BARN TALK
The Unfiltered Voice of Rural America
Weekly Newsletter · Issue #009 · May 27, 2026
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Hey folks, the USDA just projected the smallest U.S. wheat crop since 1972, John Deere reported a 39% operating profit decline in its large ag business and guided demand down 15 to 20 percent for the year, and HPAI is back in dairy herds after a months-long break. It's a lot to chew on this week.
This Week
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Plains drought triggers USDA’s smallest U.S. wheat crop forecast since 1972
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John Deere Q2: large ag operating profits down 39%, full-year demand guided down 15-20%
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House passes year-round E15 fuel sales 218-203, Senate path uncertain
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Beyond Meat hits $0.75 a share as Q1 revenue falls another 15%
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HPAI confirmed in five Idaho dairy herds, poultry hit in North Carolina and California
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USDA PROJECTS SMALLEST U.S. WHEAT HARVEST SINCE 1972
The USDA dropped its May World Agricultural Supply and Demand Estimates on May 12, and the wheat number stopped trading floors cold. U.S. wheat production for the 2026/27 marketing year came in at 1.561 billion bushels, the lowest projection since 1972/73 and 423 million bushels below last year’s production. Chicago wheat futures went limit up on the day. The cause is a Plains drought that has pushed hard red winter wheat conditions to the lowest good-to-excellent rating in four years, with no meaningful relief in the forecast.
Where the Damage Is
Hard red winter wheat, the variety grown across Kansas, Oklahoma, Nebraska, and the Southern Plains, took the brunt of the drought. USDA rated just 28% of U.S. winter wheat in good-to-excellent condition in its most recent weekly crop report. That’s the lowest rating for this point in the growing season in four years. The Plains drought deepened through spring, cutting production estimates far below what even pessimistic trade forecasts had expected. The final number could still go lower if conditions don’t improve before harvest gets underway.
What It Means for the Market
Wheat futures surged on the May 12 announcement, with Chicago Board of Trade wheat going limit up by the full 45-cent daily maximum. By the close of this week, July wheat futures were holding around $6.48 per bushel, roughly 8 cents above where they settled the prior week. For producers who still have winter wheat in the ground, the price signal is welcome news after a rough stretch. For the buyers on the other side, whether that’s flour millers, export customers, or livestock operations that run wheat in their rations, the tightest U.S. crop in fifty years means higher input costs and tighter margins across the supply chain.
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From the Barn
The USDA barely moved the corn number in the May report. Took a little off and called it good. Wheat is a completely different conversation. When the agency says the Plains drought is cutting hard red winter production by 25%, and only 28% of the crop is in good-to-excellent condition, that forecast has more room to go lower before harvest. Anybody in wheat country watching their fields right now already knows that.
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DEERE'S Q2 SAID WHAT THE EQUIPMENT LOT IS ALREADY TELLING YOU
John Deere reported Q2 2026 earnings on May 21. The headline EPS of $6.55 beat estimates by $0.68, so the stock held up. But inside the report is the number that matters for the people actually buying and financing farm equipment. Deere’s Production and Precision Agriculture segment, the division that makes the large tractors and combines that go into corn and soybean country, saw net sales fall from $5.23 billion to $4.50 billion. Operating profits in that segment dropped 39% year over year.
Management guided full-year fiscal 2026 Large Ag equipment demand in the U.S. and Canada down 15 to 20 percent from last year. Net income for the full year is expected to come in between $4.5 and $5 billion, which would be a significant step down from recent peaks. The financial services arm and the smaller segments, small ag, turf, construction, held up well enough to produce an EPS beat. The large farm equipment business is a different story.
Three Things to Know
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Production and Precision Ag operating profits fell 39% year over year. That segment covers the large equipment that matters most to row crop farmers.
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Large Ag demand in U.S. and Canada guided down 15 to 20 percent for fiscal 2026. CNH, Deere’s primary competitor, told investors not to expect recovery until 2027.
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CEO John May is still calling 2026 the cycle bottom, with recovery and accelerated growth ahead. The guidance has been cut multiple times during this downcycle.
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What It Actually Means
The EPS beat came from financial services and segments that have nothing to do with a corn farmer buying a new combine. The part of Deere that farmers actually interact with, the production ag division, posted a 39% operating profit decline. That signals demand at the dealer level is worse than it looks from the outside. When the largest equipment manufacturer in the world guides its biggest segment down 15 to 20 percent and its main competitor says recovery is still a year away, that is the equipment market telling you something about where farm income and confidence actually sit.
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From the Barn
The CEO says 2026 is the bottom. He said something similar before the last guidance cut, and the one before that. I’m not saying he’s wrong. I’m saying a 39% operating profit decline in large ag equipment is not what a bottom looks like from where I’m sitting. Dealers are still holding inventory they can’t move at floor plan rates that don’t go down just because John Deere beat a Wall Street estimate. Watch the used equipment auction values over the next 60 days. That’s the number that tells the truth.
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Tork’s Market Update
What the numbers mean for you
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This Week’s Numbers
Prices as of market close · May 21, 2026 · Courtesy of katsgrain.com
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Corn (Jul ’26)
$4.62 /bu
▼ $0.10 on the week
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Soybeans (Jul ’26)
$11.94 /bu
▼ $0.12 on the week
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Chicago Wheat (Jul ’26)
$6.48 /bu
▲ $0.08 on the week
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Live Cattle (Jun ’26)
$249.15 /cwt
▲ $1.65 on the week
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Lean Hogs (Jun ’26)
$95.13 /cwt
▲ $1.38 on the week
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Crude Oil (Jul ’26)
$96.35 /bbl
▲ $1.85 on the week
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Tork’s Picks
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Bitcoin
$77,800 USD
▼ $2,000 on the week
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Beyond Meat (BYND)
$0.75 /share
▼ $0.04 on the week
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This isn’t financial advice. I’m just a farmer with an opinion.
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Tork’s Take
Corn and beans are giving back some ground this week after fighting their way back from the tariff-driven selloff earlier in the spring. The wheat market is the one to watch right now. $6.48 on July after going limit up on the May 12 USDA report. That Plains drought is real, and that number can still go lower before harvest if things don’t break right. Cattle has been running all season and $249.15 on June contracts says the person who has cows in the ground right now is in the best spot they’ve seen in years. And Beyond Meat at $0.75, down again. Q1 revenue dropped another 15%. I’ve been saying this company was going nowhere good for a long time. The market already has its answer.
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Sawyer’s Spotlight
The younger generation’s take, straight from the barn
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I keep having the same conversation with people my age. Different industries, different parts of the country, but the same question underneath it: is the math of building a real financial life getting harder, or does it just feel that way?
Both, honestly. We’ve had roughly forty years of relative prosperity built on a lot of debt, a lot of printed money, and a consumer class that kept spending long past the point where the math made sense. Car loans at six years. A housing market that has priced out an entire generation of potential buyers. Student debt that stretches into middle age. None of that resolves easily, and pretending you’re on a different playing field than you actually are doesn’t help.
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“The guys who are going to come out ahead aren’t going to be the smartest ones. They’re going to be the ones who stayed in the market, kept building their cash flow, bought assets when they could, and didn’t blow the cushion before they needed it.”
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The thing I keep coming back to is urgency without panic. You can’t afford to pretend the fundamentals don’t matter. But freezing because the outlook is uncertain isn’t the move either. Uncertainty is when the basics matter most. The people who have their financial house in order get to act when everyone else is still trying to figure out what happened.
I don’t have this all figured out. I’m 26, farming alongside my dad, running a business, figuring out the same things a lot of people my age are figuring out. But here’s where I’m focused: staying in the market and not making panic decisions. Building cash flow through the operation before thinking about larger purchases. And keeping my lifestyle spending disciplined enough that when the right opportunity shows up, I have something to move with. The window is still open. It won’t stay open forever.
If this one hit close to home, hit reply. I read every one.
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4 Things That Caught Our Eye This Week
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01
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House passes year-round E15 fuel sales 218-203, but the Senate is a different story.
The House cleared H.R. 1346 on May 13, removing the summer sales ban on E15 that has blocked the ethanol industry for over a decade. E15 accounts for a meaningful slice of corn demand, and corn belt states have been pushing this for years. The problem is the Senate. Majority Whip Barrasso has already said he opposes it because it hurts small oil refineries. A companion bill has 20 Senate cosponsors, but that’s not 60 votes.
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02
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While wheat collapses, USDA projects near-record corn and soybean crops for 2026/27.
The agency forecasts 15.995 billion bushels of corn and 4.435 billion bushels of soybeans, among the largest harvests on record. The commodity complex is splitting: wheat bulls and corn/soy bears in the same marketing year. Strong supply keeps a ceiling on grain prices even as export demand holds up.
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03
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Rural Main Street is feeling the squeeze, and the bankers are the canary in the coal mine.
A recent survey of rural bank CEOs found 27.1% reporting outright declines in small business activity in their communities. That’s not a rounding error. When the local banker starts seeing businesses go sideways, the tightening hasn’t peaked yet. Rural communities run on small businesses and when those go, the whole ecosystem follows.
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04
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HPAI is back in dairy herds after a months-long break, and poultry is getting hit in two states.
USDA confirmed five Idaho dairy herds infected with highly pathogenic avian influenza in April, the first dairy cases since a December 2025 detection in Wisconsin. Commercial poultry flocks in North Carolina and California were also hit earlier this year. USDA has committed $100 million to the HPAI Poultry Innovation Grand Challenge to fund vaccines and transmission research. Worth noting: China’s poultry import access is limited to states USDA certifies as HPAI-free. Active outbreaks in North Carolina and California directly affect which states’ producers can access that export channel.
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Before You Go
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Barn Talk Trivia
Think You Know Your Stuff?
This Week’s Question
What is the standard “dry” moisture content for corn at the time of delivery to a grain elevator?
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B 14% |
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| C 15.5% ✓ |
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D 18% |
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Answer
C: 15.5%. Grain elevators use 15.5% as the base moisture for corn at delivery. Corn that comes in wetter than that gets mathematically shrunk, meaning the elevator adjusts the weight downward to account for the excess water before calculating what they owe you. The 14% figure is a short-term storage target, not the delivery standard. Know the difference before harvest and it saves you money.
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Did You Know?
The top 10% of U.S. farms by size produce roughly 70% of the country’s total agricultural output. The other 90% of farms, the overwhelming majority of which are family operations, share the remaining 30% of production. That’s the consolidation story in one number, and it gets more lopsided every decade.
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Barn Talk Word of the Week
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HARDPAN
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A dense layer of compacted subsoil sitting below the topsoil that blocks water drainage and root penetration. Hardpan forms naturally over time or gets compacted by heavy equipment, and it’s one of the silent yield killers that never shows up on your yield monitor until you tile around it or rip through it and see what you were leaving on the table.
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Wheat markets just got turned upside down by a USDA report nobody was ready for. John Deere just confirmed the large equipment market is still in the ditch, whatever the CEO is saying on the earnings call. And HPAI is back in dairy country after everyone started to think it was behind us. Pay attention to that last one. We’re at 2,401 of our 10,000 goal. Every share gets us closer to that live event. Tell a friend.
We’ll see you in the barn.
Sawyer & Tork
joinbarntalk.com
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