By Jamie Martin
The US economic outlook for 2026 appears more stable as uncertainty surrounding trade policy continues to decline. Financial markets are showing historically low volatility, signaling increased confidence among investors. Although tariffs remain in place, actual import taxes paid are lower and are expected to fall further as trade agreements progress.
Attention has shifted toward artificial intelligence as a key economic force. Investment in AI and related infrastructure has supported growth and strengthened financial markets. While some worry about excessive investment leading to market corrections, strong earnings and manageable debt levels suggest limited risk. Over the long term, AI is expected to improve efficiency and productivity across the economy.
Economic indicators suggest continued stability. Inflation pressures are easing, the labor market has normalized, and interest rate cuts may continue. These factors support modest economic growth heading into 2026.
"That's one possibility but it's not the most likely scenario," said Rob Fox, vice president of CoBank's Knowledge Exchange. "Corporate earnings remain extremely strong and aggregate corporate debt levels are historically low. Most of the stock market gains in the second half of 2025 were attributable to continually improving earnings expectations, not irrational exuberance."
Agricultural markets present a mixed picture. Grain and oilseed supplies remain abundant, keeping prices low. However, improving exports and increased biofuel demand offer signs of recovery. Farmers face tough planting choices as production costs remain high. Soybeans are expected to gain acreage due to favorable price ratios, while corn planting may decline.
The animal protein sector continues to perform well. Consumer demand for meat and poultry remains strong despite higher prices. Tight livestock supplies and better feed costs are improving producer confidence, though expansion is expected to remain limited.
Dairy markets are increasingly driven by protein. Demand for protein-rich dairy products remains strong, while butterfat markets face oversupply. As a result, milk protein will continue to play a key role in farm revenue.
Challenges persist in food and beverage sectors as restaurants face declining traffic and manufacturers face reformulation pressures. At the same time, rising electricity demand and rapid data-center development are pushing rural communities into the spotlight, creating both opportunities and planning challenges.
Photo Credit: gettyimages-prostock-studio
Categories: National