After the post-COVID inflation spike, farmers had to pay higher input costs, then saw prices for their crops tumble. The Federal Reserve’s aggressive rate-hiking campaign to tame inflation burdened farms with more onerous financing terms.

President Donald Trump’s trade war last year hiked tariffs on key metals that raised prices for tractors, combines, harvesters, and parts. China’s retaliation resulted in a virtual boycott on American soybeans, and exports collapsed to just $3 billion in 2025 from a peak of nearly $18 billion in 2022.

The U.S. and China called a ceasefire on their trade war, but soybean growers are expected mark their fourth straight money-losing year in 2026.

Then Trump’s war on Iran this year sent diesel and fertilizer costs soaring. And while the U.S. and Iran have stopping fighting, energy markets aren’t expected to return to normal for months, and fertilizer prices are expected to remain higher than usual into spring 2027. Meanwhile, farm bankruptcies are soaring.

On top of all that, weather forecasters see a rare “Super El Niño” forming that could devastate the farm economy even more.

AccuWeather warned on Friday that conditions are in place for a multi-year drought that could threaten crop yields and the water supply. Previous Super El Niño instances resulted dry conditions in the Plains states for two to threes years afterward, it added.  

“If the long-term drought is as bad as it could be, and you are starting off already with severe drought, this raises the real possibility of a ‘mini-Dust Bowl,'” AccuWeather founder and Executive Chair Joel Myers said in a statement.

“Soybeans will be stressed further in the months and years ahead, and yields on some of these crops will be reduced in parts of the country. If that happens, it will have a negative impact on food production, leading to price inflation. Furthermore, water supplies will be harmed, as well.”

While El Niño often delivers above-average rainfall in the southern U.S., drought is common in northern areas of the nation. 

And with the Plains already suffering from extreme drought, El Niño perpetuates those conditions. Very dry weather tends to lead to higher temperatures, which causes more evaporation that intensifies the drought—leading to even drier conditions, Myers explained.

The prospect of even a mini-Dust Bowl is alarming as the original disaster during the Great Depression sent dust clouds across rural America, wiping out entire communities and triggering mass migration to other parts of the country.

“We are not predicting a Dust Bowl, which was disastrous during the 1930s, to occur now because there were poor farming practices back then and other things that we do better today,” Myers added. “But we are taking the situation we are experiencing today very seriously.”

To be sure, a Super El Niño would also affect other agricultural markets around the world. Parts of South America could see drier and wetter seasons, though soybean and wheat yields have typically increased in South America during El Niño.

That could spell more trouble for U.S. farmers as larger harvests in South America have sent soybean prices down by a third from 2022 levels.

The price spike from the Iran war could also force the Federal Reserve to raise interest rates again, making financing more costly. According to the Kansas City Fed, farmers with loans in excess of $100,000 already face interest rates of nearly 7%, more than double the rate from four years ago.

The Trump administration has stepped up support for farmers, just as it did when the president waged a trade war against China in his first term.

Last year’s One Big Beautiful Bill Act included about $66 billion in agriculture-focused spending. The vast majority, about $59 billion, is earmarked for farm safety-net enhancements.

But bankruptcies are still on the rise. Chapter 12 family farm bankruptcies jumped by 46% in 2025 to 315 filings, marking the second consecutive year of increases. 

And in just the first four months of 2026, at least 158 Chapter 12 bankruptcies had already been filed. April alone saw 62 filings, up 130% from the same month a year ago.