately 300 fatal injuries associated with the industries. Workers’ compensation is a type of insurance coverage purchased by employers that compensates employees when they get injured while working. State law generally dictates which employers are required to obtain workers’ compensation, with varying requirements across the country. Some states like Alabama, Georgia, and Tennessee exempt employers of farm laborers from the state workers’ compensation requirements. Other states like Maryland and Florida only require some agricultural employers to purchase workers’ compensation policies.

    While the state normally determines which employers are required to purchase workers’ compensation, the federal government has weighed in when employers utilize federal programs like the H-2A visa program. Under the H-2A program, employers are required to purchase workers’ compensation coverage regardless of state law requirements or exemptions. The H-2A program is jointly administered by three federal agencies – U.S. Department of State, U.S. Department of Labor (DOL), and U.S. Citizenship and Immigration Services. The H-2A program is authorized under the Immigration and Nationality Act. 

    H-2A Program

    The H-2A program allows employers to fill temporary seasonal agricultural jobs with foreign workers. To participate in the H-2A program, the job must be seasonal in nature, so jobs typically filled by H-2A workers include planting and harvesting crops and some livestock care and handling. The dairy and poultry industries typically cannot utilize the H-2A program because those are seen as year-round industries. However, there have been efforts in Congress to allow these year-round industries to access the program. 

    The U.S. Department of Agriculture has provided a website that outlines all of the steps and costs associated with participating in the H-2A Program. One of the steps, among many, the employer must complete is filing the Form ETA-790A with the U.S. Department of Labor.  The application form is then sent to the State Workforce Agency to approve or reject. The form requires employers to certify that they “agree to provide workers’ compensation insurance coverage in compliance with State law covering injury and disease arising out of and in the course of the workers’ employment. If the type of employment for which the certification is sought is not covered by or is exempt from the State’s workers’ compensation law, the employer agrees to provide, at no cost to the worker, insurance covering injury and disease arising out of and in the course of the worker’s employment that will provide benefits at least equal to those provided under the State workers’ compensation law for other comparable employment.” So, if a state agricultural exemption applies to the employer but the employer is utilizing workers through the H-2A program, that employer would be required to purchase workers’ compensation or other comparable insurance coverage despite the state law exemption.

    A certifying officer (CO) at DOL and the State Workforce Agency will review the submitted forms and either approve or reject the application. Prior to DOL issuing the temporary agricultural labor certification, under DOL regulations, the “employer must provide the CO with proof of workers’ compensation insurance coverage meeting the requirements [outlined above], including the name of the insurance carrier, the insurance policy number, and proof of insurance for the entire period of employment, or, if appropriate, proof of State law coverage.”[1]

    When an employer has both H-2A workers and domestic workers, workers’ compensation or comparable insurance benefits must be provided to all employees. An employer is prohibited from offering domestic workers less benefits than H-2A workers.[2]

    [1] 20 C.F.R. § 655.122(e) (2026).

    [2] 20 C.F.R. § 655.122(a) (2026).

    Capaldo, Samantha. “Understanding Workers’ Compensation Requirements for Employers of H-2A Workers.” Southern Ag Today 6(16.5). April 17, 2026. Permalink

  • 2026 LRP Participation Given the Expectation of Sustained Cattle Prices

    2026 LRP Participation Given the Expectation of Sustained Cattle Prices

    The Livestock Risk Protection Plan (LRP) provides protection against price declines for feeder cattle, fed cattle, and swine. A Southern Ag Today article from August 2025 (USDA’s Livestock Risk Protection Program Use Keeps Increasing) outlined LRP participation among cattle producers.  The previous article highlighted increased LRP participation following USDA changes to LRP and improvement in market prices for feeder and live cattle.  In terms of number of head of cattle, LRP participation increased 25% from 2023 to 2024 and 21% from 2024 to 2025.  

    LRP policies run on a fiscal year starting July 1 and ending June 30. With less than 3 months to go in the fiscal year 2026, this article serves as an update on LRP participation considering the expectation of sustained (and rising) cattle prices in 2026.  The projected strong price forecast for cattle is driven by historically low cattle inventories and the anticipation of a slow herd rebuilding process, reduced supply of fed cattle for slaughter, and sustained beef demand. 

    The expectation of sustained or higher cattle prices begs the question: do producers continue to utilize (and pay premiums for) LRP to protect against price declines when a price decline seems unlikely?  So far in FY2026, there are 5.93 million head covered by LRP policies compared to 6.03 million at this time in FY2025 – 1.65% fewer head.  It seems cattle producers are on track to utilize LRP for roughly the same number of head as last year, showing producers are willing to spend money on an LRP policy to reduce downside risk and establish a price floor despite the well-supported expectation 2026 will see sustained, and even higher, cattle prices. 

    Stewart, Natalie. “2026 LRP Participation Given the Expectation of Sustained Cattle Prices.” Southern Ag Today 6(16.4). April 16, 2026. Permalink

  • April WASDE Recap

    April WASDE Recap

    The April Edition of the World Agricultural Supply and Demand Estimates (WASDE) from USDA looked much like the March edition. The 2025/26 US ending stocks for corn, soybean, and cotton were unchanged from the March 2026 report. U.S. wheat ending stocks were slightly higher than the previous month. Globally, corn, wheat, and cotton ending stocks increased for the 2025/26 marketing year while soybean stocks decreased slightly. While U.S. supply and demand appear stable, the market reaction is not.

    USDA increased the season average price projections for corn, soybeans, wheat, and cotton as shown in Table 1. 

    Table 1. U.S. Marketing-year weighted average price received by farmers

     Mar 2026
    Projection    		Apr 2026Projection
    Corn$4.10$4.15
    Soybeans$10.20$10.30
    Wheat$4.95$5.00
    Cotton$0.60$0.61
    Source: USDA WASDE April Report.

    The price increase is helpful for U.S. producers with unpriced production. However, the increase in the marketing year average (MYA) price will reduce the USDA’s 2025 Price Loss Coverage (PLC) payments for these crops, as shown in Table 2. 

    Table 2. USDA Projected 2025 PLC Payment Rates 

     Mar 2026
    Projection    		Apr 2026
    Projection    		Change
    Corn (bu)$0.32$0.27-15.6%
    Soybeans (bu)$0.51$0.41-19.6%
    Wheat (bu)$1.40$1.35-3.6%
    Seedcotton (lb)$0.0908$0.0851-6.3%
     Source: USDA Farm Service Agency Table 3. Projected 2025 Price Loss (PLC) Coverage Payment Rate.

    Reduced PLC payments in the fall of 2026 will shrink revenue for producers already struggling with increased input prices. While the PLC payment rates have fallen for these crops, actual payments for the 2025 crop year will be based on the higher of the Agriculture Risk Coverage (ARC) or PLC payment rates.

    The futures market had a mixed response to the April WASDE report (see Table 3). Corn and soybeans prices closed lower on April 13th than the day before WASDE’s release. Cotton prices were higher and wheat was unchanged. 

    Table 3. 2026 Futures Prices

    Source: Barchart

    Producers need to watch cash and futures for marketing opportunities as planting season usually provides the highest prices of the year.

    Mickey, Scott. “April WASDE Recap.” Southern Ag Today 6(16.3). April 15, 2026. Permalink