For grain producers across central Illinois and the Midwest, the last few years have been some of the most challenging in recent memory. Low commodity prices and skyrocketing input costs, combined with ever-changing geopolitical situations, forced producers to make extremely tough decisions to protect their profitability and operation’s financial position. While some operations have successfully navigated these challenges, the high levels of profitability experienced in 2021 and 2022 have become increasingly difficult to achieve. As the 2026 crop year is wrapping up and producers are continuing harvest across central Illinois, the focus has already begun to shift to the 2027 crop and the decisions that need to be made before planting begins this spring. With high fuel and fertilizer prices, a fluctuating commodity market, and an uncertain policy environment, understanding what 2027 might hold can be difficult. However, recent reports and articles from the United States Department of Agriculture (USDA) and the farmdoc team at the University of Illinois provide a glimpse into current economic conditions, as well as where the farm economy can go in 2027. This post examines these reports and what they may mean for producers as they make plans for the 2027 crop year.
2026 Income Forecast
Each year, the USDA Economic Research Service (ERS) publishes a Farm Sector Income Forecast to provide a glimpse into the current economic conditions and challenges facing the agricultural economy. The 2026 forecast was published in early September and offers some interesting insights. Overall cash receipts are expected to be approximately $540 billion in 2026, a decrease of around $18 billion from 2025. While there are expected decreases in livestock and animal receipts, crop receipts are expected to increase in 2026. The report notes that corn receipts are expected to increase by $6.8 billion, and soybean receipts will increase by $4.3 billion. These increases are driven by more corn being sold and higher overall market prices for soybeans. Direct government payments, which do not include USDA loans or crop insurance payments, are expected to increase by around $19.5 billion to nearly $48 billion in 2026. This is led by an increase in payments through one-off supplemental programs and higher payouts in Farm Bill programs (such as ARC, PLC< and conservation programs).
While overall farm receipts are expected to increase for crop producers, the other half of the story indicates that expenses are anticipated to increase to around $493 billion in 2026, which is roughly $21 billion more than in 2025. Fuel and oil are expected to be among the largest increases for crop producers in 2026. These expenses are expected to increase by almost $5 billion to over $20 billion in 2026. Fertilizers, lime, and other related products are also expected to increase in 2026 to nearly $40 billion. Seed costs are projected to remain around the same, while pesticide costs (which include the products and applications) will decrease by roughly $1.4 billion. This data shows that, despite producers likely earning more for their crops in 2026, these revenues are going to be quickly eroded by costs for key inputs such as fuel and fertilizers. While these national figures provide useful context, producers often want to know how these trends translate to their own farms and fields.
2027 Crop Budget Projections
The USDA-ERS data provides a good overview of national farm economic conditions, but it does not provide a clear view of conditions at the regional or state level. Indeed, different parts of the United States can face different challenges and have different advantages. That is where resources such as the farmdoc project from the University of Illinois come into play. Each fall, the farmdoc team releases the first version of the crop budget for the following year. In early September, the crop budgets for Illinois were released for the northern, central, and southern Illinois regions. This section will focus specifically on the budget projections for high-productivity land in central Illinois.
The budget anticipates trendline yields of 245 bushels/acre for corn and 77 bushels/acre for soybeans. Market prices are set at $5.00 per bushel for corn and $12.00 per bushel for soybeans. The budget also assumes some ARC/PLC payments, but these and the market prices are affected by changing market conditions and the marketing plan employed by an operation. Total non-land costs are calculated for both corn and soybean acres by considering direct costs (fertilizers and pesticides), power costs (fuel and machinery depreciation), and overhead costs (labor and insurance). The total non-land costs for growing corn are estimated at $885 per acre, and $534 per acre for soybeans.
When comparing these to the projected gross revenues, the total returns are projected as $357 per acre for corn and $407 per acre for soybeans. These figures do not include land costs, however. Assuming a cash rent of $321 per acre, the overall returns shrink to just $36 per acre for corn and $86 per acre for soybeans. Of course, the increase in fuel and fertilizer costs from the conflict in the Strait of Hormuz and other geopolitical tensions are the primary sources of increased costs. The article also notes that higher crop insurance premiums, higher machinery depreciation, and interest charges will be factors impacting profitability in 2027. While positive returns are certainly welcome after several difficult years, these margins remain relatively narrow. A decline in commodity prices, lower-than-trend yields, or additional cost increases could quickly reduce profitability, particularly for corn production.
2027 Cash Rent Outlook
High quality farmland in central Illinois and in other parts of Illinois remain a key asset for many producers. However, many producers rent the land that they operate, which adds additional costs to their operation. Another farmdoc daily article from September 2026 analyzes trends in cash rents up to 2026, and where cash rents could likely go for 2027. The article notes that USDA data reports the Illinois average cash rent as $261 per acre, down only $3 per acre from 2025. Of the 86 counties in Illinois with reported data, 45 reported decreased average cash rents from 2025. The counties with the five highest averages in Illinois were Macon ($347/acre), Moultrie ($337/acre), Sangamon ($334/acre), Christian ($332/acre), and Mclean ($326/acre).
The article looks to data from the Illinois Society of Professional Farm Managers and Rural Appraisers (ISPFMRA), which conducts a midyear survey of its members to understand where cash rents are headed in the coming year. While this data only represents a small subset of Illinois farmland, it still provides a general idea where cash rents will go in 2027. Data from the survey estimates a decrease of between $3 to $5 per acre in 2027, which the authors note is consistent with decreases since 2024. However, since the survey was conducted prior to the recent increases in commodity prices for corn and soybeans, the likelihood of a decrease is lower. Higher crop prices and increased government payments for the 2025 crop year will likely add upward pressure on cash rents in 2027. The lower-than-average returns as outlined in the projected crop budgets makes the direction of cash rents in 2027 more difficult to project.
The outlook for the 2027 crop year can be described as cautiously optimistic. The recent increase in market prices for corn and soybeans, combined with expected increases in direct government payments, will likely see more revenues for crop producers in central Illinois. However, input costs remain all too high. Higher fuel and fertilizer costs are projected to eat away at profits moving forward. The ongoing conflict in the Strait of Hormuz, increased tariffs on exports and imports, and other geopolitical issues make it more difficult to project what will happen this time next year. The information in this post, however, can provide producers with an opportunity. Creating a realistic budget, developing a disciplined marketing plan, and identifying opportunities to control costs will remain important as producers prepare for the 2027 crop year. While the outlook appears more favorable than it has in recent years, success will still depend on strong management and the ability to adapt to changing economic conditions.