Eastern Washington farmers, who face a double-gut punch of higher costs and low prices for wheat, could force career-altering decisions soon if economic forces don’t change, an agriculture economist told them Wednesday.
Eric Jessup, the director of the Freight Policy Transportation Institute at Washington State University, provided the economic outlook as part of the 2026 Spokane Ag Expo and Farm Forum that will continue through Thursday at the Spokane Convention Center.
“I would say we don’t want to have too many more years like this last year,” Jessup told the crowd. “I’m talking like across the whole country. Two or three more years of net returns to farmers like we’ve had this past year and I would expect those bankruptcy numbers to take off.”
Jessup this year took over the economic forecast that for decades had been delivered by Randy Fortenbery, an agricultural economics professor at WSU. Fortenbery has begun to reduce his commitments as he plans to retire this May.
Jessup used two slide presentations to explain the current predicament.
One bar chart showed the average price farmers received for a wide variety of crops in the U.S., including peanuts and wheat. Each chart had a red dot above it showing how much it costs farmers to grow those crops. Every commodity was selling below the cost to produce it.
Secondly, Jessup showed a chart that displayed a rising line that tracked farmers’ non-real estate debt for expenses like equipment, and a second even-higher rising value showing debt tied to farmland or property.
Juxtaposed with the two levels of rising debt was a red line showing plummeting returns over the last two years for income farmers received for their crops.
“If I look overall at the U.S. farm economy, I think our farmers have taken a big hit this year,” Jessup said. “Of course, most of that was self-inflicted, not all of it though, but the tariffs did not help.
“The tariffs” put in place earlier last year by President Donald Trump “only exaggerated something that was already kind of taking place.”
Jessup said he was old enough to remember the farm crisis in the 1980s, which he said was caused by another self-inflicted situation when President Jimmy Carter decided to institute an oil embargo on Iran in 1979 in response to the seizure of the U.S. Embassy in Tehran.
At the time, just as now, farmers had several good years that put them on a solid financial footing regarding their debt compared to their land values.
“What happened with the oil embargo? It meant a country that had been a primary destination for most of our corn and some of our soybean exports, Russia or the Soviet Union at the time, stopped buying it,” Jessup said. “When they stopped buying it, those prices went through the floor.”
The current market forces are occurring with China, which stopped buying soybeans and other commodities, in response to tariffs put in place by Trump.
“So this is what’s happening right now,” he said. “The last time the chart showed such a diverging rise in debt and fall in prices came from the massive farm crash of the 1980s, when thousands of farmers lost their operations as bankruptcies undercut land values.”
The crash, if one occurs, won’t be immediate. But Jessup said Trump’s tariffs could have lasting effects for farmers who spent years developing international markets for U.S.-grown crops.
“The full consequences, in my mind, are long term. Not so much what just happened this past year, but like how it affects our potential to get into those markets from here on out,” he said.
Trump announced in December that his administration would spend $12 billion to bail out U.S. farmers who have suffered the fallout from tariffs, including wheat growers in the Northwest.
But Jessup said that most estimates put that tariff impact to farmers at about $48 billion to $50 billion.
“And that’s just for this past year,” he said. “Essentially, when you take a $12 billion Band-Aid to try to fix a $50 billion impact … there’s going to be more hurt than there is Band-Aid.”
Jessup made clear that he’s not predicting a farm crisis, but the elements are there, especially if farmers continue to get loans against their property values to stay afloat.
“As long as farmers can make money off the land … the demand for that land will always be high,” he said.
But if farmers face several years of losing money and they begin to file for bankruptcy, “well now the value of that land is going to start dropping,” he said.
“That’s a tipping point,” Jessup said. “We’re not quite there yet, but I would say if we have three more years like we’ve had the last two years … the bottom’s going to fall out of it.”
