As reported in the latest Ag Economists’ Monthly monitor, nearly all economists foresee continued or accelerated consolidation in agriculture into 2026. The respondents warn of:
- Businesses of greater scale and reduced rural populations.
One economist says there will likely be “fewer larger farms and fewer larger crop service centers who provide farmers with supplies.” - Mounting obstacles for some segments of farmers.
Another economist anticipates “higher barriers to entry for young and beginning farmers. Dwindling political support for agriculture.” - Loss of political and economic diversity in rural America.
“Larger operations will get larger, and we’ll lose some of the diversity that smaller producers bring to the industry.” - Potential efficiency gains but worsening rural socioeconomic divides.
“The continuation or acceleration of trends toward fewer prosperous rural communities” could result from consolidation in agriculture, says an economist.
Shrinking Pool of Farmers Grow in Scale
Bill Lapp, founder and president of Advanced Economic Solutions, points to a steady trend of consolidation in agriculture.
“We used to have a lot more farmers. Today the same acreage is being farmed by fewer producers who are farming a larger scale of acres,” he says.
In the face of margin pressure, Lapp says consolidation accelerates when it comes to farmers who are:
- ready to retire
- voluntarily stopping farming
- being forced out of farming after multiple years of financial stress
While there is an average rate of farmer retirements every year, Michael Langemeier, ag economist at Purdue University, says hard economic conditions spur many to consider it earlier than normal.
“You do see an uptick in farm retirements when you have low margins like this. We saw that back in the 2014 to 2019 period,” Langemeier says. “We had some really good years in 2021, 2022 and 2023, and quite frankly, if you’re at retirement age, it’s just not as fun to farm when you have extremely low margins. We’ll have an uptick of retirements during 2025/2026.”
As for the geographic areas most prone to consolidation, Arlan Suderman, chief commodities economist for StoneX Group Inc., points to the Plains and Mid-South, which persistently carry the tightest margins for production.
Highlighting the obvious but also an area of caution, when farmers retire, owned land and rented acres become available to the market, Suderman says.
“The mistake we are making is the over enthusiasm of outbidding the other farmer down the road for cash rents,” he adds. “That will eventually result in pain. In the moment, they aren’t paying attention the economic reality.”
He says this is particularly noticeable with younger farmers who might be eager to grow the size of the operation.
“We have a whole generation who only knew good prices and low interest rates. Now prices are low, interest rates are elevated and input prices are high,” Suderman says.
Cash rents provide a frontline perspective to potential economic downfall.
“The painful reality is we may not fix the land rent issue until farmers say ‘no.’ That’s an emotionally difficult thing for them to do, especially if the farmer down the road is willing to do it. It’s a painful part of the cycle, and it’s probably required,” Suderman says.
Ag Retail Sector Faces Changes
Lapp says he’s also watching the farmer-adjacent businesses — those who provide products and services.
“This financial stress carries into the suppliers, grain elevators, co-ops and ag banks,” he says.
Brad Oelmann, a consultant in the ag retail business, says he foresees continued consolidation in the ag retail space, perhaps slightly higher than normal.
“I don’t think it’s always economy-related,” he says “It starts with succession planning, costs to implement technology and managing risks with higher input costs. Those are the primary drivers right now.”
Regarding the consolidation of ag retail locations, Oelmann says labor availability has accelerated that trend.
In the near future, if there is a segment in the retail industry that could face more consolidation, he points to smaller to medium-sized businesses, and perhaps cooperatives more so than the independents.