Although grain prices have come down considerably from their highs a few years ago, they have either stabilized or increased slightly in the last year. Current 2026 new-crop Futures prices are around $4.60/bu for corn, $11.20/bu for soybeans (2/17/26). Compared to a year ago, this is a similar price for corn and $.60/bu increase for soybeans (see Figure 1).

Figure 1: November 2026 Soybean Futures (2/17/2026)

Fertilizer prices are up slightly compared to the last two years.  However, fuel prices and most other input prices are largely unchanged.  Thus, the overall cost structure has increased slightly for inputs.  This article will evaluate the overall effect of these and other changes, and estimate the expected profitability for the 2026 crop.

Costs for an efficient western Kentucky grain farm are estimated in Table 1 on soil that averages 175 bushels corn and 56 bushels soybeans per acre.  Machinery and labor costs include depreciation and overhead costs, as well as an opportunity cost for operator labor. Fuel costs are based on $2.90/gallon on-farm diesel and 40 mile one-way trucking to the elevator.  Fertilizer prices are assumed $.52/unit for N, $.70/unit for P, and $.40/unit for K. 

Corn and soybean prices used in this analysis are based on forward contracting prices as of 2/17/26 for an average of fall and winter delivery: $11.20/bu for soybeans and $4.50/bu for corn.  There is also an estimated $30/acre government payment.  Although there is no way to know for sure what government payments would be for the 2026 crop year, the potential for continued ad hoc emergency payment programs and ARC-PLC program payments are relatively high.

Table 2 shows the expected gross return (does not include land rent) given the costs in Table 1 and expected commodity prices and yields. 

The expected gross profit for this productivity soil is $116/acre for corn and $232/acre for soybeans.  Assuming a 50-50 rotation the average gross return would be $174/acre.  Net return would be calculated by subtracting out the land rent.  In western Kentucky, much of the ground with this type of productivity is being rented for $175-225/acre.  As an example, if we use a $200 land rent, the net return (return to management and risk) for a 50-50 rotation would be a $26/acre loss.

Table 3 shows a summary of the estimated gross returns for various soil productivities.  Think of these yields as the long-run expected yields for a particular farm, not year-to-year variability.  Costs are adjusted to account for different expected yields.  The biggest change in costs is for trucking which adjusts on a 1-1 basis, but other costs such as fertilizer are adjusted at a lower rate. Looking at Table 3, it is easy to see how quickly gross profitability changes with expected yield.  Two noteworthy points with the current market conditions: 1) The estimated returns for a 50-50 rotation given for the 2026 crop do not look good, especially without the estimated $30/acre government payment. 2) The returns on soybeans are around $100/acre higher on average compared to corn.  This should have important implications for the 2026 planting season in Kentucky and other states should these relative prices hold into planting season.

Note: Central Kentucky has a higher cost structure due to their use of urea as the primary nitrogen source and longer trucking distances on average to key markets.  Thus, gross returns in this region are likely to be $10-50 per acre lower than those shown in Table 3. 

The base scenario assumed equipment costs have been kept under control resulting in a depreciation/overhead cost of $75/acre for corn and $65/acre for soybeans. It also assumed a moderate use of fertilizer and other inputs.  There are many grain farms that will have a higher structure for one or both of these costs.  Table 4 shows the gross returns adjusted for a $50/acre increased cost structure (can be used for either western or central KY).  Note that even at higher productivity levels, profitability will be challenging here with this cost structure.

The “Bridge Assistance” Program will provide some cushion here.  Technically, it will be for the 2025 crop but payments will be made in 2026.  Current estimates per planted acre (not base-acres) will be $44 for corn, $31 for soybeans, and $39 for wheat.  This year farmers will automatically get the higher payout of the ARC or PLC programs. The ARC program should provide good downside protection this year based on revenue in the counties I have looked at. Thus, government payments will likely be a significant help for grain farmers in 2026.

Greg Halich is an Associate Extension Professor in Farm Management Economics for both cattle and grain production and can be reached at Greg.Halich@uky.edu or 859-257-8841.

Recommended Citation Format:            

Halich, Greg. “Grain Profitability Outlook 2026.” Economics and Policy Update 26:2, Department of Agricultural Economics, University of Kentucky, February 27, 2026.  

Author(s) Contact Information:

Greg Halich | greg.halich@uky.edu