Agricultural economists contend that today, the U.S. agricultural economy is being affected by high input costs, growing farm debt that is approaching historical highs of nearly $620 billion, and farm income that is likely to be about $153.4 billion. That’s about $1.6 billion less than in 2025. While overall food and agriculture sectors continue to be huge economic drivers, individual producers are facing narrowing financial margins. Although most farmers and ranchers are eternal optimists, a recent Farm Journal Ag Economy Monthly Monitor Poll found that economists expect that both borrowing costs and crop input costs will continue to increase heading into 2027.
Colorado’s Rural Mainstreet Index, which is a monthly economic survey of bank CEOs in rural areas across Colorado that are dependent on agriculture or energy. The report points out that Colorado’s economy fell from June’s 52.3 to 41.5. in July. A score of 50 is considered growth neutral.The state’s farm and ranch land price index declined to 52.3 from 54.9 in June. According to the USDA, Colorado’s top five exported agricultural products that include beef, pork, corn, dairy and soybeans decreased by 10.2% for the first two fiscal quarters of 2026, compared to the same period in 2025.
Drought has hit Colorado and Wyoming ag producers hard this summer, with about 75% of pastures in those states classified as very-poor-to-poor, while only 2% to 3% of pastures are considered good to excellent. New Mexico is also dry, with 70% of pastures and ranges in the very-poor-to-poor category, and only 5% are considered good to excellent.
Drought continues to haunt Colorado River water users. In the 1922 Colorado River Compact, the upper and lower river basins were each granted 7.5 million acre-feet of water a year, based on the average inflows of 18 million acre-feet from 1906-1921. A recent Bureau of Reclamation news release reported that river inflows from 2000 to 2024 have only averaged 12.9 million acre-feet and the unregulated inflow into Lake Powell this year as of July is estimated to be only 3.5 million acre-feet. During the same time period, the agency reported that around 13.1 million acre-feet of water were consumed each year, with the Lower Basin consuming approximately 49% of the consumption, while the Upper Basin used around 29%, Mexico used about 11%, and another eleven percent of the Colorado River water is estimated to be lost due to evaporation annually.
Some interesting data from the USDA Economic Research Service points out that farmers receive 18.5 cents from each dollar that consumers spend on food consumed at home, but farmers receive only 7.1 cents from each dollar that consumers spend on food they consume away from home. The moral of this story is that if consumers want to help farmers, and themselves, they should consider purchasing food at a grocery store, and prepare it at home.
William Shakespeare wrote, "How far that little candle throws his beams! So shines a good deed in a naughty world."
