A grain elevator in Batavia, Iowa. High input costs have farm businesses watching every purchase this fall. Photo: David Wilson, CC BY 2.0, via Wikimedia Commons.
Farmers have not stopped buying land when the right tract comes up, but they have been slower to write the other big checks, and agricultural bankers say fertilizer and diesel are a big reason.
Ernie Goss, director of the Institute for Economic Inquiry at Creighton University, told High Plains Journal this week that most of the bankers he surveys are worried about equipment dealers and farm retailers. Operators are delaying major purchases and cutting spending, he said, because production expenses, “most notably fertilizer and diesel fuel,” are still elevated. Until those costs come back into line with income, he said, farmers will have less appetite for expansion than they did earlier in the decade.
That squeeze is familiar in Wright County, where a late harvest, drying bills and a year of tight planning budgets have already made 2026 a careful year at the parts counter. Iowa State’s crop-cost outlook, which Wright County Extension passed along last winter, started from the assumption that average corn and soybean prices would not cover average production costs. Record yields, if they hold, help the income side. They do not shrink the fertilizer invoice.
Higher interest rates compound the problem. Rabail Chandio, an Iowa State Extension economist, told the Journal that rates put downward pressure on land values through borrowing costs and operating expenses, though the effect can take years to show up in sale prices. She expects stronger crop receipts and government payments this year to offset some of that pressure. Even so, a higher operating note is another fixed cost in a year when the margin was already thin.
Goss said neighboring landowners will still look hard at a farm that comes up for sale, because they may not see it again for decades. The spending they can postpone, he suggested, is the new tractor, the extra tool or the expansion that can wait. For the dealers and co-ops that serve Wright County, that is the quieter financial story of the fall: land holding its value, and the equipment row getting a longer look before anyone signs.
Holly Shafer writes for Clarion News Online.