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One of the great challenges in predicting the performance of the rural economy is the fact that it is configured so differently from the rest of the economy in the United States. America’s urban economy is almost 10 times the size of its rural counterpart. In addition, many key drivers of rural GDP—sectors like agriculture, manufacturing, extraction and utilities—are small contributors to the economic output in urban areas. Finally, official sources of information about rural economic performance are much scarcer than for the U.S. economy as a whole.
For that reason, CoBank’s Knowledge Exchange Division publishes this report each year focused on key trends in the sectors we finance. CoBank is one of the largest providers of credit to rural America, and the industries we serve (agribusiness, power, water and broadband communications) form the backbone of the rural economy in all 50 states. Our exceptional team of economists and industry analysts closely follow all of these industries and have once again provided their thoughtful views about the trends that will shape and drive the rural economy in 2026.
Source: SSTI; U.S. Commerce Department
From my vantage point as CEO of CoBank, I am most concerned about a couple of macro trends in rural America right now. First is the downturn we’ve seen in the crop sector, and whether that downturn is structural or cyclical. I personally worry it is structural, for the following reasons:
The long-term demand destruction for ag exports that we’ve seen in China and other foreign markets due to tariffs and other policy headwinds;
The rise of Brazil as a peer competitor for grain production, particularly soybeans and corn;
The lack of clear new sources of future demand growth for these U.S. crops either domestically or internationally; and
Continuing budget deficits that will make it increasingly difficult for the federal government to support American farmers with assistance.
Source: USDA; CoBank analysis
Counterbalancing these headwinds is the proven resilience of American farmers and their long and successful track record of innovation and adaptation. CoBank and our institutional partners across the Farm Credit System will continue to support producers and other agricultural borrowers with reliable credit and financial services and help to sustain them no matter what occurs in the coming period.
The other trend I am focused on is the nation’s electricity infrastructure and its ability to handle the significant acceleration of demand growth from data centers and reshoring of manufacturing. Between 2020 and 2023, electricity usage was basically flat despite significant growth in the size of the U.S. economy, due to increased energy efficiency as well as lower overall power intensity in the economy. Now demand for electrical power is surging. Utilities, including electric cooperatives serving rural areas around the country, will continue to face new opportunities and challenges in supplying this demand.
Source: U.S. Energy Information Administration
Finally, federal policy uncertainty remains a key issue for rural industries. The Farm Bill is the single most important policy platform for rural America and American agriculture, serving as a vital safety net for an industry that feeds the world and that undergirds our national security. The current version of the Farm Bill dates to 2018. Though it has been extended through September 2026, it would be far better for Congress to reauthorize a new five-year Farm Bill that incorporates current marketplace conditions for agriculture, which have changed a great deal over the past several years. It is impossible to overstate the importance of this legislation to the well-being of farmers and rural communities.
Whatever transpires in 2026, our customers can rest assured that CoBank will stand by them to fulfill their needs for dependable credit and financial services. Our customers will continue to feed people, generate and distribute power, deliver clean water and provide vital connectivity to rural communities. It is a privilege for us to support them as they carry on that vital work.
Disclaimer: The information provided in this report is not intended to be investment, tax, or legal advice and should not be relied upon by recipients for such purposes. The information contained in this report has been compiled from what CoBank regards as reliable sources. However, CoBank does not make any representation or warranty regarding the content, and disclaims any responsibility for the information, materials, third-party opinions, and data included in this report. In no event will CoBank be liable for any decision made or actions taken by any person or persons relying on the information contained in this report.
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