Inflation

Row Crops See Slight Gains Wednesday, Cattle Soar on Record Cash

Thu, 14 May 2026 01:44:35 GMT

Corn and soybeans ended slightly higher, with wheat lower. Cattle and hogs both soared.

Row Crops See Slight Gains
Corn and soybeans were slightly higher on Wednesday with fund buying tied to inflation concerns and some optimism heading into the China summit.

Sam Hudson with Cornbelt Marketing says corn got help from limit up moves in the wheat market after the WASDE but Wednesday traded its own fundamentals.

“USDA data paints a picture where we don’t have a lot of downside, you’re looking at a trend yield, you’re looking at pretty solid acres here. And with that, we still see stocks to usage go backwards about 1% year over year. And there’s just not a lot of breathing room for any errors. I think the fertilizer aspect of it also paints, you know, the idea that you could actually lose a few more acres at the end of June. So with all that going on, it’s just it’s hard. to get tied to a short position, especially when you continue to make new highs. And it was nice to see us press through the $5 mark, but not fade it off real hard. We’re going to probably find some support here now at that level until we can learn about what some of these geopolitics do into the weekend.

December Corn Makes New Highs
December or new crop corn made new highs on Wednesday and posted new high closes. So how much higher could the market rally?

Hudson says, “Well, the $5.08 to $5.13 zone is kind of one I’ve been watching and waiting for here for quite a while. I would say this is a successful more or less test of that. If you can exceed those levels, though, Michelle, and continue to keep a bid in that wheat market and optimism on soybeans and energy markets in general, then I think it’s possible you could track up to that $5.45 to $5.65 zone.”

However, he thinks it will be more of a grind to get to that level with plenty of old crop corn available.

“Demand is big, but we’ve got enough supply to service it. I think where you really get concerned is if you have to pull back. that supply number, whether it’s in acres or yield here down the road,” he says.

E15 Optimism
Some lightly buying could have been tied to hopes the House would pass a year-round E15 bill in the House on Tuesday afternoon.

“There’s certainly plenty of opinions to be had on that but it’s a lot of hype. I don’t know if it matters a ton for demand. I’ve probably been in that camp for quite a while. The adoption process, the pace of that is all filtered back into that. And my issue with it is, you know, whenever we get legislated demand, I’m always wondering about what’s coming along with that in the fine print. You know, thus far, over the last two or
three years, I think the biggest growth and benefit I think that we’ve seen without that is the fact that other countries around the world have adopted it at a much faster pace and that really helps facilitate our exports, especially in an energy pinch like this.

When Does Weather Become a Factor in the Corn Market?
So when will the corn market stop chasing headlines and start trading weather? Hudson says seasonally the market is getting into that window but so far there is no threat.

“It’s really hard to hurt the corn crop between now and, you know, July 1st at this point. It seems like we’re putting that cold weather in the rear view. You might have a few places that are still struggling to get stuff replanted and kind of filtered in here. But on the whole, you know, it’s only the 13th, 14th of May here. We typically plant our best corn, at least in central Illinois, during that time frame anyways. And so I don’t think there’s a lot of concern unless you go cold again or if we’re still looking at persistent rains for the next two weeks,” he says.

The Western Corn Belt is seeing some dry conditions but he says states like Nebraska have irrigation to get the crop up and going.

Soybean Market Awaits China Summit
The soybean market has been trading optimism of a China deal out of the summit this week for some time now. So what are the bulls looking for in the deal and what is already programmed into soybean prices at this point?

Hudson downplayed the meeting. “You know, I don’t know if it’s going to be a big deal as what we want to make it out to be. And the reason I
think that is I don’t I think you could have a lot of frameworks for some of those deals, especially when it’s pertaining to soybeans and some of these ag commodities like that. But we need to see details to see a lot of follow through buying. You probably need to see details,”

He says with the gains in the soybean market going into the meeting there is 30 to 50 cents of risk on the knee jerk reaction if the meeting doesn’t go well.

“But in the same breath, if that meeting doesn’t go well, it probably means you don’t have any more progress in the Middle East. And that’s going to keep our energy markets supported and that inflationary aspect still well alive.”

Soybean Meal Rally Supports Soybeans
Soybean meal was up more than $10 on Wednesday with some unwinding of meal/oil spreads which Hudson says is affecting soy processing margins and company stock.

“ADM would be a perfect example. Some of these biofuel companies, keep in mind the hedges they have to hold during all this. A lot of these margins were locked in initially when we shut the oil flow off from Venezuela, those margins improved. And ever since then, they’re just using their profits to feed their margin calls. I think those profits are going to be even wider here as you get into the fall months and they have new supplies to capture that on,” he explains.

Crush margins had been running at record levels at soy processing plants across the Midwest but especially in Illinois.

November Soybeans to New Highs, July Eyes March Highs
The November soybean contract made new highs on Wednesday and posted a new high close, while July soybeans are still trying to reach the March high of just over $12.50.

Hudson says there have been no soybean shortages yet requiring a push in prices.

“There’s plenty of supply to meet the demand. Those crushers can’t get it in and crush it fast enough. In the meantime, you know, if China wants to buy beans, I still think if it happens it’s going to end up on the new crop balance sheet. I don’t see them knee jerking to buy any old crop beans. And let’s face it, they haven’t really committed to a lot of new crop. So even if we get a positive announcement here, again, you have to look at the details and the volumes of it. And I just don’t know if we’re going to have all that this early in the game.”

Wheat Eases After Limit Up Moves
Winter wheat futures made more new highs early Wednesday still trading the 54 year low in production printed in the WASDE.

However, the market ended lower on a combination of profit taking and some farmer selling.

“We probably all knew this was coming anyways but I don’t think anyone knew the USDA was going to make early adjustment like this
and this instantly has me thinking and probably a lot of other people that you’re going to continue to see additional supply cuts and the first question I have is if the abandonment is going to be that high where do those acres go,” he says.

Options include milo or soybeans and that could impact the acreage numbers at the end of June.

Markets Watch Kansas Wheat Tour Results
The market also faded day one results from the Kansas wheat tour which came in at 38.3 bu. per acre compared to 50.5 bu. for the Day 1 estimate in 2025.

While the tour reinforced USDA’s estimate and there were plenty of visuals to go with it.

“Some of those pictures are just horrendous and just, you know, underscores how bad things are.”

Wheat Pausing Before Next Leg Higher
So was the wheat market just pausing to get more bullish information before taking the next let higher?

Hudson thinks it is possible for wheat to move higher but it is likely to happen in the deferred contracts.

“Because think about acres for next year. You know, not only, you know, we raise wheat all around the globe simultaneously. That’s one of the first markets you could lose acreage somewhere in like a third world country if they can’t get fertilizer or the cost structure gets too high.”

Cotton Hits New Contract Highs
Cotton futures were back higher on Wednesday and nearing the 90 cent mark but will the market get there?

Hudson says, “At this point, why not? You know, we’re looking at two year highs now at this point. I think you’re, you know, this is two prong.
I think you’re looking for more acres, but also the energy pinch that we’re seeing, you know, makes cotton a lot cheaper compared to a lot of this polyester we’re wearing anymore. All those leggings out there.”

Cattle Correct
Cattle futures were higher on corrective buying and with help from higher cash and easing fear about the administration lowering the TRQs on beef imports to increase supplies.

Hudson says, “These headlines took some of the length and took the edge off, but the cash markets are putting it right back in.”

Still he thinks it will be difficult to keep the funds in the market as they will lack confidence in being long with if the administration starts talking
about lowering beef prices again. Funds were still long over 138,000 contracts as of last Tuesday.

He points out that the fundamentals have not changed.

Cash at Record Levels
Cash trade had already developed early in the week at $260 in the South and bids were renewed at higher levels while the futures were trading.

After the board closed the North saw cash trade ranging from $263 to $265 late and dressed prices as high as $410.

Hogs See Short Covering
The lean hog futures were also higher seeing short covering after hitting new lows for the move on Tuesday.

Hudson says the market got oversold. “Things got a little cheaper than I would have expected. Maybe I had a bit of a bias there but with the capitulation you saw on the chart today, maybe that’s enough to put a bottom in this market, at least for a little while until we see how some of this geopolitics play out that we talked about.”

The back months also continue to price in disease concerns and are chasing the higher priced beef market.

Row Crops Extend Gains Wednesday: Is a Bull Market Emerging?

Wed, 13 May 2026 16:25:01 GMT

Grains were mostly higher early Wednesday. Livestock started mixed then turned higher as well.

Has Wheat Priced in Production Cuts?
After limit up closes on Tuesday, the winter wheat market started mixed Wednesday under expanded limits.

Jamie Gieseke with Paradigm Futures says futures were pausing to digest USDA’s big production cut on winter wheat to the lowest level since 1972.

He thinks additional upside is limited as the market has factored the cuts into the market. “I think for the time being, yeah, it’s priced in. We’re struggling to get the European wheat complex to follow along. I think we’re going to need some support from that market to extend this rally on the U.S. wheat side.”

Kansas Wheat Tour Results
Meanwhile the Wheat Quality Council is holding their annual tour through Kansas this week with a summary on Thursday. The first day of the tour, showed a 38.3 bushel per acre yield versus 50.5 last year.

That surprised Gieseke. “I mean 38 isn’t too far off from the five-year average closer to 45. It’s just been extremely dry, I mean it started out hot and low moisture and then you throw in a frost and a freeze and now it’s still staying dry. So, I would have expected a bigger deeper cut than you know six to seven bushels.”

Abandonment rate will be the big key he says especially with higher diesel costs providing little incentive to harvest the crop, even with higher wheat prices.

“Higher diesel costs. I mean, that’s that’s something that the farmer is going to get charged with fuel surcharges. We all know feed trucks are charging fuel surcharges and anything with transportation is going to be higher input costs. If you have a marginal wheat crop, I just kind of really question how much they’re going to be anticipating going to get it,” he explains.

Global Wheat Numbers
Digging into global wheat numbers in the WASDE he was looking at the data on Australian from the Foreign Ag Service regarding 2026 production and Canada.

“They were going to cut production in Australia due to lack of fertilizer or diesel they accounted for some of that but more so they the bigger side of the cuts that they made for the 26 crop was due to weather shifts accounting for El Nino. The WASDE actually did a pretty good job of funneling that into yesterday’s report. I think the Foreign Ag Service cut Australia production about 7 million metric ton year on year. I believe the WASDE cut it about six. So they did a good job of incorporating that into yesterday’s report. Canada actually also got cut. Foreign Ag Service also cut Canada’s production here beginning of April. So they did a good job of accounting for that in yesterday’s report.”

Corn Trading Higher, Global Stocks Tightest Since 2013
The WASDE did not provide much bullish fodder on the domestic balance sheets with new crop ending stocks at 1.957 billion bu. However, the global stocks were down 19.4 MMT from last year says Gieseke.

“I think the price trend will continue to push higher here from a world perspective that was the real story yesterday. I think it’s the stocks to use number once again we have to account for demand when we talk about total supplies here on grain moving forward because demand has increased so much on all these commodities with these lower prices. So, I mean a 21.1% world stocks to use number is as tight as it’s been since going back to 2018, which if you remember that’s pre-China finding 60 million metric ton of corn in their stocks,” he explains.

So, stocks are as tight as it’s been since 2013 and the corn market doesn’t have a ton of wiggle room.

Chart Breakout in Corn
Gieseke thinks the market is on the verge of a bull market or a chart breakout as the front month continuation chart shows higher highs for the last two months.

“I just pull up a monthly continuation chart and I just kind of look at that chart structure and say, you know, a monthly close at $5 or higher is probably going to be that next indicator for us, whether we’re stuck in a range. So the range would be, you know, 2024 low. The 2025 low is actually higher than the 24 low. But if we can get that close above $5, that would be a step in the right direction compared to the 2025 high, which was made last February. A close above $5 on front months would kind of set the stage for that next leg higher here,” he adds.

Corn demand has been strong, especially with record exports but what is the catalyst to get old crop corn above $5 with carryout still over 2.0 billion bu.? Would China business be the key or a weather issue?

“Given the time of year that we’re in, it’s without a doubt going to be supply side. You know how the Brazilian crop finishes off here or you know the Western Corn Belt here is very dry. I know this weather system moving in in the next week we’ll we’ll cover the I states pretty good but you got to remember last year’s crop was ultimately pushed higher because of these the Western Corn Belt actually had some very good yields last year. So, if this dry weather persists it’s going to be a supply lead rally,” he says.

E15 Vote in House
The corn market is supported not only by hopes of China business but the possibility of year-round E15 as the House votes on that bill on Wednesday.

However, Gieseke doesn’t see it as a huge market mover. “I think the market, it’s just going to get muted by everything else going on here this week. I’m not anticipating much of a move from it.”

Soybeans Gear up for China Summit
The soybean market has been gearing up for the China summit for several weeks now. The key will be will agriculture be a focus and it looks that way from the leaders traveling with the President.

“Yeah, it was a powerhouse roster that he brought over there, including the Cargill CEO. You know, today’s this week’s meeting as far as it leads to soybeans I’m not anticipating much more. So, I’m more so continue to watch the just the FOB price in Brazil and how it compares to the U.S. and that spread has closed here the kind of tightened up here the last month or so but the trend on both of those prices that continue to be higher. So, to me I think that’s more of a market mover than, you know, today’s or this week’s discussions in China.”

Market Anticipating 25 MMT of Soybeans
Still the market has been gearing up for 25 million metric tons of soybeans to be confirmed by China for this year. So it that isn’t part of the deal will soybeans sell off due to disappointment?

He says, “Only to the extent of Brazilian prices. Brazil is going to continue to be the floor of the market, and we shouldn’t need to be the cheapest soybean in the world. We just need to be competitive with Brazil’s exports. Again, if that spread between U.S. and Brazil stays within 50, 60 cents of each other here during our harvest or if the gap can close, I think we can meet that 25 million metric ton. It’s just way too early to write it off as we won’t.”

July Soybeans Take Out March High?
From a technical standpoint, July beans have not taken out the March highs although November keeps making some new highs for the move here.

Will July make new highs if China confirms any U.S. soybean business? He says,"There’s a gap on old crop beans in the $12.32 area, interday chart. So if we close that, that’d be a good check in the right direction.”

How high could November soybeans climb? “I mean, as far as new crop beans, $12.30 is going to be an area of interest for us to start hedging
some more.”

Soybean Oil Rally Stalling?
The soybean market has also rallied on the back of the soybean oil rally and the 60% increase in the RVO levels for biomass based diesel blending volume.

However, Gieseke says that rally is getting mature. “We’re going to date this back to January when it started to break out. A lot of the commodity indexes actually started to break out in January. Soybean oil was kind of the first of the ag sector or the grain sector to start to break out.Technical projection was just that weekly cup and handle formation that we’ve talked about before. It actually met that target here last week. So we’re actually not anticipating too much of a sell -off here in soybean oil. The rally has been extensive, but we’re really looking at meal kind of taking a little more of a leadership role here going forward for the next few weeks.”

Commodity Index Hits 2.5 Year High
The rally in bean oil has been on the heels of the surge in the diesel fuel heating oil and crude oil markets. Retail diesel prices hit record highs on Wednesday and coincide with inflation figures heating up with both the PPI and CPI rising.

So that continues to bring money into the commodities and grain markets.

He says, “The Bloomberg Commodity Index, we tracked that pretty closely. That took out 2022 highs. We really don’t see it slowing down. Typically, it might slow down, but we don’t see that trend reversing yet. To slow that down, you need something like, again, higher interest rates, unemployment picking up some sort of breaking point.”

Start of a Bull Market in Grains?
So do he anticipate money will continue to come into the grains because of that inflation risk and start a bull market like we saw back in 2020 after COVID?

“Yeah. I mean, I don’t see anything from a technical standpoint or monetary standpoint that says it’s short-lived. For right now, I’m just kind of staying out of the way and along for the ride.”

Oregon Farmers Navigate The Ups And Downs Of A Changing Ag Landscape

Wed, 06 May 2026 22:05:35 GMT

Helle and Bruce Ruddenklau make almost every agronomic move on their Willamette Valley, Oregon, farm with their balance sheet in mind. Crop rotations, contracts and niche markets are the core tools they use to maneuver through and survive today’s costly inputs and soft crop prices.

The couple farm about 1,100 acres near Amity, Ore. They own a third of the ground and rent the rest.

About half the acres are in commercial grass seed — perennial ryegrass and fescue for lawns, golf courses, sports fields and parks. The rest of their acreage cycles through wheat, an oilseed called Meadowfoam (highly sought after in cosmetics, skincare products, and specialty industrial applications), green beans, occasional sweet corn and peas, radish seed for export to Japan, clover seed and hazelnuts.

The crop diversity is critical. It helps even out the economic ups and downs of farming, and it also helps address a problem the couple didn’t even know they had initially in the 1990s: herbicide-resistant grass weeds, a challenge exacerbated by the fact they produce commercial grass seed.

“We had to come up with a different way of fighting some of these grassy weeds without chemistry, and that was through rotation. And no-till was the other big, big thing,” Helle recalls.

In the late 1990s, the couple invested in a no-till drill and redesigned their rotation.

“The (commercial) grass seeds stay in for two to four years, and when they come out, we have at least two years of other crops in those fields so we can get new chemical applications on, try to rotate and get on top of any grassy weeds that may have built up,” Helle tells Andrew McCrea during a recent episode of Farming The Countryside , available on Farm Journal TV.

Focused On Crop Diversity To Create Income

Crop rotation is a framework for stacking income streams. Every crop has to pull its weight against rising fertilizer and fuel costs.

“As with all farmers, our input costs are higher than what they have been. That’s been a huge challenge. Everybody here’s trying to find something that’s more profitable to grow,” she says, adding that she believes Midwest farmers have an even harder time generating ROI.

Grass seed has delivered strong margins at times, but COVID-era demand whipsawed the market. A surge in lawn and turf projects sent prices sharply higher in 2020. Seed companies then pushed acres. A couple of variable years later, and the industry became awash in seed.

“We’re still working through that oversupply from three years ago or so,” Helle says. “Our price has dropped in half, basically, from what it was.”

With prices cut and input costs elevated, some growers are rolling the dice and producing grass seed on speculation.

“You have the option to grow grass seed without a contract, and then you have it on the open market,” she says. “If there’s a market for it, you can sell it. If not, you just sit with [it] in the barn and wait.”

The Ruddenklaus work hard to avoid being in that position, growing most everything under contract.

“We have one field that we have an open market Kentucky 31 variety on. But other than that, everything we grow is under contract on both the grass seed, specialty crops, hazelnuts, vegetables, everything.”

Relationships Play An Important Role In Farming

That contract-first mindset shapes what they plant and who they do business with.

“A lot of it is relationships with different dealers… that we know they will treat us fairly, and they know that we will produce a quality product for them,” she says.

Those relationships open doors to new niche markets that fit within their existing rotation.

“A few years ago, a local economic development company came to us and said a local soy sauce manufacturer was looking to have some local production of hard red spring wheat,” she recalls. “Oregon traditionally grows soft white wheat, so it’s not something we had worked with in the past, but we decided to try it, and that’s become a very valuable little niche market for us that has worked out well.”

Through that same connection, the farm links with AgLaunch, a Tennessee-based network that brings farmers and ag tech startups together.

“The companies come in [and] want to get the support of the farmers, the advice, the on-farm trials,” she says. “In exchange, they have to give up some equity to the farmers’ network. So through that, we also are getting exposure to some new companies and potentially new opportunities. We are definitely always looking at things.”

Some experiments — like trying grain corn and soybeans — have not become permanent fixtures on the farm. But even those tests help the Ruddenklaus calibrate where their competitive edge really lies: in specialty crops backed by contracts and rotations that help them manage weeds and other risks at the same time.

“I think agriculture has an amazing, amazing story. Farmers are innovators, and that’s just part of what we have done through generations,” Helle says.

“I’m not pessimistic about where we’re at,” she adds. “I believe agriculture has a bright, bright future. We belong in society. We have an important role to play. It won’t look the same as it has in the past, but we’ll figure it out.”

Helle was the recipient of the Top Producer 2026 Woman in Agriculture award . The award was sponsored by ProFarmer.

Know someone you would like to nominate for the Top Producer Woman In Agriculture? Nominations are open! Recommend your candidate here .

Grains End Higher as Funds Buy on Inflation Concerns: Cattle, Hogs Lower

Fri, 01 May 2026 21:39:09 GMT

Grains ended higher on Friday with livestock lower.

Soybeans Rally with Bean Oil
Soybeans were higher on Friday following bean oil which made new contract highs and hit levels not seen since June of 2022.

Jim McCormick of AgMarket.Net says the bean oil market has been seeing strong U.S. and global demand with various countries announcing biodiesel mandates.

“Soybean oil has been the lead driver for the bean complex. Years ago, meal was the driver for beans. It’s now the oil due to the biodiesel.
That definitely is helping it,” he says.

Frost and Cold Weather
Soybeans may have also been adding risk premium due to frost concerns.

Some areas of the Corn Belt already saw freezing temperatures and are facing replant and there is another push of cold weather coming in the next few of days.

He says, “Another cold shot this weekend and there is worry about some replant going on. Parts of the country earlier this week also had some very, very heavy rains. We are hearing parts of Southern Indiana, Illinois might have to replant as well,” he says.

New Month, New Money in the Grains on Inflationary Buying
McCormick says a new month also brought in new money on inflation concerns.

“You know, as long as you have the problems in the Middle East going on, you’re going to have people wanting to buy commodities on the energy inflation hedge. And then the other story line you’re going to continue to hear is about the food inflation risk due to the fact of not getting fertilizer there. There’s fear there will be a shortage in the Southern hemisphere growing season. That is attracting spec money into the markets as well,” he adds.

He says there are plenty of investors that made money on the last round of inflation that started in 2020 and hit its height in 2022.

“Coming out of COVID, they made a lot of money trading that inflation story. So some of that money, I believe, is coming into the market. And that is what’s supporting the corn market,” he says.

The record high diesel fuel prices are also driving up inflation McCormick warns.

“Remember, everything is used, you know. for you know in energy to get that product to where we need it so you know you’re you know and then so much of the packaging is derived from products made from energy from crude. So you know that has got a lot of the just inspect investor money saying I want to own an asset that could make me money if we come back into inflationary times. We got some inflationary readings this week shows that the inflation is going the wrong way compared to what the Fed wants. It’s starting to creep back up and that tends to attract money near term.”

Bean Oil Follows Crude Oil
How much higher can soybean oil go if crude oil stays above $100? Is that the key here for keeping the funds interested in that market or not?

He says, “I think that’s one of the major keys. I mean, the fact is as crude oil continues to go higher, as the Strait stays shut, that probably is going to be supportive.”

The caveat is competition from other lower priced veg oils he explains. “What we’re finally starting to see is we saw the story six months, a year ago, where we were bringing a lot of used cooking oil in from China and going into our renewable diesel plants. Well, we’re starting to hear reports that that is happening again. So what it’s showing you is the price of bean oil domestically has gotten so competitively priced, so high priced, I should say, that you can now import it. That will tend to ration. the demand for the product a little bit, and that might at least at a minimum, slow the upward momentum.”

Worst case, he says it could force the top in the market.

Soybean Chart Breakout
Soybeans had a strong technical day with July closing above $12 and the November contract making a new contract high.

November soybeans could go higher but it depends on if the funds want to add to their long position.

“I would argue, the market isn’t trading your typical grain fundamentals. You’re trading macro fundamentals of the Middle East. And you’re trading, like I mentioned, the inflationary aspect of it. That can carry the market a lot further than economically it really makes sense. So really, the money flow is going to be the key to how far this market can be carried higher,” he says.

Although the July contract closed above $12 he says that contract is still range bound.

“It is still sideways. It’s taken out the near-term range. It has not taken out the high, I believe that was spike made the past fall when the Trump administration announced the China trade deal.”

China Meeting Key
He says that is the key for the market is if the China meeting happens in mid-May and is not delayed again.

“If talks with President Trump and Xi are still on, and President Trump is anticipated to make his way over to China here in the next couple of weeks you’re probably going to hear more rhetoric potentially about what China may do. I do not believe there are going to be a big buyer of old crop beans. They did in that first agreement back in the fall talk about buying 25 million metric tons of new crop beans. We’ll see if they can lock that down and get a hard commitment,” he explains.

If that deal doesn’t happen the soybean market could fall apart.

“We know I think the last time we go around when we had to postpone the meeting, the market did sell off a little bit. And there is a lot of uncertainty to it. Like I said, President Trump sounds like he wants to go. But, you know, we’ll see, you know, with the war going on in the
Middle East, I think all, you know, we probably, you know, this thing could fall apart at the last minute,” he adds.

Corn Makes New Highs for the Move
July corn made new highs for the move while December again was capped by the $5 mark.

McCormick says the funds are buying corn because of inflation concerns and the fertilizer issues.

“There’s no doubt about it I mean part of it is you are seeing some buying I think definitely on the fertilizer plate now most people agree that the fertilizer in the U.S. is expensive but there is no shortage. We’re pricing on a world market and if our prices are too cheap somebody from the rest of the world will come in and buy it and ship it back there but it’s here,” he says.

The world is worried if the Strait isn’t reopened there is going to be a shortage for fall needs and South American needs.

He adds another thing attracting investor money is the ethanol grind and the price of ethanol compared to gasoline, which is much cheaper.

$5 December Corn?
So it may be just a matter of time here before December takes out the $5 level but how far can it run before farmer selling caps the rally?

He says, Well, it’s a situation where we saw a lot of farmers selling here this week as the market tried to push into that $5 level. And then I would argue as we get through that $5 level, you’re probably going to hear a backoff of selling. And then you get back up, I believe you had the contract high, I believe was right around $5.12. That’ll be the next level resistance. I mean, now the question is where are farmers going to be comfortable selling versus the speculators that want to own it?”

Six weeks ago he says farmers would have jumped at $5 corn but now there is hesitancy tied to weather and fertilizer concerns.

“So people are very hesitant to sell it and if that farmer’s not there to sell against that spec money coming in that will allow this market to move higher,” he says.

Wheat Market High In?
The wheat market saw some recovery on Friday but has corrected off the two year highs hit on Wednesday in both winter wheat classes.

So it the top in?

McCormick says, “Right now I would argue it’s a little bit more of a profit taking week. Remember, we wrapped up the week here just on Thursday. The market was way, way technically overbought, a little bit of a correction. The corn wheat spread was out of whack as well. The other thing maybe generated a little bit of profit taking and generated some selling potentially was we are importing wheat from Poland, I believe, which shows you the price of our wheat has gotten so high that you can make it comparable to bring in competition. That will limit the upside momentum.”

However, he doesn’t think the weather story is over.

“We’ve still got a long way to go. There’s not a lot of rain in the forecast. I’ve had clients that are still trying to adjust for the losses they think
they had due to the severe frost damage that they had here a week, 10 days ago. We’ve got more cold weather coming in. I’m not completely convinced that this wheat market is done with going up,” he says.

Wheat Production Losses
How much of the hard red winter wheat crop has been lost? Some estimates are as high as 200 million bushels.

McCormick says, “I would argue somewhere around 200 million on the low and maybe 300 million on the high end. Now, I know that’s a lot. But remember, we did have a big crop a year ago. So the overall supply is still relatively comfortable. That’s part of the debate of the market right now and that’s why we may not have put the top in because we just don’t know.”

He thinks USDA will make some of that adjustment in the May 12 WASDE in the first balance sheet for new crop.

Cattle Make Record Highs Then Fall
The cattle market made new contract and record highs in both live and feeder cattle futures on Friday, then ended lower.

So was that just some profit taking or the talks that packers were going to start kill cuts next week?

“I think kill cuts are part of it, but I think a lot of it was profit taking. And we had one heck of a move higher. I think we rallied $15 in roughly six days or something like that. Just one heck of a strong move. And I think some people decided, hey, they want to take some money off the table
right now. I mean, we know the story, Michelle, the cattle supply continues to be incredibly tight. We’re also moving into a time of year where the demand tends to ramp up as you go into the spring and summer barbecue grilling season,” he explains.

The key will be if the consumer is willing to pay the higher prices for beef with the spike in gas prices.

“We are in a different situation than we were last time prices were up. You have gasoline prices here outside of the Chicago suburbs trading at $5, outside of Detroit at $6. So, the question now is how much can the consumer take?”

And will they trade down to cheaper proteins.

Hogs Fall on Pseudorabies Case

The hog market was down Thursday and Friday with the first case of pseudorabies in a small commercial hog herd in Iowa since 2004.

The market was pricing in the uncertainty but how low will it go?

McCormick says he thinks the low is close. “Usually it takes one to three days to price in these negative headlines. Like you said, we’ve heard it a couple of days ago. So hopefully we’re close. It was definitely disappointing. Like you said, we haven’t had a case like this in 2004. So getting that headline definitely was a surprise to the market. And, you know, kind of a knee jerk reaction you get when you get these surprise stories.”

Corn and Wheat Pause on Profit Taking: November Soybeans Hit New Highs

Thu, 30 Apr 2026 21:41:45 GMT

Grain markets ended mostly lower except new crop soybeans, cattle were mixed with hogs lower.

Corn and Wheat Take a Breather
Corn and wheat both ended lower on Thursday.

Allison Thompson with The Money Farm says wheat made new highs on Wednesday and was overbought and due for a correction.

Corn made new highs for the move in the overnight session before seeing some pressure from the lower wheat market and profit taking as it was end of the month, plus the start of the delivery period for May contracts.

“I think there was a lot of that definitely at play with the session here to obviously to finish the month. We know the funds have definitely been buyers here again. So seeing them take some profits here after a really strong move is good to see as long as we’re holding support. And so far that seems to be the case. We did have some healthy retracement levels tested during the session. But so far we haven’t seen any meaningful changes fundamentally. And I think that’s going to keep support here under the whole grain complex,” she explains.

The crude oil market also corrected after spiking in the overnight session which may have weighed on corn and wheat as well.

She says, “Yes, crude had losses today too, but there too, we had a very strong overnight session and pushed to some new highs for the move.”

Corrections Are Healthy
She says the corrections in corn and especially wheat are healthy.

“We can’t go in a steep climb forever. You’re going to have to have pullbacks. And honestly, just after the beginning of this week, or even looking back the past three weeks, we’ve had some phenomenal rallies. Wheat, for instance, rallying over $1 in most contracts across all three exchanges. So having a first pullback here, you know, with some double digits is actually healthy for the market. And again, we haven’t
seen anything fundamentally change the story here today. Makes me think it’s more technical,” she adds.

Farmer Selling
With the big run up in prices there was likely some farmer selling as well.

Thompson says she hopes farmers took advantage of the rally to do some pricing.

“We’ve been definitely pushing to be making some sales, especially on a strong run that’s, again, a lot of weather and momentum traded. So it always makes you a little leery, especially this time of year. There is risk ahead, don’t get me wrong, but you’ve got to be rewarding the market when we’re getting rallies and strong moves to some new highs, of course, that producers haven’t seen for a couple of years,” she states.

Weather Change?
There was also some rains in the forecast for HRW wheat areas like Texas. In the past those rains have been disappointing and if the pattern stays the same wheat could add back weather premium according to Thompson.

Plus, she says it may be too late for the rain to help some areas.

“Yeah, at this point, I think a lot of the damage has been done. I’ve talked to producers down there. I’ve also talked to some custom harvesters who’ve been moving or trying to talk to clients who’ve been all the way down to Texas. And unfortunately, one person even commented that they weren’t able to get any farms that were willing to book for wheat anywhere South of South Dakota. So I think that there’s definitely some production issues there,” she says.

There is some replanting taking place but with 34% of the U.S. crop heading it is going to be too late for rain to make a difference in her opinion.

How Big Are the Production Losses?
So are all of the losses priced into the market and what production cuts could be expected?

Thompson says, “Well, that’s the million dollar question is where is final production going to be? But ultimately, the market’s pricing in where these production losses are going to be. And ultimately, it depends what the USDA does. We know they’re kind of notorious for kicking that can down the road. So it could take a couple months before we really start seeing what production is going to be like. And it probably will wait
until we get further into harvest. So end of May, beginning of June, when we normally see winter wheat starting to harvest that we start really building something here on this market.”

She reiterated that wheat markets have a history of going further in extreme times than a lot of people would think.

“And I think we’re in that environment now where we could see prices continue to spike higher.”

Spring Wheat Planting Slow
The spring wheat market was down from the contract highs hit on Wednesday.

Prices have finally moved above $7 and hopefully are profitable enough to entice farmers in the North to continue to plant.

But is the market concerned about low acreage or yields?

“A fair question. You know, South of me, you don’t have to go very far an hour closer to Fargo. And there are guys who are already done planting spring wheat, getting beets in the ground. And then up in my area, just an hour North and beyond, there isn’t any real equipment moving. We really haven’t turned anything yet. And even this morning, we had snowflakes falling in the area. So spring isn’t exactly here yet. And that’s, you know, just keeping things a little bit at bay,” she says.

But it is still early and so she thinks the intended acres will get planted but none beyond that especially with higher fertilizer prices.

Fertilizer Crunch
She says any farmers that have booked fertilizer are more likely to use it on corn acres instead of wheat.

Many industry analysts believe corn acres are dropping but Thompson thinks in the North the acres will be close to intentions.

“A lot of guys booked fertilizer early. Talking with producers where I think those acres are kind of locked in I don’t foresee a big switch coming from our area. I think a lot of guys are intending to plant acres again, just based on what they produced last year. They had a very good season. So I think guys are really going to try and get the corn in the ground, especially if they have the fertilizer booked. If they don’t, might be a different story case by case. But I do think that we’re going to get a lot of the corn going in the ground this year,” she adds.

$5 Dec Corn
With a cut in acres and high fertilizer prices the December corn is flirting with $5. Will it get above that level?

She is optimistic it will for several reasons.

“You know, demand has been very strong for corn. And I know we’re starting to talk about the U.S. growing season and not really seeing, you know, a lot of risk there yet necessarily. I mean, planting pace is going good. Conditions are going to be around the corner here and there’s no hiccups. But we also have to remember South America is a big one right now. And over the next couple of weeks, a lot of their top producing areas further north are going to be starting to go into a dry and hot season. And I think that could have more of an impact on the global corn market, especially with ending stocks at 10-year lows, stocks to use ratio at 10-year lows. We can’t afford a problem. And of course, we have the growing season ahead here yet. So to see the risk appetite in the grains that we have right now, I think it definitely leaves the door open,” she says.

Technically if Dec corn can get about $5.03 she thinks there is a good chance to go to $5.25.

Soybeans End Mixed But Off Lows
Soybeans were under pressure early but did come back with the rally to new contract highs in bean oil even though crude oil reversed lower.

She says a biofuel report show an increase in usage which helped push bean oil.

“So I think that the demand on the oil side could step up some more. But ultimately, that’s what’s leading the market. I mean, we hit three and a half year highs today, and that certainly helps the idea for soybeans. And that complex is really split. It’s obviously a product market. We’ve been following meal for the last couple of weeks. Now it seems like it’s switching over to the oil side. And oil, when that’s leading, can definitely create volatility. So I expect that we’re going to stay range bound here unless soy oil can really kick it into another gear.”

Soybeans Attempt Chart Breakout
The soybean market attempted to break out of its sideways trading range and got above $12 but could not close above that level.

November soybeans made a new high but then closed back under that level.

She says, “It’s really good to see the market really probing those resistance levels and really trying to break through them. But until we can get a close above $12 or above in July, you know, $11.75 in November, it makes it really difficult. You know, the market ultimately is still looking for a catalyst. We have supportive elements there. They’ve been there for a while and they’re keeping us at the top of the range, but the market clearly wants more to get there. So it’ll be interesting to see as we go forward.”

China Deal or Crush?
The one catalyst the market may be waiting for is the results of the China meeting on May 14 and 15 as record crush alone has not been able to get the market above current trading ranges.

“Crush margins remain very strong. So, I think domestically we’re definitely set up and we’ve seen that shift we’ve been talking about it here for several months that you know soybeans used to be a dominantly export market and we’re really starting to see it shift to the product side and so to see that strength build I think it’s just a switch happening within the complex and soybeans are obviously reacting to it and I think it does give us a very good floor under soybeans,” she further explains.

Live Cattle Consolidate
Live cattle futures were mostly lower after hitting record highs on Wednesday on the heels of record cash.

She chalks it up to month end profit taking similar to the grain markets.

“We’ve had a healthy run you’re gonna have to have healthy pullbacks too. It’s good for the market so we’re obviously going to be trying to find support here grains as well same with the livestock just finding where that level of support is going to be where buyers are going to step back in and I think that’s the environment we’re in across the board,” she says.

Funds have been eager to buy on breaks which should also keep the market supported.

Grain and Cattle Futures Pause on Profit After Some Hit Fresh Highs

Thu, 30 Apr 2026 15:55:48 GMT

Grain and livestock markets are mostly lower early Thursday.

Grains See Profit Taking
Grain markets are taking a pause on Thursday after some new highs for the move overnight in July corn. Plus, 22 month highs Wednesday in both winter wheat classes and new contract highs in bean oil, December corn and hard red spring wheat.

Chip Nellinger with Blue Reef Agri-Marketing says it’s end of the month, so he chalks this up to some routine profit taking and farmer selling.

“You saw with the new highs in the corn market, a lot of new farmers selling, just cleaning up some old crop stuff, but probably a little bit bigger movement on the new crop as we just got fractionally close to $5 December futures. That’s the highest level we could have sold to date on the December contract,” he explains.

Markets Eye Crude Oil
The markets are also watching the movement in crude oil, which was sharply higher on Thursday and overnight with the Strait of Hormuz still blocked.

Crude oil backed off and pushed slightly lower early Thursday on end of month profit taking and Nellinger thinks that may have trimmed gains in the grain markets as well.

“We’ve had crude oil really screaming higher, got north of $110. It reversed overnight and is back a couple dollars lower. And so I think all of that is kind of a little bit of a headwind here, but it’s not like it’s aggressive selling yet. Just kind of a normal correction lower. I don’t think it’s anything out of the ordinary,” he says.

Wheat Rally Over?
The wheat market was overbought and do for a correction plus it is first notice day for May contracts and Nellinger says there were some deliveries in Kansas City wheat.

“There’s an old saying on the Chicago Board of Trade grain floor from way back when, buy first notice day. I don’t know if that’s going to hold true today. Kansas City wheat had some deliveries on that May contract. A little bit shocking. You know, sometimes when you get to first notice day, the commercials really kind of start playing a high-stakes poker game, trying to, you know, sift each other out and figure out who’s got the ace in their pocket. And so I think that commercial delivery in the Kansas City May contract this morning had a little bit of a negative tone to it. After a big run into the month, good reason to pull back a little bit.”

There are also rain chances for Texas and that may have also caused funds to take some profits.

However, Nellinger doesn’t think the lower production concerns are priced in yet.

“We’ve likely priced in a lot of the multi-week crop condition decline. But to your point, we don’t know what the ultimate yields are. There’s a lot of people saying, hey, rains don’t matter at this point. We’re too far gone on yields. We may even abandon these acres and not get harvested. So we know there’s damage, but sometimes you have to wait to get into harvest to figure out really what is there. But certainly rain in the forecast, even if it’s a small chance, you know, is not immediately bullish. But likely we’ve dialed in a lot of a lot of bullishness with yield pullbacks. But we won’t know till harvest the ultimate result there,” he says.

Frost Concerns
There are also forecasts for cold temperatures and some frost in some areas of the wheat belt as far South as Nebraska.

Some of the corn and soybeans that have been planted may also be suseptible.

“Yeah, I think on the eastern Corn Belt side, there certainly would be. Again, I don’t think it’s a tremendous amount of acres, but we’re far enough long on the production cycle there that a hard freeze now, once we’re about to turn the calendar here to May, certainly could nip a little bit of wheat. It’s not the perfect time for a frost. We’re far enough along in the development that it could hurt, but I think the frost line is going to be far enough north. probably going to be out of that main wheat growing area in the Eastern Corn Belt here,” he adds.

Does Corn Take Out $5?
December corn got just a tick from $5 on Thursday as it made new contract highs as it has been getting help from the wheat market and the run up in energy prices.

However, if the wheat market rally is over does corn have enough of it’s own story to take out $5?

Nellinger thinks so. “You know, we’re coming into the timeframe here. First part of May, we’re typically put in a spring high. I think everybody’s kind of watching that. And everyone’s asking that same question, Michelle. I think some of it depends on crude oil. You know, crude oil went very quickly from $90 a barrel to north of $110 a barrel. The world took notice of that. The Strait of Hormuz is still closed. So I think some of it depends on what happens the next 10 days, two weeks on crude oil prices,” he says.

The May crop report is also coming up and the market may need demand confirmation from USDA on corn and beans to keep going, but he’s not ruling it out.

“I wouldn’t put it past this to get north of $5 on Dec corn. I don’t know if it’s dramatically north of there as there’s going to be a lot of farmer selling on a push north of $5,” he adds.

Fertilizer Story for 2026 or 2027?
Still with high fertilizer prices and some farmers unable to get supplies there is talk of lower corn acreage for 2026 but is this more of a 2027 story?

He says, “I think it’s both. I’m getting a sense of that as well. And I think that’s maybe drawn some kind of outside equity money in or money off the sidelines kind of as an investment into grains. I get this sense that there’s a narrative across the world of potential food shortages, yield losses due to lack of availability or rationing of nitrogen due to high prices. I think it’s yet to be seen. It’s certainly not something that’s bearish.”

It will impact the Southern Hemisphere, Brazil and Argentina in particular according to Nellinger.

“We have some issues brewing here. So I think it is a story. It’s not going to go away anytime soon,” he says.

Basis Improvement on Corn
Even with the higher futures prices on corn the basis has also improved which is perplexing to Nellinger.

He says, “Yes, you can argue that producers were in the field doing field work, some early planning in the Southern portions. But that basis improvement started even before they got in the field. So surprisingly, over here in the Eastern Corn Belt, things look relatively tight. I don’t think there’s a lot of old crop corn left. Basis has improved. Demand’s good. But in the Northwest Corn Belt, I don’t think the basis has improved as much.”

Export demand may be part of the reason and weekly sales were strong at nearly 63 million bu. again on Thursday.

“Still running, what, 2%, 3% ahead of the pace that the USDA has, and that’s a massive number to begin with. So there has been no slowdown yet,” he says.

High crude oil prices have ethanol margins strong and even with a smaller cattle herd he says producers are feeding to much heavier weights.

Wednesday’s EIA report showed ethanol production was down 31,000 barrels per day, but it was because of routine maintenance.

E15 Possible?
The House passed the farm bill without the E15 amendment but is looking for an alternative to get it passed yet this week before Congress goes on recess until May 12.

How big of demand push will that be for corn?

Nellinger says it will help but it won’t shoot prices higher.

“Unless it’s a mandatory, you know, a mandated thing that we’re going to use X percent. If it’s voluntary, it will help, but probably not to the massive bullish extent that maybe people hope for,” was his opinion.

Soybeans Retrace But Still Sideways
Soybeans are easing as well on Thursday with the rest of the grain complex and seeing some end of month positioning.

However, the soybean oil rallying to new contract highs on Thursday has been supportive as well as hopes for a China deal.

He says, “There’s a lot of optimism that these mid-May China-U.S. trade talks are going to immediately produce large Chinese bean purchases. Not sure if I’m in that camp, but it’s going to hold the bean market fairly firm on breaks in here for a couple of weeks. And you mentioned bean oil. We’ve been hitting new contract highs there again following crude oil.”

Is Bean Oil Close to a Top?
So is bean oil getting overpriced or is it putting in a top?

Nellinger says the big key is when is the Strait of Hormuz going to open and when is oil going to start flowing.

“Crush margins are near record. And so crush demand domestically is just through the roof. And that’s helping bean demand,” he says.

Cattle Consolidate Off Record Highs
Live cattle futures hit record highs on Thursday following record cash trade.

However, Nellinger says they are due for a correction especially as it is end of the month.

“The speed that we went up, yeah, the cash market was massively strong, way better than expected. Probably due for a break in here. I’m not so sure that the packers didn’t get long and then goose the cash market. They’ve been known to do that, and then they take profits immediately after that. So no reason we’ve got to break $20 barring some sort of a Black Swan news event but we are probably overextended and need a little bit of a break here to correct the overbought condition,” he says.

FOMC Leaves Rates Unchanged For Now?
The Fed left interest rates unchanged at the conclusion of their April meeting but the surprise was there were four dissenting votes giving the indication that additional rate cuts are off the table for 2026.

In fact if energy prices stay high with the ongoing war and inflation continues to flair is it possible the Fed could have to raise rates this year?

Nellinger says its possible, “Yeah, I think you would have to, you know, and you may have to anyway. I think that the the $100 plus crude oil is going to take several months to sift through the world economy. So we haven’t even seen some of the effects of that on prices. Think about everything that moves with diesel trains, automobiles, planes, barges, you name it. it is a big deal so the longer we stay at or above $100 I think the more of an argument they have to raise rates to kind of stem inflation a little bit,” he adds.

Cattle Bounce as Border/Strike Fears Fade, But is the Correction Over? Grains Eye Weather

Fri, 24 Apr 2026 15:49:25 GMT

Ag markets were mostly lower early Friday, except cattle.

Cattle Bottoming?
Cattle futures were higher early Friday with follow through buying after a higher close Thursday.

Futures are trading back above key support areas on the charts so is the correction over?

Scott Varilek with Kooima Kooima Varilek says $243 was the line in the sand for the June live cattle or funds would liquidate.

“Well, we tested it. We broke it. Broke some short-term trend lines. So it was a little bit dicey for a minute. But then we were able to recover. I think it almost got to a spot where we’re saying, okay, we have some damage. Now what? What’s the follow-through? And then it just, kind of started gaining confidence slowly, able to close higher yesterday following through today,” he describes.

He says the market was overbought and due for a correction so he’s hopeful that has been completed especially since May is a strong month for beef.

Wild Ride Thursday
Thursday was the real test for the market for feeders as they went limit down for a time on talk that the beef plant in Fort Morgan, CO was not slaughtering cattle as workers walked off the job and were going to strike.

Varilek says the plant slaughters over 4,000 head a day and that story is still not fully confirmed.

“Yeah, and we’re all trying to find as much information on that as we can. And just like the last strike, hard to find it. It seems to be a little bit quieter. But yeah, they actually walked out at Fort Morgan and they canceled some loads, canceled their Thursday, Friday kills was what I had heard. And that they were planning on getting together with some talks. They were confident that. They might not take that long, you know, so that’s where we sit. More uncertainty, you know, thrown into this market. That’s one of the reasons that we really crashed.”

He says they will watch for developments over the weekend and see if there are still loads heading to the plant or not for clues.

“So if I would say right now, we’ll trade it like it’s more short term and not break the market because it isn’t a long term thing,” he adds.

Market Recovers as Rollins Cancels Arizona Event
The cattle market recovered well off the lows and closed back higher on Thursday on news that Brooke Rollins, Secretary of Ag, canceled her trip to Arizona on Friday alleviating the fears she might make an announcement about a reopening of the border to Mexican cattle.

He says, “The reason we’re able to recover maybe was because, you know, she had said no announcement last Friday and that she planned to physically to go herself to Arizona to you know, check things out. And so then we just kicked that can down the road.”

He says there have been more screw worm cases 60 miles south of the border which may have caused USDA to reverse course or delay a reopening.

Fed Cash Market Lower
The fed cash market was also pressured by this week’s lower cash trade at $246 in the both the South and North, plus some $386 dressed trade. Those are all $2 lower than the previous week.

However, with the board rebounding any additional cattle will likely be bought at $248 as producers have regained leverage.

“Packers were a couple dollars lower they’re sitting at $246 and not really moving just letting cattle come to them. I mean a few sales but now that this board has recovered some I think they’ve got what they’re going to get at $246 and if they’re going to want some they’re going to
have to start to move it up to $248, $250. There will still be plenty of guys that that want to get that,” he explains.

He says the market is just finishing up on yearlings. “You know these long day fed yearlings that you know we’ve had we’re not usually selling yearlings here in April but that’s the nature of the beast right now as we know how to make them bigger we’ve got cheap cost of gains the feeding weather is outstanding just these huge gains on these cattle then we’re going to crawl into that calf crop and they are not going to be carrying the weight that these yearlings were. So, that’s the thing that I alluded to about May that there’s always that old saying, never be short June cattle in the month of May.”

With Mother’s Day coming up he says demand will also be strong and so packers may need to move cash up.

Cattle Resilient
Varilek also points out the cattle market has been resilient through war headlines, the down in the stock market and even higher gas prices at the pump.

“We’ve talked about all of these other stories and I don’t know that war premium or the energy prices has really crept into the beef. I mean, we wouldn’t be trading cash cattle $4 off of the all time high if we were worried about the consumers, really getting strapped.”

Lean Hogs Bottoming?
Lean hog futures were lower on Friday with some profit taking after a mostly higher week but is the market bottoming?

Varilek speculates, “Yeah, we finally saw the cash and the cutout jump a little bit, provided us with a gap higher after the third leg lower, kind of been on the lower trade. That was some good action. It’s like, okay, maybe some respect, I guess,.”

But he points out numbers will really need to tighten for the market to justify the premiums in the deferred futures.

“We do see some of these deferred markets trading stronger than the front. We’re waiting on the cash. I think you get to July and August and they feel like, yeah, we want to rally. We think that we should. $135 to $150 feeder pigs you know weighing 40 pounds I mean these are big prices that you’re having to pay if you want to fill those barns and so that keeps telling us that the supply is tight, it’s not there we need higher prices,” he adds.

He says the May contract is at a pretty good discount to June and that gap usually narrows but it hasn’t happened yet.

“So, the proof has not shown up yet to get this cash market rally, to, you know, prove me right.”

Grains Mixed to Lower Trading Weather
Wheat futures broke out to some fresh highs on Thursday on drought and frost concerns but is setting back early Friday on profit taking and some rain chances in the extended maps.

Corn and soybeans are easing with wheat but are also waiting for more direction on weather according to Varilek.

“I think we are just waiting. You know, what are these weather patterns? There’s areas that are getting lots of rain, too much rain. And then there’s others that are just it’s so dry we’re having dust bowl weather. So, you can find what you’re looking for in the weather right now and that’s typical every year,” he says.

Ultimately he thinks the crop will get planted and it is too early to get concerned.

So beyond weather the grains will need another story and right now the war and inflation news could spark buying but just not yet.

Wheat Hits New Highs: Why Corn and Beans Could Not Follow

Thu, 23 Apr 2026 21:41:46 GMT

Grains ended mixed Thursday with wheat and corn higher, soybeans lower. Cattle and hogs were mostly higher.

Wheat Breaks to New Highs
Wheat futures saw a chart breakout and made fresh highs led by the hard red winter wheat futures which were up on the July contract 29 1/4 at $6.79 1/4, with July soft red winter wheat up 13 1/4 at $6.20 1/4.

Garrett Toay with AgTraderTalk says the HRW wheat market was adding weather premium with forecasts continuing to look hot and dry for the Southern Plains.

Can Wheat Continue to Rally?
Now that the wheat market has seen a technical breakout how high could prices run?

Toay says the charts look very constructive trading on a weekly continuation chart through the 200-day moving average of $6.75. “I mean, especially on that July Kansas City weekly chart. Now we open it up and, you know, it looks like there may be, you know, 40 or 50 cents, you know, 30, 40 cents, I should say, of upside follow through here.”

That opens up a move over $7 towards the May 2024 spike highs.

However, he says soft red winter wheat is getting pulled along for the ride.

“You also saw new contract highs in the KC Chicago spread, renewed concerns about drought, renewed concerns about the frost. You definitely have a kind of a tale of two wheat belts,” he adds.

However, he thinks the rally is may be capped by the fact that ending stocks are still ample and U.S. wheat prices are starting to be expensive on the world front.

Corn Barely Follows Wheat
Despite the big rally in wheat the corn market ended just a penny higher with July at $4.63 3/4.

Toay says the big supply keeps capping the rallies and the corn market doesn’t have a bullish story anymore if the war is ending in Iran.

“The Iran war started and everything got excited. So, you know, if the Iran war is getting in the final innings here, then we kind of revert back to that old story where there’s really not much of a story there,” he says.

Basis is firming on corn as farmers get into the fields especially as demand has been strong.

“So it’s a function of when does the farmer sell and move the remaining old crop stocks. And that’s probably going to happen here in the
next six to eight weeks for the most part. And then you’ve got another tranche of selling that will happen in July and August. So, you know, right now the farmer’s kind of uninvolved. They’re focused on, you know, getting the new crop planted. And, you know, so there’s really no story,” he explains.

Technically the market was held back on Thursday by lower soybeans.

Soybeans See Technical Selling
Soybean futures were lower again on follow through selling after the chart failure on Wednesday as the market went up to a 1/4 cent from the March high on the November contract and failed and July also could not break out of its sideways range.

“When beans are back testing their highs there just 24 hours ago, I mean, you had everything kind of firing on all cylinders. then we had the rejection and then everything fell apart you know you have to remember these markets are computer traded and they’re all tied together so that had a heavy influence,” he says.

Bean oil is still the strong leg of the soy complex with better than expected demand he remarks. “Considering the crush rates, bean oil is the straw that stirs the drink. And that’s still tied to the energy markets and crude approaching $100 a barrel again.”

So he’s not concerned about the key reversal scored in the bean oil market on Wednesday off the new contract highs because the market has already negated several of those.

“These bean oil stocks especially look at the the the last NOPA crush we had a record crush and bean oil stocks saw a draw so that that tells us that this demand for the product is extremely strong,” he adds.

Weather and Planting
Toay says so far planting is running ahead of the normal pace nationally but there have been some wet extended forecasts for the Midwest and Northern Plains that could slow planting.

He says the market doesn’t get concerned about impacts on national corn yield until May 10th or May 15th timeframe.

“So we still have some time, especially considering the size of the equipment that we have. But it’s going to be a struggle around here. I mean, looking out my backyard, I mean, we’re in northern Illinois. We had seven inches of rain last week. Things are just now starting to get fit. We’ve had three, four days of 80-degree weather and sunshine. And so we see sprayers out there and anhydrous ammonia bars. We’re in the area where probably 20%, 30% of the producers still put on spring anhydrous so that has to go on. So I think that there’s a lot of work to be done.”

China Meeting
Toay also thinks the soybean market is sensitive to the outcome of the mid-May meeting with China since the U.S. has not seen any new crop soybean business or any of the 8 MMT of old crop purchases announced by President Trump.

“Since President Trump mentioned the 8 million metric ton of additional purchases, I mean, they’ve kind of drawn a line in the sand that they’re willing to buy. U.S. ag products, but soybeans aren’t probably one of them. You know, the South American crop is big. It’s, what, six, eight million metric ton bigger than this point last year. You know they’re still cheaper than U.S. beans, even without the tariffs they imply. And, the private crusher isn’t going to want to buy anything out of the U.S.” he adds.

Toay thinks the quality of China’s corn crop was poor and they may need corn and they’ve been buying a lot of wheat. “Which they’re trying to blend off and feed. But, you know, export sales today, had 190 million metric ton of sorghum to China. That’s fantastic news, especially for producers in the Southern Plains,” he says.

The Iran war has also drug out longer than President Trump anticipated and is diverting his attention away from trade according to Toay. Still, USTR, Jamieson Greer reiterating this week that China wants to expand ag purchases.

Cattle Bounce or Bottom?
Cattle futures finally broke the six day streak of lower closes since the correction off contract highs on short covering.

The market saw early selling with news of a workers strike at the Ft. Morgan beef plant which slaughters around 4,000 head.

However, the market rebounded well off its lows as USDA Secretary Brooke Rollins canceled an appearance in Arizona schedule for Friday that had the market fearful of a border reopening announcement.

“With April expiration or first notice day coming up here and, you know, we’re right here at cash. So the back of my mind, we saw a similar type of price action in the last delivery cycle. And that idea hasn’t lost on me that we may see open interest liquidation by those who don’t want to participate into the delivery cycle or cash settle.”

Still cash is at $246, down $2 and the board is at $2.47 so he says the lows are in line with where cash cattle traded.

High Gas Prices and Consumer Demand
He adds that gas prices are still high at the pump even though crude oil has had a $20 to $30 break.

So he is concerned that beef prices may be too high relative to disposible income and consumers are trading down to cheaper alternative proteins like pork and poultry.

six weeks from a cattle perspective is that I realize it. beef prices are high.

Wheat Rallies on Weather but Fails to Excite Row Crops: When Will the Markets Trade Inflation?

Thu, 23 Apr 2026 15:57:23 GMT

Soybeans were lower early Thursday with wheat higher and corn trading both sides. Livestock were also lower.

Wheat Holding Weather Premium
Wheat futures were higher on Thursday after some profit taking and a lower close the previous session.

Darin Newsom, senior market analyst with Barchart, says wheat is holding weather premium with the deteriorating crop conditions.

“Given what we’ve seen this spring where the winter crops never really went into a full dormancy, at least that’s what I’ve been told. And then we had a warmer winter and they started growing again, then get hit by a March freeze, it grows again, gets hit by an April freeze and so on. So based on all of that and the fact that the drought readings across the Plains continue to worsen, then we could say, yes, this, you know, what we’re seeing here is likely a result of building some weather premium in,” he says.

Does the market needs to add more premium?

Newsom says old crop contract do not with the ample supplies of wheat around the world.

“The reality is if we look at the future spreads, we’re not seeing the commercial side of the market react like we’ve got a supply and demand scare anywhere on the horizon for both hard red winter or soft red winter. Even though I know there’s an asterisk attached due to soft winter being subject to the CME’s lower variable storage rate of 5 cents per bushel per month. We’ve got soft red winter future spreads covering 70% to 80% calculated full commercial carry, which is bearish, which tells us there is no supply concern in relation to demand.”

He says there are also some speculators that are looking at wheat as attractive.

Technically Wheat Unable to Take Out Resistance
Wheat futures have also been unable to take out recent highs which for July HRW wheat would be $6.63.

He says the only thing to get the market above those levels is a continued deterioration of the weekly crop ratings, which could trigger algorithms into buying.

Corn Holding as Farmer Selling Slow
The corn market put in three days of higher closes and is trying to push through resistance on the charts with the help of the wheat market but also slow farmer selling as planting ramps up.

He says that has taken some pressure off the cash market and basis has firmed.

“If we look at the National Corn Index, we see that it has been firming in relation to the futures market. So we know basis has been firming. Now, I say that, and it’s an interesting situation in the national average basis market for corn in the fact that it has been firming. We have seen the cash market pick up a little bit as sales have slowed and demand still is out there. But if we look at the big picture and we look at the previous five-year low weekly closes and 10-year low weekly closes, You know, the market’s still running below those levels. So we know overall national average basis is weak. This tells us there’s still ample supplies to meet demand. It’s just immediate term. Those supplies have slowed down. Farmers are doing other things. They’ve gone out to the field,” he says.

Corn Hits Chart Resistance
Exports were also strong on Thursday at 51.8 million bu. but the market is still running up into stiff chart resistance.

Funds are holding a large net long futures position in corn so with the market up into the upper end of the trading range it may spark some selling eventually he says.

“So when we get these rallies and when we start testing those high ends of the sideways range you know it’s probably going to generate some selling for lack of any real commercial support coming in,” he says.

Soybeans and Bean Oil Look Technically Weak?
Soybeans and bean oil were lower on Thursday morning after November beans put in a double top on the charts and bean oil made new contract highs and then ended lower, scoring a key reversal.

Newsom says that technical damage doesn’t mean as much as it used to with today’s algorithm traders but is still generating new selling in the market.

“The algorithms just simply don’t look at double tops and they don’t look at key reversals and they don’t look at these sorts of things in the soybean oil market,” he says.

The strength recently in soybean oil has been tied to the diesel fuel market which was cooling a bit Thursday morning and that was also weighing on futures.

Newsom also points out the speculators were holding a record long position in bean oil. “And so this normally opens the door to some liquidation and so beans are just along for the ride because there are no other changes in fundamentals.”

Beyond profit taking the soybean market continues to trade concern about the mid-May meeting with China and the impact the ongoing war with Iran will have on the outcome. Days when the war tensions rise it weighs on soybeans.

Grains Divorcing From War or Will Inflationary Buying Kick In?
With the exception of the the bean oil and canola markets, Newsom says the rest of the grain space has seemingly tried to divorce from the war headlines and energy markets.

“I don’t think the grain sector is really watching all of the changing headlines but it gets caught up in it you know once the headlines change or are manipulated for market moving reasons,” he adds.

The next key will be when does inflation risk start to be traded in the grain markets, especially if energy prices remain elevated?

He says, “I think grains are out there. They will be an opportunity, I think, that will be looked at with some of these new traders and inflation.”

There will also be inflation tied to higher input prices and Newsom says he doesn’t think the fund traders take that into account.

“But the commercial side of these markets will certainly take it into account. So let’s say that because of input costs, we’re going to even plant fewer corn acres. We’re going to start to see that if it’s a real situation, if it’s really happening, we’re going to see that in those deferred corn future spreads. And if more acres are going over to soybeans at a time when there’s a serious doubt about global demand for U.S. soybeans, then I think we’re going to see the opposite trade starting to develop. We’re going to see more carry being built into this soybean spreads. And a lot of this, again, will have to do with U.S. inflation, input costs, and so on,” he says.

But Newsom adds that bottom line the algorithms don’t care if U.S. producers can’t make money.

“Never have, never will. It’s just not important until it actually starts to change the supply and demand situation. And we’ll first know that through basis and spreads.”

Inflation Fear Keeps Interest Rates Flat
The fear of inflation will likely also mean no change in interest rates next week at the FOMC meeting.

“Yeah, the inflation fears probably have put any idea of a rate cut on hold for the time being. And as we look at the Fed fund futures forward curve, there’s nothing expected to happen now through the balance of 2026. Shortly after the U.S. President went to war on Iran, we saw the October-November futures contracts, or the Fed Fund futures contracts, dip to a point where it was indicating a rate hike, possibly this fall. So, but that’s been erased as well as, you know, the status quo settled in. Nothing really expected to change. We’re also going to, except for the fact that we’ll have a new chair, theoretically. And reportedly after this meeting, I think Chairman Powell’s term ends in May. And so, you know, then we’ll see what direction the Fed starts to take.”

Tight Margins, Tough Choices: How Row Crop Farmers Can Weather Today’s Financial Squeeze

Tue, 10 Feb 2026 20:16:39 GMT

Row crop farmers across the U.S. are facing a financial environment that leaves little room for error. Rising production costs, persistently high interest rates and commodity prices that have failed to keep pace are combining to pressure margins at nearly every level of the operation.

From the ag lending perspective, Alan Hoskins, president and national sales director at American Farm Mortgage and Financial Services, says the current cycle is forcing producers to rethink not just their numbers, but how they approach decision-making altogether.

During the 2026 Top Producer Summit, Hoskins says both farmers and ag lenders need to remember there’s a clear differentiation between profit and cash flow. And he says when it comes to cash flow, that’s something farmers should be looking at on a monthly basis.

“There are definitely a fair number of challenges out there,” Hoskins says. “When you look at 2026, the numbers don’t have the appearance of being better than what we saw in 2025.”

Input Costs Lead the Pain

Among the many pressures facing producers, Hoskins says higher input costs remain the most immediate and widespread challenge.

“Over the past few months, the increase in input costs is a significant driver in what we’re seeing across agriculture,” he says. “Commodity prices being where they are certainly contributes to that as well.”

Hoskins notes that while producers are keenly aware of rising costs, marketing decisions can sometimes compound the problem. In volatile markets, hesitation to price grain can leave margins exposed.

“There are times where there’s a little bit of inertia on the part of producers to take advantage of sales opportunities when they present themselves,” he says. “There’s always the hope that the margin will improve, but that’s exactly where a written marketing plan becomes extremely valuable.”

A marketing plan, Hoskins says, helps remove emotion from pricing decisions and provides structure during uncertain times.

Where Farmers Still Have Levers to Pull

Despite the headwinds, Hoskins believes producers still have meaningful opportunities to manage costs — particularly by scrutinizing inputs more closely.

“Looking at fertility levels across different farms and making sure you’re applying the proper amounts of fertilizer is one place to start,” he says. “Every field doesn’t necessarily need the same approach.”

He also encourages producers to evaluate field operations carefully, weighing whether a tillage pass truly adds value compared to alternative chemical applications.

“These are the kinds of decisions that, taken individually, may not seem significant. But collectively, they can have a real impact on the bottom line,” Hoskins says.

Insurance is another area he believes deserves renewed attention.

“With the increases we’ve seen in equipment values and real estate values, it makes sense to revisit property and casualty insurance,” he says. “There may be opportunities to adjust coverage levels and capture some savings without increasing risk.”

Financial Stress Is Real, And It’s Growing

From a lender’s vantage point, Hoskins says the financial strain facing row-crop producers is increasingly visible. While not every farmer lost money in 2025, many operations ended the year with thinner working capital and less flexibility.

“Were there producers who made it through 2025 without losing money? Yes, but they were more the exception than the rule,” Hoskins says.

Looking ahead, he doesn’t expect conditions to ease quickly. That makes proactive planning and communication critical.

“When challenges exist, don’t try to solve them on your own,” Hoskins says. “Use the resources available to you: your lender, your accountant, your advisers.”

He cautions against reacting too aggressively in ways that could harm long-term viability.

“The goal is to weather this cycle,” he says. “It’s not to cut the meat completely off the bone and compromise your ability to operate when conditions do improve.”

Adjustment to Higher Interest Rates

Higher interest rates remain a sticking point for many producers, particularly those accustomed to historically low borrowing costs. Hoskins says perspective is important.

“While rates are much higher than what we’ve been used to over the last 25 years, if you look historically, they’re not that far out of line with the last 40 or 50 years,” he says.

The bigger challenge, he adds, may be mental rather than mathematical.

“We were in a very low-rate environment for a long time,” Hoskins says. “Adjusting to today’s rates requires a shift in expectations.”

To adapt, he advises producers to closely examine their borrowing structure across operating loans, equipment financing and real estate debt.

“If you’ve got debt that’s been out there for 12 or 18 months, there may be opportunities to restructure,” he says.

He also encourages producers to take advantage of low- or zero-percent financing options on inputs when available and to maintain open communication with lenders.

“Your interest rate is a product of your risk profile,” Hoskins says. “Having honest conversations with your lender helps you understand where you stand and what options you have.”

Are More Farmers Exiting?

With margins compressed and financing tighter, Hoskins says some producers are choosing to exit the business, but for different reasons.

“There are producers looking at 2026 and even 2027 and saying, ‘I don’t see things improving materially,’” he says. “They don’t want to see any more working capital erosion or equity erosion, so they’re making that decision on their own.”

At the same time, Hoskins acknowledges others may not have a choice.

“There will be producers who are unable to obtain the funding they need to go another year,” he says. “In those cases, the decision to step away isn’t voluntary.”

Still, he does not expect a widespread collapse.

“I wouldn’t characterize this as something that’s going to be across the board,” Hoskins says. “But with the challenges we’re facing, we will see examples of both.”

Mindset Matters As Much As Math

While financial statements tell part of the story, Hoskins believes mindset plays an equally important role in determining how producers navigate difficult cycles.

“The key truly has nothing to do with numbers,” he says. “It has everything to do with mindset.”

Hoskins encourages producers to define clear goals, not just for the coming year, but over a longer horizon.

“What are your one-year goals? Your three-year goals? Your five-year goals?” he asks. “Having that longer-term perspective changes how you view short-term challenges.”

He believes producers who approach decisions with a clear sense of priorities tend to make more measured, sustainable choices.

“When you understand your priorities as people first and foremost, you start looking at the financials differently,” Hoskins says. “That ultimately leads to better decisions.”

USDA Numbers Confirm the Reality

USDA issued its first net farm income forecast for 2026 just last week, but the bigger surprise was the fact the agency revised its net farm income forecast for 2025, showing sharper declines than earlier estimates. Hoskins says those revisions align with what they are seeing on the lending side.

“It doesn’t surprise me that USDA lowered 2025 farm income,” he says. “As more data becomes available, it gives a clearer picture of where reality really lies.”

While the outlook remains challenging, Hoskins stresses agriculture has endured difficult cycles before.

“We’re not going to lose all of America’s farmers and ranchers,” he says. “But we do have challenges within this industry that need to be addressed.”

For producers willing to plan ahead, stay disciplined and lean on trusted advisers, Hoskins believes there is still a path forward, even in one of the tightest margin environments in recent memory.

Atlanta Fed Chair Bostic Recognizes Sectors of Agriculture Are in Crisis

Tue, 10 Feb 2026 00:19:55 GMT

Is an economic crisis brewing in farm country? That’s the question Raphael Bostic, outgoing president and CEO of the Federal Reserve Bank of Atlanta, is watching as balance sheets carry over operating expenses into the 2026 season.

“There’s a lot of distress in agricultural marketplaces and in a lot of our agricultural enterprises,” Bostic says. “I do think there’s a significant crisis here.”

During a fireside chat at the 2026 Top Producer Summit , he recognized the challenges facing farmers in today’s financial environment.

“I get to talk to a lot of smaller family farms and I worry about them, especially because the big operations, they are so large scale, it gives you a diversity of possible strategies,” Bostic explains. “You can tap into different types of credit that can allow you to weather volatility a bit more readily, and we don’t see that for a lot of the smaller folks.”

To help, USDA is set to release $12 billion in “ Farmers Bridge Assistance ” payments toward the end of the month.

“This is a short-run patch on something that could be a long-run problem,” Bostic says.

Rising Expenses and the Growing Debt Burden

USDA is expecting net farm income to be $153.4 billion, which is down $4.1 billion from 2025. Economists say this year’s latest outlook continues to reflect declining receipts and an ongoing reliance on help from the government, which is expected to increase by 45% in 2026 alone.

“Total production expenses are forecast to increase almost $5 billion or 1%,” says USDA economist Carrie Litkowski. “On the farm sector balance sheet, assets, debt and equity are all forecast to increase.”

The latest Purdue University - CME Group Ag Economy Barometer in January found 21% of farmers surveyed expect their operating loan to increase over a year ago. Of those, a third say it’s because they’re carrying over unpaid operating debt from the prior year. In 2023 that number was only 5%.

“We know that input prices for a host of products are up,” Bostic says. “We know that competition at a global level is up. We know that the tariffs have put tremendous pressure on the competitiveness of American products overseas because of those dynamics, and we also know many commodity prices haven’t changed to offset these things. These are all incredibly challenging dynamics to wrestle with, and how we move forward is really an open question.”

Fed Policy: Why Patience is Required for Rate Cuts

The Fed’s primary mandate of stable prices and maximum employment provides an environment with predictable growth, giving people the opportunity to invest for the long haul without having to worry about where the economy will be in five to 10 years.

“First we have to diagnose the problem,” Bostic says. “Is this an issue with labor availability, an issue in new technology or shifting climate patterns, etc., and then we need to think about what strategies will work for all of these new things.”

That mandate requires patience in seeing how current monetary policy impacts the market. Bostic notes inflation remains above the Federal Reserve’s target of 2%, but economic growth has been and will continue to be robust. One thing he’s not advocating for is a continuation of interest rate cuts.

“The government shutdown actually prevented a lot of data from being produced, so it is actually going to make the numbers a bit choppier in the next several months,” Bostic explains. “The usual signals we would get from those [reports] are actually going to be weaker than they would be otherwise. For me, that’s another reason why I think we want to be cautious. We want to be patient, and I think that’ll be prudent.”

Patience ahead of additional rate cuts would allow the Federal Reserve to see how tax cuts and deregulation stimulate growth into 2026 before cutting rates, which could spur inflation even further above the Fed’s target.

At the 2026 Top Producer Summit, Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta, joins Bill Watts, Pro Farmer editor, to share insights into the economic forces shaping monetary policy and what that could mean for agriculture.

(Farm Journal )

The ag economy is seeing similar challenges to the economy as a whole. Bostic remarks while the top end of the economy is doing remarkably well, there is a growing number of U.S. consumers who are living paycheck to paycheck, evidenced by the increased rhetoric around a K-shaped economy. That has made itself evident in the ag economy by higher consolidation, with big farms getting bigger and smaller farms going out of business.

“This economy has continued to perform well at an aggregate level; consumers have continued to be resilient, and that’s a good thing,” Bostic says. “My outlook is that the resilience we’ve seen for much of 2025 will continue into 2026 and might even get a bit stronger, so we might actually see some of the tax benefits, some of the deregulation, those things could actually spur the economy to do even more than what it did last year.”

Consolidation and the Transformative Potential of AI

The latest red flag, a sluggish labor market has Bostic waiting on data and wondering if technology or AI are having an outsized role in the current new-hire economy.

“When you think about AI, for example, and those technologies, businesses are experimenting with ways to have AI introduced into their production processes to allow productivity that doesn’t require people,” Bostic admits. “You may have heard reports about a lot of entry-level hiring has happened at a much lower pace than it has in previous years. A lot of that is because the promise of AI has folks thinking, well, maybe I don’t need to do those hires, and I can get that same amount of productivity. That’s a structural change.”

From a farming perspective, those opportunities are also presenting themselves. Given the current challenges in agriculture, Bostic says it might be time to look at new ways to build toward the future.

“To the extent that work can be done, that is, generative, without necessarily needing a person to be there all the time, that’s potentially transformative,” Bostic says. “I know the day is long, seasons are hard, and if you can use technology to take two hours out of it that gives you space to do other things. The opportunity there is what do you do with that extra space?”

Farmers Face Budget Squeeze And Balance Sheet Challenges—Echoes Of A Decade Ago

Tue, 30 Dec 2025 21:12:38 GMT

If heading into 2026 feels a little like déjà vu, you’re picking up the same vibes Chris Barron, president and CEO of Iowa-based Ag View Solutions, is experiencing. He believes the next couple of years will echo the last big downturn farmers weathered a decade ago.

“It’s kind of scary that 2025, ’26 and ’27 look essentially like a repeat of 2015, ’16 and ’17,” Barron says. “If you remember that time frame and made it through, buckle down because I think we’re going there again.”

He says one of the clearest signals farmers are about to experience a repeat of a decade ago is based on the 2026 cost-of-production data from Ag View Solutions’ clients, who are based in 23 U.S. states and three Canadian provinces:

Soybeans: About $11.87 per bushel based on a 65-bu. average yield
Corn: About $4.69 per bushel (before basis) on a 223-bu. average, with many growers needing at least $4.85.

Some growers raising non-GMO seed beans or getting premium contracts can still make soybeans compete. But for many farms, soybeans are the weak link in the current economic cycle.

Right now, Ag View Solutions clients are expected to plant roughly 62% of their acres to corn and 38% to soybeans for 2026 — essentially the same as 2025. Barron says he doesn’t expect many acres to shift away from this mix to more soybeans “unless something really changes.”

Given current price relationships and crop insurance guarantees, Ag View Solutions data shows about a $50-per-acre advantage to corn over soybeans for the year ahead. Even if the dollars trend lower, he says corn often pencils out better because of gross revenue and risk management tools.

More Cost Pressures Heading Into 2026

It’s no secret production costs are increasing heading into the next season. Some of the key factors include:

Overhead costs (what Barron calls ‘”return to management”) for family and employee expenses, including phones, fuel and business-paid personal expenses, are up nearly 5%. After the past year or two of what Barron describes as hard belt-tightening, he says deferred spending is “snapping back” at higher levels.

Land rents are holding mostly steady, supported by higher property taxes and outside investor demand.

Interest expense is climbing as operating lines grow.

Fertilizer costs are a mixed bag. On corn, fertilizer costs are up about 7%, even though Barron believes most farms are staying with removal-rate applications. On soybeans, he says fertility costs will be lower, mainly because growers are putting less fertilizer on their bean acres and leaning harder on corn nutrients.

Machinery and equipment costs are also inching higher for the year ahead.

This Is Not A Repeat Of The 1980s

Despite the “red” many farmers will see on their spreadsheets in the year ahead, Barron says the current period is not a repeat of the 1980s farm crisis, for two key reasons:

Farmer equity is strong. Debt-to-asset ratios remain healthy for many U.S. growers, even if cash is tight.
Many farmer exits are voluntary. Today, many farmers are choosing to retire or scale back in order to protect equity.

Barron offers a recent example: “I got a call the other day on 7,000 acres, a 45-year-old farmer saying, ‘I’m not going to do this anymore. I’ve got a $5 million equity position, and I’m not going to go for a couple more years and chew away another million dollars. I’m just going to be done.’”

Strategies for the Current Climate

To survive — and potentially thrive — in this “repeat” cycle, Barron suggests focusing on these four areas in the year ahead:

Do the high-dollar work. Barron says the “$500-an-hour” work is crunching numbers in the farm office. “Know your true costs, stress-test budgets, analyze each profit center. A few hours spent with good numbers can be worth far more than another round in the tractor,” he says.
Protect yield. He advises against cutting seed, chemistry or other inputs that protect or enhance yield “just to save a few cents per bushel.”
Right-size your operation. Barron says some of the most successful turnarounds he’s seen with operations lately have come when farmers “right-sizes” — they’re doing less, but doing it better — instead of trying to be everything to everyone.
Use collaborative models. Barron says he is seeing more farmers share equipment and labor with their neighbors to spread fixed costs without extra capital.

Opportunity Will Still Knock

During a Top Producer podcast, Barron told Host Paul Neiffer that the tight times ahead will create new land-rent opportunities for some farmers who want to expand. What commonly happens when margins get tight is some farmers pull back, and that’s when expansion possibilities open up for others.

“We’ve had numerous clients call us about opportunities to rent land and not like in small amounts. When times are tight and when things aren’t good, that’s when these opportunities present themselves,” he says.

Barron’s message for those farmers in expansion mode: have your numbers, working capital and lender relationships in order now, so if the right block of ground comes available, you can move quickly and confidently on it.

If you’re interested in the ROI spreadsheet Barron’s team uses to analyze market trends, email cbarron@agviewsolutions.com .

Hear the complete discussion between Barron and Flory on Farm Journal TV . Also, you can listen to the Top Producer podcast discussion between Barron and Neiffer at the link below:

Ag Economists Warn of Lingering Farm Economic Strain: ’Not the 1980s, But Close’

Thu, 23 Oct 2025 22:35:01 GMT

The October Ag Economists’ Monthly Monitor paints a tough picture for U.S. farmers heading into 2026: weak trade demand, stubbornly high input costs and continued consolidation across agriculture. While experts say today’s challenges don’t match the full-blown crisis of the 1980s, most agree the current downturn is dragging on with few signs of a quick turnaround.

“High input costs and the inability of domestic soybean crush growth to offset lost Chinese demand” continue to weigh heavily on profitability, one economist explains.

Another adds: “The lack of trade opportunities, and high input costs, are doing the most damage right now.”

A third economist sums it up more bluntly: “Margins are collapsing, and optimism is evaporating fast.”

By the numbers, here are highlights from the latest Ag Economists’ Monthly Monitor.

(Lori Hayes )

Conditions Expected to Continue or Worsen Into 2026

One of the major themes in the latest survey is the fact negative margins could be a theme for row crop agriculture for the foreseeable future.

Nearly 60% (59%) of economists say the farm economy is worse off than a month ago, and almost 90% believe it’s weaker than last year. 76% expect the situation to persist or even worsen through 2026, while only a quarter expect any improvement in the next 12 months. As one economist puts it: “It’s not a collapse, but it’s a grind.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

Others emphasize the fatigue setting in across the countryside.

“Farmers have been absorbing higher costs for two years without any real recovery in prices,” says one respondent.

“That wears on you,” another adds. “It’s like death by a thousand cuts — not one thing is breaking the farm economy, but everything’s contributing.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

With nearly eight out of every 10 economists surveyed projecting conditions to persist or worsen over the next 12 months, Ben Brown, University of Missouri Extension economist, says it reiterates the concern that farmers could face more tough decisions next year.

“I think the expectation for conditions to stay challenging shows up in multiple points of the responses, just this continued downturn and extended pressure on farm finances absent some type of market rally. Maybe that’s a yield shortfall due to drought somewhere in the world. But absent of that, I think we’re this slow grind lower trying to figure out how to find an equilibrium point where producers are looking at moving cropland out of production, maybe putting it to more pasture or CRP,” Brown says. “Long story short, we’re looking for any of those available measures that reduce production enough to help rally prices.”

Even livestock markets, one of the few bright spots, come with caveats.

“Livestock returns have been better than nearly anyone expected at the beginning of the year,” one economist notes, “especially cattle and hogs.”

But another warns: “If consumer spending slows down, beef and pork demand could take a hit, and that changes the outlook quickly.”

Echoes of the 1980s — But Not the Same

While 69% of economists say today’s farm economy shows similarities to the 1980s crisis, most stress the safety nets are stronger now.

“There are far more safeguards today: crop insurance, FSA loan programs and countercyclical payments,” one economist says.

Still, they caution against complacency.

“While farm bankruptcies may increase, it’s not likely to reach the 1980s level,” another economist adds, “but let’s not understate how bad things are now.”

Another adds: “The lack of profitability for row crops and the number of farmers exiting the industry — that’s what feels eerily familiar.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

One economist offers a sobering parallel, saying: “Things are bad — even if it’s not the same type of bad as the ’80s. The difference is this time, it’s a slow burn instead of a crash.”

University of Missouri’s Brown says the similarities between now and the 1980s are glaring: Profitability and working capital have eroded for several consecutive years.

“That liquidity issue is really starting to impact some of the broader financial indicators,” he says. “That’s what’s similar [to the 1980s] is the tight liquidity margins. We’ve seen farm bankruptcies start to take up as well. They’re not as high as what we saw during the 1980s yet.”

Yet, Brown points out there are some clear differences, as well as indicators, such as land values, that signal this period is vastly different from the 1980s.

Farm Consolidation Pressures Mount

Nearly all economists see continued consolidation reshaping rural America. In the September survey , 91% of ag economists said they expect the current situation to accelerate the current rate of consolidation in agriculture. In this month’s survey, economists think this will cause fewer, larger farms, fewer service centers and higher barriers for beginning farmers.

“Larger operations will get larger, and we’ll lose some of the diversity that smaller producers bring to the industry,” one respondent says.

Another adds: “Fewer, larger farms mean fewer families in rural communities — and less political and economic diversity.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound )

Some economists express concern over how this trend could alter the future of farming.

“Higher barriers to entry for young farmers, dwindling rural populations and loss of local ag suppliers — that’s where we’re headed,” one respondent warns.

Another sums it up: “We’re becoming a nation of mega farms. That’s efficient, but it’s not healthy.”

Livestock Outlook Still a Bright Spot

Nearly half of the economists expect the cattle bull market to continue for another 19 to 24 months, while others see a slowdown by late 2026 as herd rebuilding begins.

“At current prices, we’ll see no or little herd expansion,” one economist warns. “Clear signals that domestic beef production is increasing may be the key catalyst for a market top.”

October Ag Economists’ Monthly Monitor

(Lindsay Pound )

Others were more optimistic, saying the current supply and demand picture will continue to provide fuel to the current cattle market.

“Tight supply and strong global demand could keep this market higher for longer,” one respondent writes, “but beef demand depends on consumers continuing to open their wallets.”

Another adds: “The market’s got legs — but it’s walking on thin ice.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

It’s key to note this survey was conducted prior to President Donald Trump saying the U.S. would start importing more beef from Argentina, while also suggesting the White House is working to bring beef prices down . Once that news broke this week, the cattle markets crashed, sending cattle futures limit down.

Why are U.S. farmers and ranchers furious about the Trump administration’s new allegiance with Argentina? Arlan Suderman says it’s all part of a 3D chess match with China. He explains the complex relationship, and the impact on U.S. farmers and ranchers, in the video below.

Trade Troubles Deepen

China’s cooling appetite for U.S. ag products remains a major worry. The October survey found 76% of economists believe China won’t return to 2022 purchasing levels, and 88% say pre-trade-war demand is gone for good.

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

“China has been working toward deleveraging from the U.S. for two decades,” one expert says. “This is the culmination of a long-term process.”

Another wrote: “China will not purchase U.S. ag products unless it has to; it will always prefer other suppliers.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound )

The biggest winner? Brazil. When asked who’s winning the trade war between the U.S. and China, 100% of economists said Brazil.

“Brazil has definitely benefited; it’s literally being handed additional market share,” another economist notes.

Others agree: “Make Brazil great again — that’s what’s happening,” one quips. Several economists warn if the U.S. doesn’t aggressively pursue new markets, “our export position could permanently erode.”

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

Looking Ahead

Despite stronger farm balance sheets and fixed-rate debt, the mix of low profitability, high costs and global oversupply continues to pressure producers. Labor shortages, rising cash rents and limited trade growth are adding to the strain.

“Rising cash rents are eating into margins faster than yields or prices can recover,” one economist says.

Another points to policy fatigue: “There’s too much focus on short-term trade aid and not enough long-term market strategy.”

As one respondent summarizes: “Things are bad, even if it’s not the same kind of bad as the 1980s. We’re in a long, grinding cycle — and patience is wearing thin.”

Survey High: 91% of Ag Economists Say Crop Sector in Recession, Losses Likely Through 2026

Fri, 26 Sep 2025 17:15:47 GMT

The financial squeeze gripping row crop agriculture is only growing more severe, according to the latest Ag Economists’ Monthly Monitor. As of September, 91% think the U.S. crops sector is in a recession, which is an all-time high for the anonymous survey, and few see relief in sight.

In July, 53% of ag economists responded agriculture was in a recession. That number was 72% in May .

Economists point to low grain prices, high input costs and trade uncertainty, especially with China, as t he biggest drags on the farm economy . Beef prices are providing some cushion, but economists say it’s not enough to offset row crop challenges.

“2025 is bringing negative returns for at least the third consecutive year across nearly all row crops, with 2026 setting up to be another negative returns year.”
“Multiple years of low to no profitability qualifies as a recession to me.”
“We are near record low prices and record high inputs.”
“Net farm income is consistently negative.”
“I fear that commodity prices may have found a ‘new normal,’ so adjustments may have to occur (painfully) on the cost side.”

Those economists who say row crop agriculture is not in a recession point to land values and cash rents as the main reasons.

“The U.S. crop sector is losing working capital, but cropland values are showing little weakness, either in terms of rents paid or cropland prices. Until the latter two start to weaken, the sector is not in a recession,” said one economist. “I understand government payments from crop insurance, commodity programs and ad hoc assistance are a key reason, but government payments have been a constant presence over the last 10 years. They are a second source of income. You cannot simply ignore them in answering this question, especially given the changes made in the 2025 farm bill.”

Consolidation Concerns Continue

As more farmers face financial collapse , 92% of economists think the situation will accelerate consolidation.

“We are currently in a sustained period of high costs and low prices across the crop sector — this will cause some farmers to go out of business sooner than expected.”
“Hard times drive us toward higher efficiencies, which often leads to consolidation.”
“Larger producers are likely to have more wherewithal to sustain losses than smaller producers.”
“The most efficient and well-capitalized producers will survive and absorb land from the least efficient producers.”

2026 Could Be Another Year of Negative Returns

46% of ag economists say the economy situation is “somewhat worse off” compared to last month and 27% say it’s “much worse off” compared to last year.

(Lindsey Pound, September Ag Economists’ Monthly Monitor )

Nearly half (46%) of ag economists say the ag economy is somewhat worse off in September compared with August, and 27% say it’s worse off versus 2024.

The outlook for next year is mixed. Fifty percent say it will be somewhat worse off or unchanged, while the other half expect the situation to slightly improve. Most economists expect continued financial stress into 2026, with projected losses of $100 to $199 per acre for corn and $100 to $199 per acre for soybeans.

Producers are Looking to Cut Costs

The September Ag Economists’ Monthly Monitor asked what is the most likely cost-saving option for producers for the upcoming year.

(Lindsey Pound, September Ag Economists’ Monthly Monitor )

Farmers are postponing major equipment purchases, a trend that’s plagued the equipment industry the past two years. The latest Association of Equipment Manufacturers (AEM) report for August 2025 showed U.S. tractor sales fell 8.2% and combine sales dropped 34.6% compared with August 2024.

With the majority of economists forecasting the row crop side of agriculture to produce negative margins in 2026, farmers could be looking to cut back even more. Other than reducing machinery purchases, the majority of ag economists (85%) think farmers will slow technology upgrades. Fifteen percent say farmers will reduce fertilizer use. None of the economists surveyed think farmers will sell farmland.

The China Effect on the Ag Economy

Economists say the lack of export demand from China is having a negative impact on U.S. agriculture. In fact, 77% of economists surveyed say current U.S.-China trade policies are hurting farmers. Half of the respondents (54%) in the September survey think China will buy soybeans in 2025.

Even though China has bought zero new crop soybean cargoes from the U.S., more than half of economists still think China will come to the table in 2025.
(Lindsey Pound, September Ag Economists’ Monthly Monitor )
“We have a demand problem — or more specifically we have a demand access problem,” said one economist.
“Record high cattle prices are helping to offset the challenging conditions for grain producers. Uncertainty related to China, trade policy and tariffs [is a major risk].”
“The long-term damage to our trade relations. It will take years to solve,” was another response.

Possible Economic Aid for Farmers

As China remains absent from buying U.S. soybeans , it’s having a negative impact on soybean prices. Areas that rely heavily on China’s business, such as the Northern Plains, are seeing cash soybean prices in the $8 range.

Secretary of Agriculture Brooke Rollins said Wednesday an economic aid package for farmers has been the focus of conversations at the White House. Some type of program and payments will be announced very soon, Rollins said, and while void of details, she promised such announcement will be made “in the next two weeks.”

President Donald Trump also made remarks in the Oval Office Thursday, saying he will use tariff revenue to bail out farmers.

“We’re going to take some of that tariff money that we made, we’re going to give it to our farmers, who are, for a little while, going to be hurt until the tariffs kick into their benefit,” Trump told reporters. “We’re going to make sure that our farmers are in great shape because we’re taking in a lot of money.”

62% of ag economists say direct payments like the Market Facilitation Program benefit crop producers.

(Lindsey Pound, September Ag Economists’ Monthly Monitor )

Considering the factors impacting farmers, such as trade policy, interest rates, commodity prices and input costs, 62% of ag economists said government direct payments benefit crop producers. Fifteen percent say such payments wouldn’t adequately address the challenges, while 23% think a different approach would be more effective.

Overlooked Issues in Agriculture

Ag lenders in some regions, such as the mid-South, warn farmers are experiencing the most financial stress since the 1980s . While the issues are at the forefront of conversations, the latest survey also asked economists to chime in on other agricultural issues currently being overlooked:

“The increasing percentage of farmland that is owned by absentee, non-operators … I’m seeing more investor activity, creating greater competition with actual operators.”
“Storage problems in the northwestern Midwest due to a lack of trains moving soybeans to the PNW.”
“The risk to the U.S. farm economy of weaker global economic growth … there is a broader set of macroeconomic uncertainties that affect world demand for agricultural products.”
Interest rate impact on asset values (not borrowing costs).
“Macroeconomic uncertainties that affect world demand for agricultural products, many of which have little or nothing to do with U.S. policies.”
“Tax rollover and the fact that even with significant losses, many taxes will become due this year.”
“The benefits of trade. I know it is talked about a lot, but it’s still not enough relative to how important it is.”

Ag Lender Warns Farm Finances Under Greatest Stress Since the 1980s

Fri, 19 Sep 2025 16:12:17 GMT

As combines chew through this year’s crops, farmers are faced with a bleak reality: this crop they’re harvesting is coming at a steep financial loss. And for some, this marks the fourth year in a row they won’t make any money.

“What the general public doesn’t realize is these things have not just occurred over the last six months. This started in 2021 and 2022,” says Tommy Young, who farms in Newport, Ark. “In our particular situation, we started noticing shortfalls in 2021 and 2022 simply because of the input costs.”

That worry and concern took center stage and was at the heart of a meeting in Brookeland, Ark., earlier this month. A meeting that was supposed to be just a handful of farmers at a local bank turned into more of a movement. And for farmers, there was one resounding message: We need help, and we need it now.

“I think when everyone, other farmers, started seeing how many farmers showed up, it changed the overall dynamic of the meeting. It made it become emotional. It made it become more than reverence, from the standpoint that it made me feel personally that I’ve not done anything wrong,” Young says.

‘It Felt Just Like a Funeral’

In the middle of harvest, farmers from across Arkansas, southern Missouri and Tennessee parked their combines to attend the meeting. Young says as he parked his vehicle and saw trucks lining the road and lines of people standing outside to get in, the somber mood became very real.

“It felt just like a funeral,” Young says. “And then when we got inside, you didn’t see signs being held up. You didn’t hear screaming or any kind of thing like that. You saw people that were genuinely concerned about the industry as a whole.”

Young says during that meeting, the frustration farmers voiced came down to three main concerns within the ag economy:

Record-high input costs
Low commodity prices
The loss of key export markets

It’s those three factors fueling a perfect storm, but farmers are considerably concerned about the record-high input costs and what’s fueling those in agriculture.

“All we can do is hope for the best, be as efficient as we possibly can be with what we’re doing, and then thinking things would change. Well, they have not changed. They’ve gotten worse,” Young says.

Ag Lender Says Farmers Are Seeing the Most Financial Stress Since the 1980s

Greg Cole is president and CEO of AgHeritage Farm Credit Services, which serves roughly 6,700 members across 24 counties in Arkansas. Cole started in ag lending in 1984, and he says as Arkansas farmers stare at loss on every crop they grow, it’s not a repeat of the 1980s, but it’s eerily similar.

“I can tell you this, this is the most stress I’ve seen since the ‘80s when you come to farm profitability, i.e. farmers losing money,” Cole says. “One positive we have now compared to the ‘80s is land values. Our land values are still positive, which gives some lendable equity —unlike in the 80s, when I started my career, when U.S. farmland prices plummeted in some areas up to 60%.”

With a drastic drop in commodity prices, but input prices still record or near-record high, Cole says farmers in Arkansas, specifically, have been eroding balance sheets for four straight years.

“We started seeing losses in ’22 when 40% of our producers lost money,” Cole says. “In ’23, about 50% lost money. And then last year, in ’24, 70% lost money, with the average loss of about $150 an acre. And that’s after they received about a $50 per acre ECAP payments. Today, we’re looking at where we stand now. We could have a similar level of losses in ‘25 that we had in ‘24. Even though in ’24, we had very strong yields. But now we have weaker yields.”

As mounting debt shows up on the balance sheets, Cole says there are two types of farmers seeing the most severe financial strain.

“The ones who rent most of the land, especially if they pay on the higher end of rent. And here in the Mississippi Delta, most farmers who have a lot of acres rent most of their ground,” Cole says. “And then young, beginning farmers who didn’t have the opportunity to build up a lot of equity. Those are the ones that have occurred these multiple year losses where their balance sheet debt has swollen to a level that’s hard to service a debt when you add the interest rate cost on top of it.”

Farmers On the Brink of Being Forced Out of Farming

Cole says in talking to farm credit colleagues from across the country, next to the central valley of California, farmers in the Mississippi region are in the most severe shape.

“There were 62 farm equipment sales in eastern Arkansas this past winter,” Cole says. “That’s the most I can recall, anecdotally speaking, than any time in my career since the 1980s. And I think what we’re looking at now is at least that many or more. It could be double that if we don’t get major intervention in the markets or an intervention from D.C.

Cole continues: “Really, what we need is another ad hoc payment, maybe in a form of an MFP-type payment that we received back in Covid. But we need some major help here, or we’re going to have a lot less farmers in 2026 and 2027.”

It’s a desperate plea across agriculture. Without some type of market or government intervention, some could be forced out of farming this year — similar to what happened in the 1980s.

“My dad, in 1978, went to Washington D.C., stood on the capitol and was there during that time when they drove tractors to D.C.,” Young says. “It was the same thing in Brookeland, Arkansas. And if this thing continues, I think it will go nationwide because we’ve got to get through this. And the president and congress have got to make it to where we have good markets, sustainable markets and markets that we can depend on long term.”

Largest Drop in Crop Cash Receipts Ever

It’s not just farmers in the Delta seeing the financial strain. Ag economist John Newton tells AgDay’s Michelle Rook that even though the overall net farm income picture from USDA looks strong, it’s a very different situation when you take out livestock and just look at crops.

“If you look at the data, crop cash receipts over the last three years have declined by $71 billion,” says Newton, executive head of Terrain. “When adjusted for inflation, that matches the largest decline that we’ve seen in history. So, the pressure in the crop space is very real.”

NCGA and ASA Also Sounding the Alarm

National Corn Growers Association (NCGA) is also sounding the alarm , saying agriculture is nearing a financial crisis. According to a new study released by NCGA, nearly half (46%) of U.S. farmers believe we are on the brink of a farm crisis, and 65% are more concerned now about their farm financials than a year ago.

American Soybean Association (ASA)CEO Stephen Censky also sees and hears the growing concern among farmers.

“It’s tough, and I can hear it in the stress in our members’ voices Our members and our board of directors are really concerned right now,” Censky says. “Some say if things don’t turn around, if we don’t get markets back or if we get economic assistance — which is not our first choice — this could be their last year in farming. That’s pretty scary.”

Censky says this time in agriculture is more serious than the last trade war simply because crop prices are lower than they were in 2018, and input prices are significantly higher.

“I will say while those programs we had, the market facilitation payments (MFP), they help keep folks in business. They stop the blood loss. They help farmers survive until the next year, but it’s not a replacement for markets,” Censky says. “And no farmer wants to be dependent on getting his or her income from the government, or from the mailbox, rather than from the marketplace.”

Farmers are also voicing frustration lately that when government assistance is given, they are simply a pass-through. The payments keep input prices elevated, and also seem to prop up high land values.

“One of the things is that when you provide economic assistance or any kind of government payments, whether that is through the reference prices and the ARC and PLC programs under the farm programs, yes, that helps. It helps keep farmers in business and helps them pay the bills. But longer term, any form of government assistance like that gets capitalized into land rents and land values, and that has consequences as well for farmers,” Censky says.

Yet, Censky was part of the Trump administration. He served as the United States Deputy Secretary of Agriculture from 2017 through 2020. That was also during the first trade war with China, and he knows the loss of the Chinese market is completely out of farmers’ control.

“We have not been publicly calling for another MFP-type program. Our priority has been ‘Let’s get a deal with China on soybeans’, because having that market is what soybean farmers want,” Censky says. “And by restoring and getting rid of the retaliatory tariffs, and ideally getting some purchase commitments from China, would be like we did under the Phase One trade deal with China. That would be great. And that also puts a lid on, or a damper on, Brazilian expansion, which has long-term benefits for the U.S. soybean industry as well.”

Lift the Fog: 4 Drivers of Farm Profitability To Watch in 2025

Fri, 20 Jun 2025 19:13:36 GMT

What is the status of the general ag economy? On the surface, strong livestock prices and recent government payments are making the farm sector look more positive than reality. Here are four drivers of farm profitability to watch this year and a glimpse into 2026.

There’s More Than Meets The Eye
As highlighted by Farmer Mac , an aggregate view of the agricultural economy doesn’t give a clear view of the driving forces and notably, the unknowns surrounding trade policy.

Farmer Mac highlights how the strength of the U.S. dollar might be the largest driver of commodity price movements over the past several months. A stronger dollar can make U.S. commodities more expensive on the global market, whereas a weaker dollar can lead to higher domestic prices.

Input Costs Vs. Commodity Prices
“The grain complex is under a lot of pressure,” says John Newton with Terrain Ag. “USDA just released their new cost of production estimates for 2026. We’re looking at record input costs for a number of crops. And commodity prices aren’t showing any signs of really rebounding.”

Per USDA, per-acre cost of production for corn in 2026 is forecast to be $915.51 — up from $897.44 in 2025. For soybeans, cost of production per acre is forecast to be $650.34 — compared with $639.15 in 2025.

Newton says the $30 billion in ad hoc payments to farmers approved by Congress is helping farmer sentiment and the ag economy’s health.

“Looking to the next year, that ad hoc support is not guaranteed to be there. Hopefully there’s more ‘farm’ in the farm bill because that’s also retroactive to the 2025 crop year. But again, input costs are projected to increase. Every single category is projected to be higher next year than this year. The only category projected to be lower is interest expenses,” he says. “Looking forward to 2026, it’s going to be a tight margin environment unless we get some strong tailwinds in agriculture.”

For livestock producers, the lower commodity prices have continued to bring lower feed costs. Specifically for swine feed costs, 2024 ticked downward , with lower costs expected through the rest of the year.

Interest Rates and Farmer Credit Health
“It’s a cash flow situation in the ag sector. That’s why they’re holding off on any large expenditures if they can. That’s the name of the game, which is why Congress has to approve a farm safety net. If they don’t, we’re in a world of hurt in the ag sector,” says Jim Wiesemeyer, a Washington policy analyst.

Earlier this week, the Fed left interest rates unchanged.

“I think the Fed is locked in, and it could be September at the earliest, if not October, before they actually have the data they want to begin cutting interest rates,” Wiesemeyer says.

Newton agrees.

“They’re waiting for inflation to heat up. They’re waiting for if unemployment is going to heat up. We continue to beat expectations on all of those,” Newton says. “We had negative GDP growth the first quarter. If that continues — if unemployment ticks up, if inflation ticks up, that’s what they’re watching for.”

Meanwhile, using data from the first quarter, the KC Fed released a report showing deteriorating ag credit conditions. Ty Kreitman and Morgan Mastrianni point to data showing how demand for farm loans continued to grow as farm finances tightened, but credit availability was steady. From their report, more lenders say they had tighter credit standards — the highest in over a decade.

USDA’s Next Net Cash Farm Income Report
In September, USDA will release its update on Net Cash Farm Income (NCFI).

“A knee-jerk reaction might be that USDA is likely to reduce its forecast for NCFI in September,” said a Farmer Mac report. “The reality is numerous factors influence farm sector revenues and profits.”

New Warning Signs Agriculture Is In A Recession

Thu, 27 Mar 2025 21:43:07 GMT

ADM and Syngenta are just two of the latest companies to announce layoffs in the agriculture sector. They join a long list of equipment manufacturers, seed and chemical companies and other agribusinesses who are restructuring and laying off employees to weather the current challenges in the ag economy. These are just the latest signs of a glaring reality: the U.S. ag economy is in a recession.

According to Farm Journal’s March Ag Economists’ Monthly Monitor, 62% of ag economists think the row crop side of agriculture is already in a recession. The survey of nearly 70 ag economists from across the country has been tracking the concerns of a recession for months, and as consolidation consumes agriculture, it’s a reminder of the fallout that comes with a downturn.

“Low cotton and wheat prices are a real disaster,” said one economist in the anonymous survey. “Corn and soybean prices continue to move around with some increases ahead of planting lately but they are not at great levels.”
“A recession is a sustained period of economic decline. We may not be able to say the entire agriculture sector is in recession, but the row crop sector has been in economic decline since 2022 and looks like that will continue into 2025,” another economist responded.
“Costs have outpaced revenue for some time now, and recent policy shifts are unlikely to alleviate that pressure,” one economist responded.

Recession concerns in agriculture

(Lindsey Pound )

One economist pointed out net returns are as tight as they have been since 2007, but even then, there are still 38% of economists who don’t think the row crop side of agriculture is in a recession.

“There are folks struggling for sure; however, this is part of the ebbs and flows of commodity agriculture. The difference this time is there was not as much liquidity saved during the good years to assist in the bad years. Therefore people are having to pull back,” one economist said. “ I don’t think the crop sector is in a recession because producer continue to be the dominant buyer of land and crop acreage estimates do not currently anticipate the American producer is going to drastically pull back on planting a crop. If we were in a recession, we would see declining land prices and people would be pulling back on production; neither is happening.”

Growing Concerns Among Ag Lenders
Eroding balance sheets are a concern echoed by agriculture economists, as well as ag lenders across the U.S.

“The end of the year last year was rough, but looking at projected cash flows for ‘25, we see that looking even worse,” Alex McCabe, agribusiness loan officer for CUSB Bank based in Iowa told “U.S. Farm Report.” “It’s unrealized, of course, but definitely looks like it could be a challenge.”

“Most have held together, but working capital has taken a hit,” says Tim Homan, relationship manager for Rabobank. “You’re a lot more confident in your balance sheet when you have good working capital with whatever comes along. It gets a little more nerve racking once that safety net on your balance sheet falls off.”

Concerns About More Consolidation Ahead

Consolidation concerns

(March Ag Economists’ Monthly Monitor )

With the majority of agriculture saying agriculture is currently in a recession, it lends itself to another tough reality: consolidation could continue. Eighty-five percent of economists who responded to the March Ag Economists’ Monthly Monitor said they think the current situation will accelerate consolidation not only on farms but also agribusinesses.

“Farmers who rent land, and some who own land, are not able to generate enough revenue to cover loan obligations and have to liquidate. Those who own land will likely be the ones to weather the economic downturn we are in,” one economist said.
“A sustained period of high costs and low prices will likely result in some farmers going out of business sooner than expected, which may be due to point of financial need or stopping by choice ahead of that. When farm consolidation is accelerated, there are fewer farmers buying inputs. Even those the acres are the same, fewer input retailers are needed to serve the customer base. Also, have greater pressure on the whole industry as big farmers grow,” another economist responded in the anonymous survey.
“Higher cost producers may be leaving the industry because they have to, not because they choose to,” one economist said.
“The agricultural industry has long valued hard work as a fundamental principle of it’s demographic makeup. For a while, government programs and loosening credit conditions have allowed people to receive more for less work. That is changing. I continue to hear conversations with ag service providers that they are focusing on those producers that are willing to put in the business planning themselves and not expecting someone else to do it for them. The process consolidates the sector by removing those that are inefficient and unwilling to do the work,” said another economist.

Another economist in the Ag Economist Monthly Monitor pointed out that when you look out there at available credit, the situation seems okay, but there are some reports out there of lenders having to deny loans.

“I don’t believe it’s widespread, at least not in my area,” said Homan, who is an ag lender in central and northeast Iowa. “There are probably certain areas that have been hit harder by weather and harder by price than what we have.”

No New Farm Bill as a Backstop
Those areas that are particularly struggling are the ones that rely heavily on rice and cotton, and without a farm bill, farmers in the south are worried the financial pain will accelerate in 2025.

Farm Bill timing

(Lindsey Pound )

The March Ag Economists’ Monthly Monitor also asked economists when they think Congress will pass a new farm bill. While just over one-third of economists think there’s still a chance to get a farm bill during the second half of 2025, 42% now say it could be 2027 before Congress passes a new farm bill.

“It’s really tough,” one farmer located north of Lubbock, Texas told Farm Journal. “Honestly, if I could get 50¢ on the dollar, I would sell out today. I’ve never been more disappointed. It’s not just commodity prices, but the fact we don’t have a farm bill that has been a real backstop for so long. We have used insurance way too much, and it’s just not sustainable anymore.”

Your Next Read:
92% of Ag Economists Say the U.S. is Already in the Middle of Another Trade War

Do Tariffs Work? Leading Ag Economists Weigh In

Mon, 03 Feb 2025 17:00:00 GMT

Tariffs are a tool used by President Donald Trump during both his terms. But do they work? Not even ag economists are in alignment, as the answer seems to be: It depends.

This past weekend, Trump signed three executive orders for tariffs , the first time a president has used powers granted under the International Emergency Economic Powers Act of 1977. The orders also include retaliation clauses that would ramp up tariffs if the countries respond in kind. Trump cut the levy on imports of Canadian energy to 10%.

By Monday morning, Trump had agreed to delay tariffs on goods from Mexico for one month to allow more time for negotiations. The agreement happened just hours before the tariffs were set to take effect.

President Claudia Sheinbaum said U.S. tariffs against Mexico will be delayed for one month after a conversation with Trump on Monday. Trump then confirmed the news on Truth Social.

Which Input Could Be Impacted Most by Tariffs?

Tariffs on the U.S.'s top three trading partners could have a major impact on agriculture. The January Ag Economists’ Monthly Monitor asked economists which input is most at risk. The top answer was fertilizer.

Ag Economists’ Monthly Monitor

(Lindsey Pound)

“From a headline standpoint, it’s probably potash,” says Samuel Taylor, farm inputs analyst, Rabobank. “We get 85% to 90% of our potash from imports from the Canadian market. The residual is made up by Russia and Israel, in principle, with some other markets coming in.”

One day after Trump announced he would move ahead with planned tariffs, Prime Minister Justin Trudeau stated tariffs targeting $30 billion in American products, such as alcohol, produce, household goods and industrial materials, will roll out in two phases starting Feb. 4, the same day the U.S. tariffs are set to begin.

The tariffs on the other $125 billion worth of goods will come in 21 days to allow impacted Canadian companies to adjust their supply chains. Trudeau emphasized Canada’s response would be “strong but appropriate,” while also considering non-tariff measures such as restrictions on critical minerals.

Do Tariffs Work?

With tariffs and a potential trade war brewing that begs the question: Do tariffs work?

It’s something Farm Journal asked the nearly 70 ag economists part of the Farm Journal Ag Economists’ Monthly Monitor. The survey asked economists: “Do tariffs work in trade policy?” Economists views were mixed:

“Tariffs can work in trade policy — that’s why nations continue to use them. The complex part that extends beyond the tariff action is potential long-term repercussions that can result from trade flow changes.”
“In limited cases, typically only if they result in a policy response in the targeted country. Much of the time, tariffs are like cutting off one’s nose to spite one’s face.”
“Tariffs provide short-term gains but have always failed relative to free trade in the long term.”
“Absolutely, when properly applied.”
“Not over the long term. They tend to affect who gets to supply different markets around the world.”

The Ag Economists’ Monthly Monitor also asked: “When tariffs are used as a ‘tool’ in trade, who pays the tariff?” Not all economists were aligned on that answer either, saying sometimes it’s farmers and consumers, but it can also be the exporting countries.

“When the U.S. imposes tariffs on imports, importers in the U.S. pay taxes to the U.S. government on their purchases from abroad. When another nation imposes tariffs, importers in that nation pay import taxes to their government on their purchases from abroad. Often, when a tariff is implemented, another nation retaliates, and you end up with importers in both nations paying the price on whatever products the tariffs apply toward.”
“If an importing country places a tariff on the exporting country, producers in the exporting country and consumers in the importing country both lose (i.e., receive lower and higher prices, respectively). Conversely, producers in the importing country and consumers in the exporting country win (i.e., receive higher and lower prices, respectively).”
“In the short run, consumers who purchase goods with a tariff might see higher prices if the tariff is not absorbed elsewhere. In the long run, the tariff might result in changes to the supply chain that result in higher prices but also create other economic opportunities in America (e.g. reshoring of domestic manufacturing).”
“The correct economist answer is: It depends. Tariffs drive a wedge between prices in the exporting country and in the importing country. It depends on the circumstances of particular markets and how much is reflected in higher prices in the importing country and reduced prices in the exporting country.”
“Both the exporting nation and the importing consumer pay some portion of the tariff depending on who has more flexibility to adjust to trade barrier. If exporting countries can easily switch to supplying other markets, they won’t have to ‘pay.’ If consumers can easily find cheap substitute goods, they won’t have to pay.”

USDA Says Farm-level Egg Prices Could Jump Another 45.2% in 2025 Due to Avian Flu

Fri, 24 Jan 2025 19:51:30 GMT

The January 2025 Food Price Outlook released Friday shows while food price inflation has slowed overall, key sectors like eggs and beef remain volatile due to supply chain and input cost pressures.

Egg prices saw the biggest spike, according to USDA’s data, up 37% year-over-year. But the U.S. Bureau of Labor Statistics data shows the price of Grade A eggs in December was up 93% since January 2024. And when you look ahead, USDA expects outbreaks of highly pathogenic avian influenza to continue to cause egg prices to climb.

When it comes to USDA’s specific outlook released Friday, the agency uses recent trends in food prices based on Consumer Price Index (CPI) and Producer Price Index (PPI) data through December 2024.

Key Highlights of the report include:

Overall inflation trends:
- Food prices increased by 2.5% year-over-year as of December 2024
- Food-at-home prices rising by 1.8% and food-away-from-home prices increasing by 3.6%.
2025 forecasts:
- Food prices expected to rise by 2.2%, slower than the historical average.
- Food-at-home prices predicted to grow by 1.3%, while food-away-from-home prices are forecast to increase by 3.6%.
Insights Within Categories:
- Egg prices saw a sharp rise of 36.8% year-over-year in December 2024, with 2025 prices projected to climb by 20.3% amid ongoing supply constraints.
- Beef and veal prices are expected to increase modestly by 1.5% in 2025, following a 4.9% rise in 2024.
- Pork and fats/oils prices are forecast to decline in 2025, with decreases of 0.8% and 1.6%, respectively.
- Fresh fruit prices are anticipated to rise by 0.7%, while dairy product prices are expected to increase by 1.3%.

Producer Price Insights:

The PPI, which tracks wholesale prices, suggests continued volatility in farm-level and wholesale markets, with significant fluctuations predicted for eggs, milk, and fruits due to factors such as extreme weather and disease outbreaks. Farm-level egg prices are expected to see a sharp increase of 45.2% in 2025, with a wide prediction interval reflecting uncertainty.

Overall, while food price growth is expected to moderate compared to recent years, specific categories remain susceptible to sudden price shifts driven by global and domestic factors.

What’s the Deal with Egg Prices?

Sticker shock with eggs stared shoppers in the face to end 2024. According to the U.S. Bureau of Labor Statistics, the increase is even more staggering. They show the average cost of a dozen Grade A large eggs was $4.15 in December, up from $3.65 in November and $2.15 in January 2024.

According to livestock economists at Texas A&M University, the widespread outbreaks of highly pathogenic avian influenza, or HPAI, continue to be the culprit, driving egg prices to record highs across the U.S. Commercial laying flocks have been hit especially hard.

“There is seasonality to egg prices based on demand, but the cutting of supplies, in this case by disease, has driven prices higher,” says David Anderson, Ph.D., AgriLife Extension economist and professor in the Texas A&M Department of Agricultural Economics . “I wouldn’t be surprised to see them go higher in the next report, but there is price volatility when you consider the supply and demand factors in play.”

USDA’s Animal and Plant Health Inspection Service reports since first detected in 2022, 1,410 flocks have been impacted, including 637 commercial operations. As a result, 134.7 million birds have been culled.

Georgia Hit for First Time By Avian Flu

Just last week, the largest poultry producing state in the nation reported its first case of avian flu. The Georgia Department of Agriculture confirming the virus at a farm in Elbert County. In reaction, the Georgia Depart of Agriculture says all poultry exhibitions, swaps, meets and sales have been suspended as a precaution. The Department says cleanup is currently underway and nearby operations are under quarantine.

According to Greg Archer, Ph.D., AgriLife Extension poultry specialist and associate professor in the Texas A&M Department of Poultry Science , one reason the HPAI is spreading so quickly is because of environmental conditions. According to Archer, the disease prefers temperatures below 90 degrees.

“Farmers take biosecurity seriously because they’ve been dealing with the threat for years,” he said. “The big question this time is the strain mutations and how outbreaks in poultry facilities are occurring.

Archer also says migratory birds have historically been the main carrier of the disease. The pathogen will enter the poultry house through migratory bird feces on the bottom of the show or by a truck of vehicle that transports materials or feed between farms.

The Time It Takes to Rebuild

Once a flock is hit, the operation culls the animals, and replacing lost birds takes times. According to Archer, it can take 20 or more weeks for birds to develop from incubated eggs to pullets to production-ready laying hens.

In some cases, entire farms are wiped out. Archer says farmers bring those farms back online in phases to stagger their production by new and older birds.

As they do so, the eggs produced by younger and older birds are typically smaller while hens in their prime lay large to jumbo eggs.

And the key in building back the supply of eggs in the U.S., according to Archer, is rebuilding the flocks impacted by avian flu.

The other recent wild card, is recent transmission patterns in new animals, including dairy cows and pigs.

Consumer Demand and the Unknown

Now the question is how much consumers are willing to pay, and if it will impact demand?

“Producers will be expanding their flocks to produce more eggs to meet demand and capitalize on the high prices, while consumers might cut back,” says Anderson. “That combination aligning with fewer instances of avian influenza as the weather warms up would likely put downward pressure on prices. There is a natural ebb and flow to egg prices from seasonal supply and demand, and HPAI has just added volatility to the market.”

Farm Management New Year’s Resolutions for 2025

Fri, 29 Nov 2024 14:00:00 GMT

We asked past Top Producer award winners to share what’s new for them in the coming year. Here are some of the responses they shared with us:

“For the first time, we planted all our acres going to corn or soybeans next year to a cover crop. It is not the first time we have planted cover crops, but it is the first time we have done that many acres.” ~Bill Came
“We are hiring more people for the same amount of tractor seats. We are scheduling much better. We do this for two reasons — younger employees don’t want to work as much as they used to. Most used to work six days a week 10 years ago and now they are happy with four days a week. The second reason is ag overtime has passed in Oregon, so in order to manage overtime, we manage hours.” ~Shelly Boshart Davis
“We are continuing to expand the intensity of revenue acres by converting more conventional acres to organic production.” ~Pat Duncanson

“We’re going to reduce our soybean acres and increase our corn, winter wheat and cow-calf operation with these acres. We feel this will increase profitability.” ~Kelly Garrett
“I want to do a better job of promoting the extremely nutritious vegetable (yes, a vegetable) we call a potato, whenever possible. When choices appear relating to the value of spending time at work or with family, personally, I really need to do a better job of prioritizing, and therefore choosing, family time. After all: which one is more important?” ~Gregg Halverson
“For the first time in 39 years, I want to sidedress nitrogen on all of my corn acres.” ~April Hemmes

“Things that we need to do next year are straight out of the Danny Klinefelter playbook. We will focus on controlling cost in a high inflation/low price world. We’ll look for money under rocks — diversify revenue streams. We’ll leverage technology and new practices to become more efficient. It’s time to manage debt carefully in a high-interest environment, and it’s time to plan for the long term. This is a valley, don’t lose focus on the long-term plans of the operation.” ~Jeremy Jack
“I will physically and mentally execute and implement a succession plan for our farm to transition to the next generation.” ~Pam Johnson
“My resolution is that if you want to sell things at my farm, you need to reduce pricing by 15%. For those who say that is too sharp a cut, I say “try on my boots.” Price increases were easy on the way up. Now it’s time to reduce or be replaced.” ~Ben Riensche

“We’re going to buckle down and conserve operating cash and be conservative with inputs in anticipation of Trump tariffs negatively impacting our markets and prices like his last administration. We are considering replacing some aging storage and increasing our capacity. There are no plans to update equipment; just keep what we have operating. We will probably increase our vegetable acres in anticipation of low grain prices.” ~Jennie Schmidt
“We purchased life insurance and invested cash in a flex plan, so we can cover and service the debt if I am not around.” ~Trey Wasserburger

How Higher Interest Rates Could Impact Farmers in 2025

Tue, 05 Nov 2024 17:49:00 GMT

The Federal Reserve is expected to cut interest rates this week, which would mark the second time this year. However, the Fed’s decision to cut the benchmark interest rate last month is only providing relief on short-term rates. The mid- and long-term rates have actually gone up, not down.

“The market trades the two-year break-even inflation rate — the expectation of what inflation’s going to average over the next two years,” says Arlan Suderman, chief commodities economist with StoneX Group. “In the last six weeks or so, we have seen it jump a full percentage point. That is a significant short-term jump, saying that reinflation fears are coming back in a hurry.”

Suderman points out the Fed can influence mid- and long-term rates, but the agency can’t control them. Concerns about inflation are pushing those rates back up again.

“That could all change over the next couple of weeks, or it could be reinvigorated,” Suderman says. “Longer term, what I’m looking for is a return to the interest rates we saw in the ‘90s and early 2000. But I think there’s going to be a lot of volatility in getting there.”

Real Rates Move Higher

Krista Swanson, lead economist for National Corn Growers Association, says the day before the September FOMC meeting the 10-year Treasury was at 3.63%, but today it’s 4.21%.

“There are a number of reasons the 10-year Treasury is rising,” she says. “Among those, are market expectations for the Fed to slow rate cuts as recent macro data has reduced recession fears. Investor moves are showing growing confidence in the U.S. economy. In other words, the market is driving real interest rates higher, despite the lower federal funds target range. The federal funds rate is the interest rate that banks charge each other to borrow funds overnight.”

Like Suderman, Swanson says the Federal Reserve can influence the interest rates farmers/consumers/businesses pay on loans through changes in the Fed Funds Rate. However, the amount charged by the lender to the customer includes a spread (their profit) and depends on borrower specific factors such as credit score, size of loan, type of loan, loan term, etc.

Interest Rates

(NCGA)

The Interest Rate Wildcard and Impact on the Ag Economy

When you look at what could impact both livestock and row crop producers the next six months, a major wild card is interest rates. The October Ag Economists’ Monthly Monitor asked economists how much farm interest rates need to fall to find economic stability for farmers, and 46% said 2%.

The Monthly Monitor also asked economists to list topics or stories that could impact agriculture over the next 12 months but aren’t currently getting covered by the media enough. Some economists say it’s interest rates.

“I think one of the things is the return to higher interest rates, which is what we’re seeing play out and how that could negatively impact agriculture at a time when it’s struggling from depressed prices and lingering high input costs,” Suderman says. “As higher interest rates continue that impacts not only your operation costs, your operating note expenses, etc., but it also increases the cost of storing grain, whether you could pay off loans or put that money into interest. All that has an impact on your marketing and marketing strategies.”

Dr. Vince Malanga on U.S. Economy

Dr. Vince Malanga, president of LaSalle Economics, signals future economic stability might be threatened by conflicting survey data, recent steepening of the yield curve and a federal deficit near 7% of GDP.

The real GDP grew at a 2.8% rate during the summer, with inflation at 1.8%, signaling strong corporate profits if sustained, Malanga says. Federal spending and consumption were key drivers, he adds, while trade and construction underperformed. Although business investment was stable, external events such as hurricanes and strikes had an impact.

Malanga also points out long-term rates might be rising due to investor concerns over fiscal sustainability, potentially signaling discontent with growing federal red ink. Housing markets showed signs of a recovery but were negatively impacted by rising rates.

Both presidential candidates have not focused on addressing the deficit, favoring tax cuts and subsidies instead, Malanga adds. The Federal Reserve, which has traditionally stayed clear of fiscal policies, might need to step in, he believes, with Chair Powell likely considering whether to counter deficits or monetize debt.

Malanga’s bottom line: The sustainability of the current growth and low inflation relies on fiscal responsibility and economic adjustments moving forward.

Election Impact on Ag

Ahead of the election, the Ag Economists’ Monthly Monitor asked economists which presidential candidate will be more effective at taming inflation. Fifty-three percent said Donald Trump.

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

How Do You Know When Agriculture Is In A Recession?

Wed, 04 Sep 2024 18:28:29 GMT

Agriculture can sometimes act as a buffer during broader economic recessions, as demand for essential food items tends to remain relatively stable. However, when multiple indicators align, it can signal a recession in the agricultural sector.

According to analysts and economists, pay particular attention to the following:

Declining farm income. A significant drop in net farm income is a major sign. For example, USDA forecasts another major decline in farm income for 2024, on top of the big decline in 2023. That would be the largest ever two-year decline.
Sharply declining commodity prices. Weak prices for major crops and livestock products can indicate economic trouble for farmers. Crop prices have seen sharply declining prices, with the meat sector showing continued strength.
Elevated input prices costs. When input costs such as fertilizer, fuel and labor remain elevated while commodity prices fall, it squeezes farm profitability.
Reduced agricultural exports. Slowing exports and a growing trade deficit in agriculture can signal economic challenges. USDA forecasts the third straight year of a U.S. ag trade deficit , with the fiscal year 2025 at $42.5 billion.
Debt vs. cash flow. Increasing farm debt relative to cash flow combined with higher borrowing costs due to interest rate increases can strain farm finances.
Weakening credit conditions. Lower repayment rates on farm loans and increased loan renewals/extensions can indicate financial stress.
Declining demand for agricultural products. Reduced consumer spending on discretionary food items during broader economic recessions can impact certain agricultural sectors.
Falling farmland values. Higher interest rates and lower farm profitability can lead to downward pressure on land prices .
Increased inventory levels. Growing stockpiles of crops and livestock products can spur further price declines.
Widespread financial stress. When a large number of farmers across different regions and commodity sectors experience financial difficulties simultaneously it can point to an industry-wide recession.

Your Next Read: More Than 50% of Ag Economists Now Think the U.S. Ag Economy is Already In a Recession

Harris Unveils Her Economic Agenda Ahead of the DNC This Week

Mon, 19 Aug 2024 20:35:26 GMT

Democratic National Convention begins Monday in Chicago. The cost of Vice President Harris’ new proposals is uncertain, but the Committee for a Responsible Federal Budget (CRFB) estimates the plan would increase deficits by $1.7 trillion over the next decade.

The 2024 Democratic National Convention (DNC) in Chicago begins Monday and will be a significant event, with key activities and speakers planned.

An estimated 50,000 people are expected to visit the convention, according to the DNC, and the theme that will guide programming through the four nights of the convention is “For the People, For Our Future.”

Nomination and key speeches:

Vice President Kamala Harris, who has been nominated as the Democratic presidential candidate, will deliver the final speech on Thursday. Her running mate, Minnesota Governor Tim Walz, will speak on Wednesday. The convention will feature a ceremonial roll call since Harris and Walz have already been confirmed as nominees through a virtual vote.

Harris Unveiled Economic Agenda Ahead of DNC

Friday in Raleigh, North Carolina, Vice President Kamala Harris announced a comprehensive economic agenda she said is aimed at reducing everyday costs for Americans in what she calls an “opportunity economy.” She also hit back at Donald Trump’s plans to impose large tariffs on all imported goods, dubbing it a “Trump tax.”

Trump responded to Harris’ tax attack: “A tariff is a tax on a foreign country, that’s the way it is, whether you like it or not. … It’s a tax on a country that’s ripping us off and stealing our jobs. And it’s a tax that doesn’t affect our country.”

Harris’ controversial and populist proposals include a federal ban on price gouging for groceries, $25,000 in down payment assistance for first-time homebuyers, and tax incentives for builders of starter homes.

Harris also plans to expand the child tax credit to up to $6,000 for children in their first year and broaden the earned income tax credit for lower-income workers without children. (This followed a suggestion earlier this month from Sen. JD Vance (Ohio), the GOP vice-presidential nominee, that the credit be raised from $2,000 per child to $5,000.)

Additionally, she aims to lower health insurance premiums through the Affordable Care Act and build 3 million new housing units.

Harris emphasized her commitment to fighting high costs in food, housing, and healthcare, and outlined her plans for the first 100 days in office if elected president.

She also addressed the need for a stable business environment with clear regulations and criticized former President Donald Trump’s economic policies.

The cost of Vice President Harris’ new proposals is uncertain, but the Committee for a Responsible Federal Budget (CRFB) estimates ( link ) that the plan would increase deficits by $1.7 trillion over the next decade. This figure could rise to $2 trillion if Harris’s housing policies, initially intended to last four years, were made permanent.

Harris’ price-gouging plan would include authorizing the Federal Trade Commission (FTC) to impose large fines on grocery stores that impose “excessive” price hikes on customers, her campaign said. This approach is intended to deter companies from engaging in excessive price hikes that are not justified by increases in production costs. The FTC’s role will include investigating corporate practices and imposing financial penalties on violators, similar to how state attorneys general enforce state-level bans.

Details to come, but… While the specifics of how price gouging is defined and regulated are not fully detailed, the proposal draws inspiration from existing state-level bans, which typically involve prohibiting significant price increases during emergencies or sudden supply-demand imbalances. However, Harris’ proposal may not require an emergency condition to trigger enforcement, reflecting a broader application to address ongoing price increases in the grocery sector.

Determining whether a price increase is excessive, particularly in the context of grocery price gouging, is a complex task for the Federal Trade Commission (FTC). The process involves several steps and considerations:

• Data collection and monitoring: The FTC collects and reviews data on prices to identify unusual changes. This involves comparing current prices to historical data to spot anomalies that might indicate excessive increases not justified by market conditions.

• Econometric models: The FTC uses econometric models to analyze pricing data. These models help determine whether price changes are anomalous compared to historical trends and whether they result from market-driven causes or other factors.

• Market analysis and investigations: When price increases do not appear to be market-driven, the FTC may consult with other agencies, such as the Energy Information Administration, and state Attorneys General to discuss potential actions. This could include opening investigations to determine if anticompetitive practices are involved.

• Defining excessive pricing: Defining what constitutes an “excessive” price increase is challenging. The FTC must balance consumer protection with the need to allow firms to cover costs and invest in the market. The agency may look for evidence of manipulation or practices that lessen competition to justify enforcement actions.

Cost estimates

(CRFB)

• Economic and social policies: Harris is expected to provide more details of her economic policy plan which she unveiled Friday in North Carolina. It includes expanding child tax credits, banning price gouging, and lowering prescription drug costs. These themes will be central to her campaign message and the party’s platform. Harris is expected to offer more policy details than her Republican counterparts, who largely avoided specifics in their platform. By doing so, she aims to showcase the Democrats’ commitment to substantive governance and provide voters with a clearer sense of their plans. However, Harris is likely to carefully navigate the level of detail she provides, ensuring she avoids being locked into positions that could become controversial or politically damaging later. This approach allows her to address key issues and differentiate the Democratic platform from the Republicans’ while maintaining the flexibility to adjust or refine policies as needed. Harris wants to strike a balance between offering enough detail to appear substantive and informed, while remaining vague enough to avoid potential pitfalls that could arise from more rigid commitments.

On other issues:

• Inflation: Kamala Harris is taking steps to distance herself from the economic challenges faced under President Biden’s administration, starting with a frank admission that inflation has significantly impacted the cost of living for American families, particularly in areas like food, gas, and housing. Her acknowledgment resonates with concerns across the political spectrum, even drawing an approving response from the Trump campaign, which used her remarks to underscore the difficulties Americans are facing.

• Border security: Recognizing Donald Trump’s advantage in polling on immigration issues, Harris has begun to emphasize a tougher stance on border security. Her recent ad campaign focuses on plans to hire more border agents and crack down on issues like fentanyl trafficking and human trafficking. While this approach is more assertive than previous Democratic positions, it stops short of Trump’s more extreme measures, such as mass deportations. Nonetheless, this marks a significant shift in the Democratic Party’s stance on immigration over the past four years.

• No tax on tips: On the same day she secured the endorsement of Nevada’s influential Culinary Union, Harris committed to eliminating taxes on tips, a move designed to appeal to working-class voters. This promise has sparked anger from Trump, who had made a similar pledge two months earlier, highlighting the competitive nature of the race to appeal to labor groups and service industry workers.

• No fracking ban: Harris continues to maintain a position of “strategic ambiguity” on energy issues, particularly regarding fracking. While she previously supported a ban on fracking on federal lands, she has since softened her stance, likely to avoid alienating voters in key swing states like Pennsylvania. This shift reflects the importance of energy policy in the upcoming election and the need for Harris to balance environmental concerns with economic and electoral realities.

• Protests and security: Protests are expected, particularly concerning the Democratic Party’s stance on the Israel-Gaza conflict. Designated protest areas have been established near the United Center, with Union Park being a primary location for demonstrations. In response to the expected protests over U.S. policy toward the war in Gaza, Harris will likely navigate a delicate balance. While she has attempted to show greater empathy toward the suffering of Palestinian civilians compared to President Biden, this has not been sufficient to satisfy protest groups that are demanding a complete reversal of U.S. support for Israel. Harris could emphasize the importance of a diplomatic solution to the conflict and the U.S. role in facilitating peace talks, hoping to address the concerns of protesters while maintaining the administration’s broader policy objectives. However, given the intensity of the opposition from some protest groups, which seek a more drastic change in U.S. policy, her efforts may only partially quell the discontent. The protests are likely to continue, with demonstrators pushing for more substantial shifts in U.S. foreign policy.

Prominent Speakers During DNC:

Monday, Aug. 19:

• President Joe Biden will speak on the opening night. Biden is expected to make defense of democracy and his partnership with Vice President Harris the central themes of his prime-time address. (Reuters reported Saturday First Lady Jill Biden is likely to join her husband on stage.)

• Former Secretary of State Hillary Clinton will address the convention.

Tuesday, Aug. 20:

• Former First Lady Michelle Obama

• Former President Barack Obama will deliver remarks

• Illinois Governor J.B. Pritzker

Wednesday, Aug. 21:

• Former President Bill Clinton will speak before Minnesota Governor Tim Walz, who will deliver his vice-presidential acceptance speech.

Thursday, Aug. 22:

• Vice President Kamala Harris will close out the convention with her presidential acceptance speech.

U.S. Consumer Prices Rose Moderately in July; Annual Increase Slows to Below 3%

Wed, 14 Aug 2024 14:20:05 GMT

U.S. consumer prices rose moderately in July and the annual increase in inflation slowed to below 3% for the first time since early 2021, further strengthening expectations the Federal Reserve will cut interest rates next month.

The report from the Labor Department on Wednesday added to a mild increase in producer prices in July in suggesting that inflation was firmly back on a downward trend. That should allow the U.S. central bank to focus more on the labor market amid growing concerns of a sharp slowdown.

“The relay race to Fed cuts is on,” said Lindsay Rosner, head of multi-sector fixed income at Goldman Sachs Asset Management. “The Fed is on track to cut some amount in September, and we’ve got two more legs of this race to go.”
The consumer price index increased 0.2% last month after falling 0.1% in June, the Labor Department’s Bureau of Labor Statistics said. The rise was in line with economists’ expectations. A 0.4% increase in shelter, which includes rents,accounted for nearly 90% of the rose in the CPI. Shelter costs increased 0.2% in June.

Food prices gained 0.2%, matching June’s rise. Gasoline prices were unchanged after falling for two straight months. In the 12 months through July, the CPI increased 2.9%. That was the first sub-3% reading and smallest gain since March 2021. Consumer prices advanced 3.0% on a year-on-year basis in June.

Annual consumer price growth has moderated considerably from a peak of 9.1% in June 2022 as higher borrowing costs cool demand. While still elevated, inflation is moving towards the Fed’s 2% target.

The odds of a half-percentage-point rate cut at the Fed’s Sept. 17-18 policy meeting are around 59%, with the remainder of bets on a quarter-percentage-point drop, according to CME Group’s FedWatch tool. The rate pricing mostly reflects the jump in the unemployment rate to near a three-year high of 4.3% in July.

Economists, however, argue the labor market would have to deteriorate considerably for the central bank to deliver a 50-basis-point reduction in borrowing costs. The fourth straight monthly increase in the jobless rate was mostly driven by an immigration-induced rise in labor supply rather than layoffs.

The Fed has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range for more than a year, having raised it by 525 basis points in 2022 and 2023. Excluding the volatile food and energy components, the CPI rose 0.2% in July after rising 0.1% in June.

In the 12 months through July, the core CPI advanced 3.2%. That was the smallest year-on-year increase since April 2021 and followed a 3.3% gain in June.

“Unless the global economy experiences another shock, the Fed will most likely cut rates by a quarter percent in September,” said Jeffrey Roach, chief economist at LPL Financial. “The probability of the Fed cutting by a half percent is still elevated since investors are still somewhat skittish from recent events.”

(Reporting by Lucia Mutikani; Editing by Paul Simao)

There Are New, Early Signs of Ag Sector Financial Pressure

Tue, 13 Aug 2024 17:18:30 GMT

Agricultural credit conditions in the Tenth Federal Reserve District tightened in the second quarter of 2024 due to declining farm income, lower crop prices, and high production costs. Farm incomes continued to weaken, particularly in crop-heavy states like Kansas, Missouri, and Nebraska, while cattle prices provided some support. Farm borrower liquidity declined, and loan demand increased sharply, but repayment rates fell, indicating growing financial pressure on farmers.

Farm income was lower in all states, but the retraction remained especially pronounced in areas more impacted by low crop prices. The index of farm income was lower in Kansas, Missouri, and Nebraska, where crops make up a larger share of farm revenues (Chart 2). After strengthening last quarter, farm income in the Mountain States and Oklahoma declined in the second quarter as 30% of lenders in those states reported lower farm income than a year ago.

Farm income by state

(Federal Reserve Bank of Kansas City)

Despite these challenges, agricultural credit stress remained limited, though signs of financial strain are emerging. Interest rates on farm loans stayed relatively high, and farmland values grew more slowly, with ranchland values showing relative strength. Lenders expect land values to stabilize, with some anticipating further declines in cropland values and increases in ranchland values. Overall, the agricultural sector is experiencing modest financial deterioration amid ongoing economic pressures.

Banker Comments Q2 2024

“Beef producers have experienced good margins over the last 12-18 months, but increasing replacement costs and interest costs will reduce margins moving forward.”– Kansas

“Lower grain prices and continued drought are causing stress.”– Kansas

“Inflation has increased family living expenses for our producers. Lower crop prices compared to a year ago is also worrisome to farmers in the area but continued high livestock prices have helped our cattle producers.”– Kansas

“Inflation is having a substantial effect on family living. Equipment upgrades and new purchases are a rare conversation with stressed cash flows.”– Missouri

“We expect profit margins to be reduced in the row crop sector while we should see significant improvement in profit margins in the cattle sector.”– Missouri

“The cattle market has provided much needed profit for cattle producers, but expansion and replacements have a lot of risk for borrower and lenders if a correction is to take place in the near future.”– Missouri

“We are seeing quite a few of our farm lines of credit approaching their max already, which would be a few months earlier than normal.”– Nebraska

“Inflation is keeping household spending higher, liquidity took a hit and we have seen some refinancing needed against land, but land prices are still high even with higher interest rates.”– Nebraska

“Interest rates and commodity prices and primary concerns in our area.”– Nebraska

“If cattle prices maintain, cattle producers will be okay until stockers are purchased, but if cattle prices deteriorate, it could be ugly. Crop farmers with low prices are hurting and yields were all over the spectrum.” – Oklahoma

“Cost of living is increasing significantly, and equipment and parts cost are increasing significantly.” - Oklahoma

“Higher rates are straining farmers cash flow and ability to operate with increasing input costs.” - Oklahoma

How Agriculture Could Be Impacted by Any U.S. Recession

Mon, 12 Aug 2024 16:35:07 GMT

Talk of a recession in the U.S. is making headlines. A U.S. recession can have varied impacts on the ag sector, influenced by factors such as commodity prices, input costs, and consumer demand.

Here are some key points to consider:

Impact on farm income and commodity prices

1. Decline in farm income: Farm income is expected to decrease significantly, with projections indicating a decline of $43.1 billion in 2024 compared to 2023. This decline is attributed to lower commodity prices and higher production expenses.
2. Commodity price fluctuations: Recessions often lead to decreased demand for certain agricultural products, particularly those considered discretionary, such as cotton, dairy, specialty meat products and vegetables (more on this below). This can result in lower prices for these commodities, affecting farmers’ revenues.
3. Input costs: Despite potential reductions in fuel prices, other production costs, such as labor, marketing, and transportation, are expected to rise. This increase in expenses can further squeeze farm profitability.

Consumer demand and market stability

1. Stable demand for essentials: The demand for essential food items tends to remain stable during recessions, as consumers still need to purchase basic food products. This can provide some stability to the agriculture sector, particularly for staple crops like corn and soybeans.
2. Shifts in consumer spending: While overall food demand remains stable, there may be shifts in consumer spending patterns, such as reduced spending on higher-end food products and dining out, which can impact certain segments of the agriculture market.

Financial and economic considerations

1. Credit and loan challenges: With declining farm incomes and high input costs, farmers may face difficulties in meeting loan obligations, leading to increased credit risk for agricultural lenders.
2. Impact on rural economies: Reduced farm income can have a ripple effect on rural economies that depend on agricultural spending. This can lead to economic challenges for businesses in these communities, potentially resulting in business closures and job losses.
3. Risk management: Farmers may need to adopt risk management strategies such as crop insurance or revenue protection programs to mitigate the impact of lower commodity prices on their income.

During a recession, certain ag commodities are more vulnerable due to changes in consumer spending and economic conditions. Here are the commodities that in the past have been most susceptible:

Vulnerable commodities

1. Cotton: Cotton is particularly vulnerable during a recession because it is considered a discretionary item. Consumers tend to cut back on non-essential purchases, which affects the demand for cotton and cotton-related products. As a result, cotton prices often decline during economic downturns.
2. Specialized meat and vegetables: Niche products, such as specialized meat products and high-end vegetables, also face greater recessionary pressures. These items are often sold at higher prices and are more likely to be purchased when consumers have disposable income. During a recession, consumers may opt for more affordable alternatives, reducing demand for these specialized products.
3. Dairy: Dairy farms are among those that could experience financial stress if farm income declines further. The dairy sector’s vulnerability is linked to its reliance on stable commodity prices and the ability to manage production costs effectively.

Of note: Commodities tied to discretionary spending are more vulnerable to the impacts of a recession.

Resilient commodities

Conversely, some commodities are less affected by recessions due to their status as staple goods:

• Poultry, eggs, wheat, and peanuts: These commodities are considered staples and tend to maintain stable demand even during economic downturns. As essential food items, they are less likely to experience significant drops in demand.

Bottom line:

Overall, while the ag sector can act as a buffer during economic downturns due to stable demand for essential products, it is not immune to the broader economic challenges posed by a recession. Farmers and agribusinesses may need to navigate these challenges through strategic planning and risk management. This is why Title I of the farm bill is so important and why some lawmakers stress the current safety net will prove woefully short of helping farmers in any significant price downturn.

Farmland Values in Iowa Fall for the First Time in 5 Years

Fri, 09 Aug 2024 17:24:07 GMT

Lower commodity prices and higher interest rates are starting to show up in land values. Two ag lenders say farmland values in Iowa fell for the first time in five years.

Farm Credit Services of America and Frontier Farm Credit released its benchmark farmland values report.

It showed since January, land values have made modest gains in Eastern Kansas, Nebraska, South Dakota and Wyoming. It’s a different story in Iowa, however, where the value of cropland has declined overall 2.4 percent.

“The combination of higher interest rates and tighter margins for grain producers is having an impact on cropland values,” said Tim Koch, executive vice president of business development for the two Associations, which operate as part of a collaboration.

Farm Credit Services of America and Frontier Farm Credit release benchmark farmland values report showing trends and market changes

(FCS America )

But they say despite the pullback, Iowa’s real estate values are up nearly 60-percent since 2019. and across all five states they serve, values remain at or near record levels.

View the full report here .