CoBank releases 2026 year ahead report – forces that will shape the US rural economy

What we drew from this source

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• Milk protein is poised for an extended bull-market run as demand for protein-based dairy products continues to climb

  80% confidence

• Economic uncertainty surrounding U.S. trade policy is much lower than it was a year ago, steadying the broader outlook for 2026

  80% confidence

• Global grain and oilseed markets remain oversupplied, but increased biofuels production and improving export conditions are boosting optimism that prices have passed their cyclical bottoms

  80% confidence

• The accelerated depreciation provisions in the One Big Beautiful Bill Act will boost GDP growth by almost a full percentage point next year

  80% confidence

• Current price ratios indicate soybeans stand to pull acres from all major crops in 2026

  80% confidence

• Over the next three to five years, AI will likely play out similarly to the oil and gas shale boom between 2010 and 2015 – overproduction of a commoditized product, lower than expected earnings and disappointing industry profit margins

  80% confidence

• With the year-on-year tariff inflationary effect fading by end of the first quarter, core inflation is likely to resume its downward trend in the second half of the year

  80% confidence

• Just as the overall economy benefited from lower oil and gas prices, we will see productivity gains from AI across the entire economy. As long as the majority of AI capital expenditures are from existing cash flow rather than debt, structural risk to the economy should be limited

  80% confidence

• Rejecting data center projects could mean missing out on generational economic benefits for rural communities

  80% confidence

• Hyperscalers will increasingly depend on rural America to achieve their ambitious buildout plans as rural areas offer land for sprawling campuses and ability to colocate data centers with major power infrastructure

  80% confidence

• 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

  80% confidence

• Direct investments in AI and related infrastructure, combined with the wealth effects from the surging stock market, have conservatively added 1% to U.S. GDP this year

  80% confidence

• That's one possibility but it's not the most likely scenario regarding an AI-driven stock market bubble causing a recession

  80% confidence

• The effective across-the-board tariff rate is now about 17% but based on tax collections, the actual average import tax paid is only about 10%, expected to drop even further as reduced tariffs on China and imported food products take effect

  80% confidence

• Protein will be the leading driver in milk checks in the coming years due to butterfat oversupply

  80% confidence

• U.S. electricity consumption is increasing at its fastest pace since World War II

  80% confidence

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