Bear Brief, 29 June 2026

Last spring, commodity prices moved the wrong way, with corn futures dropping more than 10% and wheat giving up more than 15% on top of its production being projected at a 50-year low.

In fact, the numbers are ugly across the board.

The USDA projects 2026 net farm income 24% lower than 2022 and still slipping, while production expenses hit $473 billion in 2025 and are still climbing.

The Farm Bureau's economist Faith Parham said, quote, rising input expenses are no longer a temporary challenge, but a persistent reality facing farmers across the country, end quote.

Corn cost $952 per acre to grow in 2027, and soybeans cost $701 per acre.

Now heading into the fall harvest for 2026, soybean growers are facing down their fourth consecutive year of losses, indicating a more structural collapse.

Part of that is exports to China used to be a significant market and are no longer because there have been efforts by both the United States and China to decouple our economies in anticipation of World War III colloquially, which we're arguably already in and have been since February 24th, 2022, possibly earlier.

Yeah, Ukraine, Russia, United States, China, proxy wars in Iran and elsewhere.

But we've lost not the entirety of the Chinese market, but a significant portion of.

And they've lost absolutely not the entirety of the United States market, but a fair portion of.

While both of our economies circle the drain of race to the bottom.

And that's both an economic and a military assessment.

Following rounds of tariff escalation with China, U.S. soybean exports collapsed from nearly $18 billion down to $3 billion.

But then the Gay of Hummus closed the Strait of Hormuz.

That choked off about 30% of globally traded fertilizer, spiking fertilizer costs 9-13% across major crops, plus the fuel to run the farm equipment also jumped somewhere between 33-41% per gallon.

Those impacts aren't easily swallowed by farmers, as shown in the Farm Bureau survey of 5,700 farmers.

5,700 farmers.

That found 70% couldn't afford all the fertilizer they needed this season.

Overall, it's expected that just corn growers alone have planted several million fewer acres than they did in 2025.

The USDA does not project fuel and fertilizer costs will drop in 2027 as the Strait normalizes.

But that projection I'm sorry.

Let me read that again.

The USDA does project fuel and fertilizer costs will drop in 2027 as the Strait normalizes.

But that projection assumes normalization actually happens, and even then 2027 cost estimates, which is, what, five months away? Cost estimates hit records anyway, driven by seed chemicals, repairs, labor machinery, and cash rental costs.

This is predominantly focused on large-scale monocropping agriculture.