It was a full house at the 2026 Kansas Commodity Classic on Jan. 30 in Salina, Kan. More than 200 of the state’s corn, soybean, wheat and sorghum farmers gathered to hear from experts on markets, policy and more as they prepare for the coming year.
Tanner Ehmke, lead economist for grains and oilseeds at CoBank, offered an analysis of markets and an update on issues that farmers will likely face in 2026:
Economic and trade uncertainty. Ehmke said trade uncertainty has risen from a combination of aggressive U.S. trade policies, retaliatory measures from trading partners, upcoming trade agreement renegotiations, global geopolitical tensions, and other countries’ efforts to reduce their dependence on U.S.-dominated trade and financial systems.
The on-again, off-again nature of recent trade deals with partners, not to mention the legal challenges to President Donald Trump’s use of tariffs, has led to uncertainty in the agribusiness sector.
“We in agriculture alone have paid in about $1 billion in tariffs,” Ehmke said. “Half of that is on imported machines. About a quarter of that has been on fertilizer, and the other quarter is split between chemicals and seed.”
Other countries are starting to form trade relationships that cut out the U.S. in order to reduce their risk. The European Union, for example, is trying to form a deal with China, as is Canada. This is a global reorganization of trade that hasn’t been seen to this extent before.
“So, irrespective of what the Supreme Court does, they’re probably not going to be out of the woods when it comes to tariffs, which is to say we’re going to have trade uncertainty for at least the next three years,” Ehmke added.
Global economic slowdown. It’s not just the U.S. economy that is slowing, but the global economy is declining too, Ehmke said. A look at the Baltic Dry Index of real-time shipping rates for Panamax vessels shows that rates are dropping. Lower rates mean there is a slowing demand for commodities.
Ehmke said when the economy is doing well, that signals more shipping demand, and prices are therefore higher for ships.
Part of this reduction in demand is due to a population decline globally, but trade uncertainty and fiscal responsibility further compound the problem. As people live longer and have smaller families, that affects the labor market, the economy and consumption.
A weaker dollar. “A weaker dollar tends to be a very good thing for us in agriculture,” Ehmke said. “We depend on exports, and a cheaper dollar makes our exports more affordable overseas and more competitive with countries like Brazil.”
This significant drop in the dollar has been caused by the Federal Reserve cutting interest rates, Ehmke said, with the Fed indicating more cuts going forward, which would mean a cheaper money supply.
When we have fiscal deficits, we issue more debt, Ehmke explained. That puts more pressure on the value of the dollar, and globally, there are several countries that are dumping their U.S. assets and switching to precious metals such as gold and silver.
“The Chinese Central Bank is dumping dollars and buying gold, and they’re not alone,” Ehmke said. “Other central banks around the world are doing the same.”
He told farmers to expect the dollar to continue to weaken based on continued Fed rate cuts, massive fiscal deficits that require debt financing, ongoing trade policy uncertainty, global efforts to reduce dollar dependence and political pressure for that cheaper money to service debt.
Commodity market cycles. Using historical grain price data spanning 160 years, Ehmke suggested the market is at a cyclical bottom. Too many piles of commodities have pulled down prices, he said, but globally, stocks-to-use ratios suggest an eventual demand recovery.
“Usage is going to catch up to supply,” Ehmke said. “It takes some time. It takes a long time to get there. It takes low prices to stimulate more usage.”
Corn saw record exports, up 33%, primarily to Mexico and Japan, as well as increased domestic feed usage because livestock producers are feeding their animals to larger weights. Strong ethanol production and exports also have been a high point for corn, but the big unknown is what will happen with the E15 situation in Congress.
Soybeans lost significant Chinese demand during that critical fall shipping window, Ehmke said. But they’re benefiting from increased biodiesel demand and new crushers coming online.
Wheat saw a strong export performance aided by that weak dollar. However, Ehmke said there are concerns about GLP-1 drugs reducing food consumption — particular flour-based goods.
Ehmke predicted significant shifts in planted acres, with fewer corn and sorghum acres and a touch fewer wheat acres, with many of those acres shifting to soybeans.
“Farmers may say [soybeans are] not necessarily my best option, but it’s my least bad option,” he said.
Overall, Ehmke emphasized that while recovery is expected, it will be modest due to large global supplies that need to be worked through the system.