Listen: Nebraska FARMcast
Brad Lubben breaks down the five risks producers are managing this year, from tight crop margins to the hidden cost of record cattle prices. Find this episode on your favorite platform here.
This Policy Report Column was first published by Nebraska Farmer on July 30, 2026, and is excerpted here with permission.
The agricultural economy in 2026 has been described as a tale of two farms — or more specifically, a farm and a ranch — as the economic prospects for the crop and livestock sector have diverged.
Crop producers have faced lower prices and higher input costs over the past four years, putting significant pressure on margins, profitability and cash flow. Only the dramatic rise in government payments from commodity programs and emergency assistance in recent years has helped to soften the blow.
In contrast, livestock producers — at least cattle producers — have enjoyed record prices and profitability over the past few years amid the high-price and low-inventory phase of the cattle cycle.
But they, too, have faced significant challenges, including drought and wildfires, and face even bigger decisions going forward about rebuilding the cattle herd and whether to reinvest in the operation.
Larger than life
The challenges producers have faced this year seem almost larger than life, yet they are all part of the broader range of risks and decisions that producers have faced year in and year out. It is not only about managing today’s risks and decisions, but it is also about managing the full range of production, marketing, financial, legal and human risks.
Crop and livestock producers have both had to manage production risk, with drought concerns affecting grazing capacity and crop prospects for the year. Making sound risk management decisions about crop production, grazing capacity, insurance and more are critical to success and viability for the year.
Marketing decisions have been tough as well, with the challenges of knowing how much production to market, what marketing price goals to seek, or what marketing channels to pursue.
Managing marketing risk also involves integrating those marketing decisions with production and financial decisions to effectively manage the bottom line.
High financial risk
Financial concerns have been heightened this year. Tighter margins in the crop sector have put pressure on cash flow and working capital and have added stress to producers that are already managing leveraged or growing operations with less liquidity or equity.
Effectively managing financial risk depends on good records, cost-of-production analysis, and financial statements and analysis to make informed decisions and position an operation for financial stability and viability.
