Table of Contents
DENVER – CoBank has released its 2025 year-ahead report, outlining economic forces likely to impact the U.S. rural economy. While the broader U.S. economy shows resilience with steady growth and low unemployment, rural industries face policy-driven uncertainties.
“The 2025 landscape remains unclear, but proposed policies from the incoming administration could challenge U.S. agriculture,” said Rob Fox, director of CoBank’s Knowledge Exchange. The report highlights potential disruptions in export markets and labor availability due to shifting federal policies.
Key Takeaways from The Year Ahead: Forces That Will Shape the U.S. Rural Economy in 2025
U.S. Economy: Policy-Driven Risks
Economists expect U.S. GDP growth to hold at 2.5%-3.0%, though policy shifts like tax cuts, tariffs, and reduced labor supply may fuel inflation. Higher interest rates already reflect market expectations. Sectors such as agriculture and construction could face notable headwinds.
Government Actions: Legislative Priorities
The incoming Trump administration plans an aggressive legislative agenda, including tax cuts, tariffs, immigration reforms, and regulatory rollbacks. A temporary extension of the 2018 Farm Bill is also expected.
Agriculture: Profitability Pressures
With commodity prices down 50% from 2022 peaks and input costs still high, U.S. farms face thin margins. Proposed tariffs and immigration restrictions could worsen trade disruptions and labor shortages, particularly in specialty crops and livestock.
Grains, Farm Supply & Biofuels: Volatility Ahead
A strong dollar, possible trade disputes, and large South American harvests may keep grain and oilseed prices under pressure. Biofuels face uncertainty due to unclear policies and low oil prices.
Animal Protein & Dairy: Expansion with Caution
Lower feed costs are boosting livestock margins, though high land and construction expenses could limit supply growth. The dairy sector expects significant processing expansions but may face pricing challenges from increased output.
Food & Beverage: Changing Demand
Potential ingredient regulations and rising use of weight-loss drugs could reduce food consumption, impacting manufacturers.
Energy & Digital Infrastructure: Uncertain Futures
Plans to repeal the Inflation Reduction Act could slow clean energy development, while low participation in federal broadband programs may hinder rural connectivity efforts.
