Three Key Agribusiness Trends

Author: Barry Benson, Head of Agribusiness Banking

Agriculture is always evolving, influenced by a combination of economic forces, supply and demand cycles, and new technologies. As Head of Agribusiness Banking at FNBO, I closely watch for agribusiness trends that are making the biggest impact on the industry today. From record-high cattle prices to the effects of inflation and the rise of precision agriculture, here are three key factors affecting agribusiness right now.

Cattle Prices Are at an All-Time High Due to Supply Constraints and Resilient Demand

If you’ve noticed beef prices climbing at the grocery store, you’re not alone. The U.S. cattle market is experiencing historically high prices for cattle, largely due to a significant reduction in the size of cow herds. Stressed market conditions three to five years ago, coupled with prolonged drought conditions, have led to fewer cows producing a calf each year. This smaller calf crop means a smaller amount of beef to market, making cattle more expensive and beef in grocery stores and restaurants more expensive.

During the pandemic, processing plants reduced capacity, causing a temporary drop in fat cattle prices. But once the market rebounded, consumer demand for high-quality beef — particularly prime and upper-choice cuts — increased. Many consumers who learned to cook steaks at home during lockdowns continued that habit, fueling demand even as restaurant dining returned to normal.

At the same time, many ranchers reduced herd sizes due to financial losses and drought-related challenges. Since cattle production operates on a long cycle, taking nearly two years from birth to harvest, supply has not yet caught up with demand. While some producers are beginning to rebuild their herds, the process is slow. Until cow numbers increase significantly, beef prices are likely to remain high.

Inflation, Interest Rates, and Tariffs Are Impacting Agribusiness Costs

Beyond supply and demand issues, broader economic factors are also shaping agribusiness today. Inflation and interest rates remain a concern for producers, affecting everything from operating loans to input costs like feed, fertilizer and equipment.

While interest rates were expected to decline this year, economic uncertainty, exacerbated by factors like trade policies and tariffs, has made the outlook less clear. Tariffs on key agricultural inputs, including fertilizers and chemicals, can drive up production costs, putting additional strain on producers already facing tight margins. The impact of tariffs isn’t just domestic; much of U.S. agriculture relies on exports, meaning that shifting trade policies can affect international demand for products produced in the United States as well.

To navigate these financial pressures, agribusinesses are looking for ways to mitigate risk, whether through forward contracting, hedging strategies or locking in prices where possible. Staying informed and adaptable are key in an environment where economic conditions can shift quickly.

Technology Is Transforming Agriculture, from Cattle to Crops

Technology continues to revolutionize agribusiness, and data-driven decision-making is becoming a game-changer across both livestock and crop production. From AI-powered tracking in dairy operations to precision agriculture techniques in row cropping, farmers and ranchers are finding new ways to optimize efficiency and reduce costs.

In the dairy and beef industries, advancements in artificial insemination and genetic selection are helping producers maximize herd productivity. For example, many dairies are now using heifer-sexed semen to selectively breed their best cows for future milk production while using beef genetics on lower-performing cows to create a higher-value beef calf. With fat cattle prices hitting record highs, the market for these beef-on-dairy calves has soared, with prices increasing from $0-$250 per calf in past years to over $850 today.

On the row crop side, precision agriculture is changing the game by allowing farmers to make more targeted decisions about where and how to apply inputs like water, fertilizer and seed. Through soil sampling and GPS-based planting systems, farmers can adjust applications in real-time, placing the right amount of fertilizer exactly where it’s needed. This not only could improve yields but also reduce costs.

Looking Ahead: The Future of Agribusiness

Agriculture has always been cyclical, and while challenges like rising costs and supply constraints persist, there are also incredible opportunities for those who embrace innovation. The key to success in today’s agribusiness landscape is adaptability — whether that means adopting new technology, adjusting herd management strategies or finding creative ways to manage financial risk.

At FNBO, we understand the unique challenges and opportunities that agribusinesses face. As a family-owned bank with deep roots in agriculture, we take a long-view approach to supporting our customers. We know that making a living in agriculture isn’t just a business, it’s a way of life, and we’re here to help producers navigate the ups and downs of the industry with trusted expertise and personalized financial solutions.

If you’re looking for insights on managing risk, growing your operation, or financing your next big move, our team is here to help. Reach out to us to learn more about how FNBO supports agribusinesses across the Midwest and beyond.

About the Author

Raised in Newman Grove, Nebraska, Barry was active on his family’s farm, raising cattle, pigs, corn, and soybeans. He has been with FNBO since November of 1999 when he was hired as a Commercial Lender/Business Banker.