Crop prices are rising, but input costs are rising faster. That is the reading of American Farm Bureau Federation economist John Newton after September's World Agricultural Supply and Demand Estimates — the first field-level look at 2026/27 acres, yields and season-average prices — raised projected revenue per harvested acre for corn to $857, more than $50 above May's estimate, and for soybeans to $634, along with rice, barley and oats, while peanuts, cotton, wheat and sorghum revenue projections fell.

Season-average corn approaching $5 a bushel and soybeans near "beans in the teens" would normally be welcome, Newton writes, but since the Strait of Hormuz closed in early March cost pressure has only intensified, with total production expenses expected to reach nearly $500 billion in 2026. Fertiliser expenses are projected at a record $40 billion, up 15% or $5 billion; fuel, including diesel, at a record $22 billion, up 29% or $5 billion; and interest at a record $34 billion, likely to rise further if the Federal Reserve raises rates again at its coming meeting. Diesel alone is up 45% since spring, and disruptions in the Bab al-Mandeb Strait threaten more.

Using USDA's cost-of-production estimates and the diesel trend, AFBF puts the post-Hormuz cost increase at nearly $30 an acre for corn, $14 for soybeans, $30 for cotton and more than $70 for rice compared with USDA's pre-Hormuz figures.

For crops whose revenue projections fell — cotton, peanuts, wheat and sorghum — the higher costs deepen already forecast losses. For corn and soybeans, higher prices may offset some of the added cost despite possibly lower yields. But absent still higher prices, no major row crop is projected to clear breakeven above total costs in the 2026/27 marketing year — the fourth consecutive year of returns below cost.

"September's WASDE reveals a farm economy caught between improving crop prices and an input cost environment that continues to be subject to inflationary pressures," Newton writes; the gains some crops see are "being significantly eroded by the surge in fertilizer and diesel expenses tied to the Strait of Hormuz closure and Bab al-Mandeb Strait disruptions."

Source: American Farm Bureau Federation