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The NDSU Extension weekly podcast In the Pod: Soybean Updates delivers timely insights and expert advice on soybean production.
You're listening to In The Pod, soybean updates, a weekly trek into the latest soybean information from NDSU Extension. It was a rough fall for many farmers with market prices down and production costs up. Here with a peek into the economic outlook for 2026 is Bryon Parman, NDSU agricultural finance specialist. Bryon, from a financial standpoint, how's agriculture looking?
Bryon Parman:This year, the outlook for 2026 is pretty tough. Margins looking pretty tight, mainly because we haven't seen really any decline in production costs in the last few years. In fact, we've seen some increases depending on whether you're talking about herbicides, pesticides, fertilizers, things like that increasing to different degrees. While at the same time, you know, commodity prices have been lower relative to where they were, say, in 2022 when these input costs went to near where they are now. They did come down some, but they're not off their peaks that far, and our commodity prices just haven't rebounded in the last few growing seasons. So things have remained tight. They were tight last year. They're looking that way headed into this year. We're gonna have to have some sharp pencils this year as we're doing our budgeting and and accounting to make sure that we're as efficient and as, cost effective as we can be.
Bruce Sundeen:With some of those price increases, can you be more specific?
Bryon Parman:Sure. So we've seen increases in fertilizer prices this year compared to a year ago, specifically nitrogen fertilizer, which I know we're talking specifically about soybeans, and so nitrogen's not as big a deal. But we've seen phosphorus prices are significantly higher than they were a year ago as well as potash prices, being higher as well. Other costs such as seed and herbicides are up one to 2%, basically, the rate of inflation for the most part. But nonetheless, that doesn't make things any easier when we haven't seen a likewise increase in commodity prices. And then a lot of our other costs overhead and everything else, basically, not big increases, but when margins were already thin to begin with, any increase at all is noticeable.
Bruce Sundeen:Is there any way to predict changes in any of this?
Bryon Parman:Not so much in the short run. You know, this growing season is probably what we see now is what we're gonna get. Certainly on the cost side, that's a lot more predictable than what, say, harvest prices are gonna be cash prices for soybeans next fall. There's a long time and a lot of growing season and planting season and everything between now and then. But on the production cost side, we're pretty confident with what the prices are gonna be because, obviously, that's a lot more near term. You know, the weather in Brazil or in Midwest Of The US isn't going to impact that as much before they already have to be paid. On the cost side of things, we're fairly certain where these increases are gonna be and for the most part, how much.
Bruce Sundeen:With tariffs, trade issues, can any of this get better or even worse?
Bryon Parman:Yes to both. It could get worse and it could get better. Until something's firm, until something's in place and in writing or made law that we can actually read into it, it's really hard to say which way things could go. That's kinda what it all boils down to. We're still basically in a wait and see mode. Our costs on the cost side, are they gonna continue to go up? Maybe there's a trade agreement reached. We see some of these costs go down, especially, like, on the herbicide and chemical side of things or the fertilizer side of things. It's certainly possible. But right now, there's nothing that I can anchor to to say that it's going to happen.
Bruce Sundeen:Bryon, what might be a positive thing looking down the road?
Bryon Parman:As opposed to other cycles with tight margins, farmers' balance sheets are actually in a fairly good place. I know there's been a lot of concern about credit denials and things like that because we've got some producers who've had a couple of tough years and really not turned a profit. But the equity position of a lot of our farmers has really created a scenario where there's some financial movements that can be made to allow our producers to continue to operate certainly for this year, perhaps another one with these thin margins, continuing. I certainly hope not. I certainly would hope we don't have to find out heading into 2027 what another tight year looks like. But right now, I think that we're in a an alright place. No one's gonna say good, but okay in the sense that I think that with the equity that farmers have built up and some of the working capital we've got, we'll be able to operate next year without too many folks being denied any kind of credit or anything. So that is the positive of it that there's some flexibility among our producers to hopefully weather this a bit longer.
Bruce Sundeen:Thanks, Bryon. Our guest has been Bryon Parman, NDSU agricultural finance specialist. You're listening to In The Pod, soybean updates, a weekly trek into the latest soybean information from NDSU Extension supported by the North Dakota Soybean Council.