The United States labor economy started off 2026 in a positive direction with 126,000 jobs added in January. This dropped the unemployment rate to 4.3%, an improvement from the last reported information from December 2025 of 4.4%, according to the U.S. Bureau of Labor Statistics. Unfortunately, and somewhat unexpectedly, recently released data from February showed the loss of 92,000 jobs and a return to the unemployment rate of 4.4%. Recall that 2025 data was revised downward to just 181,000 jobs added for the year, an especially weak mark. Health care and social assistance have led job gains while the federal government continued to shed jobs.

Meanwhile, GDP growth for the fourth quarter of 2025 was a bit softer than anticipated at an annualized rate of just 0.7% based on the latest report from the Bureau of Economic Analysis. Some of this was likely attributable to the government shutdown which lasted 43 days from October 1 to November 12. Inflation, as measured by the Consumer Price Index, increased 2.4% over the 12 months ending February 2026, and no change from January. This decreased from 2.7% as of December 2025, and 3.0% from a year earlier in January of 2025. The most recent figures may also have been impacted by the government shutdown since data from October was not included in the rate.

Uncertainty was the key word used by the Federal Reserve at the most recent central bank meeting, March 18, during which a vote was held to keep rates unchanged in a range between 3.50% and 3.75%. Labor markets appear fragile, with mixed signals of slowing jobs growth but stable unemployment. Inflation was down early in the year, but concerns have appeared over the implications of the war in Iran and surging oil prices. The Fed must balance a policy aimed at promoting full employment and controlling inflation. With mixed economic signals and uncertain conditions ahead, one quarter-point rate cut is expected for this year after three 25 basis point cuts in 2025. Worth noting as well is the impending change in Fed chair as Jerome Powell will end his eight-year tenure as chair in May.

Tariffs implemented by President Trump in April of 2025 and billed as “Liberation Day” tariffs have been decreased to a temporary flat 15% after the Supreme Court issued a 6-3 ruling in the case Learning Resources, Inc. V. Trump. The Supreme Court ruled that the President’s use of the International Emergency Economic Powers Act (IEEPA) was not a constitutionally sound method of implementing tariffs. The ruling was not an indictment of tariffs, nor a statement that the president could not implement tariffs.  Rather, it clarified the president was not authorized to enact tariffs under the IEEPA. The flat rate tariff imposed immediately following the ruling is a temporary tariff imposed under Section 122 of the 1974 Trade Act which only allows tariffs up to 15% to address balance of payment deficits. There are also additional reporting requirements under this authorization. Many claims have since been filed by importers for reimbursement of the tariffs struck down by the Supreme Court.

Corn and Soybeans

The March 10, 2026 U.S.DA WASDE report offered minimal changes for both the corn and soybean markets from the February report. For corn, the most notable update was the increase in world ending stocks, which reached 292.8 million metric tons, exceeding trade expectations and rising from last month’s figure with increases tied to higher production estimates in key exporters such as Brazil and Ukraine. The report emphasized that geopolitical tensions continue to influence commodity flows and trader behavior, with grain markets remaining sensitive to shifting energy prices and trade risks.

Turning to soybeans, the report showed relative stability in U.S. balance sheets but spotlighted global production dynamics, particularly in South America, where Brazil’s soybean harvest is underway and remains a major area of market focus. While the WASDE did not dramatically revise U.S. soybean projections, traders are watching for later‑month updates tied to the March 31 Prospective Plantings and Grain Stocks reports, which could provide clearer guidance on acreage shifts and supply outlooks. The broader tone of the WASDE reflected a market caught between ample global supplies, especially in corn, and ongoing uncertainty from global conflicts and weather developments. Analysts noted that even the lack of significant changes can be meaningful, signaling that USDA sees no immediate reason to alter domestic demand or export expectations despite the volatility.

Overall, the March 2026 WASDE reinforced expectations of large world corn supplies, steady but closely watched soybean fundamentals, and a grain complex still highly reactive to geopolitical risk, South American harvest results, and upcoming acreage data, all of which will shape market direction heading into spring.

Dairy

Producers are coming into 2026 with historically strong balance sheets and working capital positions after multiple years of above average profitability. Although income over feed costs using the Dairy Margin Coverage calculation retreated to the lowest levels since August of 2023 in January and February, both Class III and Class IV futures rallied significantly through the rest of 2026 with the resurgence of the nonfat dry milk and butter markets. The 2026 12-month average for Class III and Class IV Milk Futures is $17.23 and $18.85, respectively. Feed prices are also expected to remain below the historical trend based on the current corn and soybean meal futures prices, resulting in anticipated positive margins for the remainder of the year. Beef income from culling cows and selling crossbred calves are still providing significant benefits to dairy producers’ bottom lines. After a fourth quarter decline in calf prices, crossbred calf prices reached new highs in February topping $1,400 per head.

Dairy producers continue to add cows with 189,000 added to the national dairy herd over the last 12 months and growing the total dairy herd to 9.58 million head, a 32-year high. On top of a larger herd, milk yields continue to increase as well. This growth in both milk yields and total cows will continue to require strength in the U.S. Dairy export markets. Today, U.S. butter and cheese prices remain competitive in the global market and exports through January are strong with an 11% year-over-year (YOY) increase in cheese exports and butter exports up 187% YOY.

New facilities, low feed costs, high beef revenue, risk management programs and the recent surge in milk prices providing economic incentives for producers to continue boosting milk output will likely slow any sort of transition from expansion to contraction.

Pork

Through the first two months of 2026, the optimism that producers carried into the year regarding continued stronger lean hog prices and profit potential has been supported and the outlook for the year remains positive. Lean hog futures and the Lean Hog Index have sustained a rally through the first quarter which as of the date of this writing, March 10, 2026, futures contracts are trading at or near contract highs and $10-$15 per cwt. above year-end contract prices. The Lean Hog Index is also back above $90 per cwt. for the first time since October. Market hog prices and outlook have resulted in record-high prices being paid in the first quarter for both weaned pigs and feeder pigs. Packer margins have remained positive despite higher hog prices due to a strengthening wholesale carcass value (“Cut-Out”) which increased back above $100 per cwt. and back to prior year levels in early March. Some packers are working to increase daily processing capacity and are offering contracts to additional producers which has a positive impact on price and/or transportation costs for those farms. Both domestic and export demand remain strong, providing support for pork and hog prices while supplies remain fairly tight.

Feed prices have remained low enough to provide good margin opportunities but remain a threat and have increased recently on geopolitical risk and unfavorable weather in South America increasing ingredient costs, especially corn. There is little expansion going on in the industry despite the positive news above given persistent risks around disease, labor availability, and high construction costs. PEDv and PRRS remain two of the primary disease risks, with a new strain of PRRS impacting production during the first quarter in Ohio and Indiana. Risk of foreign animal disease remains as well, with increased African Swine Fever (ASF) cases in the European Union, particularly in Spain.

The industry continues to focus on biosecurity measures as the primary protection against disease risk. If these price trends continue and farms can remain healthy, there is a good opportunity to follow a good year in 2025 with a second this year.

 

To view the rest of the 2026 spring Partner articles please click here.