Category: Crop Marketing

  • Next Year’s Cotton Market Possibilities

    Next Year’s Cotton Market Possibilities

    Longer run price outcomes for the 2026 crop will be influenced by expectations of supply and demand.  A major supply-related question is how much 2026 acreage will be planted to cotton.  The price of competing crops, relative to cotton prices, is an important consideration to the level of planted cotton acreage. Figure 1 shows a fairly strong relationship between the level of U.S. upland and pima cotton planted (as measured on June 30) and the ratio of December CBOT corn futures and ICE cotton futures during the first quarter of the year.  The higher the ratio, the less cotton is planted. 

    Of course, there are other important competing crops as well, e.g., sorghum, soybeans, and peanuts.  There are non-price influences, including how dry it is in Texas, the insurance base price, fixed cost influences, and the psychological influence of the preceding growing season.  But the price ratio of corn to cotton appears to capture a lot of these other influences in explaining variations in cotton plantings.

    What does Figure 1 imply for 2026?  As of early August, the Dec’26 CBOT corn/Dec’26 ICE cotton price ratio is roughly 6.5 (i.e., $4.50 corn divided by 69-cent cotton).   Assuming this ratio prevails during Q1 of 2026, it is historically associated with between 10.0 and 10.5 million acres of all cotton.

    Assuming 10.0 million acres of all cotton in 2026, and further assuming ten-year Olympic averages of U.S. all cotton abandonment (21%) and yield (869 lbs) per harvested acre, the result is a healthy crop of 14.3 million bales. This combines with NASS’s August 12, 2025 projection of 3.6 million bales of carry-in for a 17.9 million bale supply. Further assuming 14.2 million bales of total use, the result is under four million bales of ending stocks of U.S. cotton in 2026/27.  That outcome is neutral for prices as it represents static year-over-year ending stocks. 

    Caveats.  Obviously, the analysis above depends on price ratios which may change between now and early 2026.  Furthermore, the price ratio approach to forecasting planted acreage will be replaced by grower survey results, beginning at the Beltwide Conference (January 7) and continuing with the National Cotton Council’s survey release (February 9) and United States Department of Agriculture’s Prospective Plantings report (March 31) and Acreage report (June 30).

    The National Oceanic and Atmospheric Administration’s Climate Prediction Center forecasts equal chances for continuing ENSO-neutral conditions or the development of La Niña conditions during the winter.  The latter would imply more dryness and higher abandonment during 2026. 

    Data Sources: 
    Historical June 30 planted all cotton acreage data from https://www.nass.usda.gov/Quick_Stats/
    CBOT Dec corn and ICE Dec cotton futures settlements compiled from www.barchart.com

    Robinson, John. “Next Year’s Cotton Market Possibilities.Southern Ag Today 5(34.3). August 20, 2025. Permalink

  • USDA Projects Largest Corn Supply in History

    USDA Projects Largest Corn Supply in History

    All summer, much of the corn market conversation has focused on how strong the corn crop looks nationwide and the potential for a record-breaking harvest. The August WASDE, the first report of the year to incorporate yield estimates from the National Agricultural Statistics Service, confirmed that outlook. National corn yield was pegged at a record 188.8 bushels per acre, up 7.8 bushels from July. An additional 1.9 million harvested acres also pushed production to a forecasted 16.7 billion bushels, 1.4 billion more than the previous record set in 2023. While total U.S. corn use was raised to 16.0 billion bushels, the larger supplies still left the market facing the largest ending stocks since 2018 at 2.1 billion bushels. With that surplus, USDA trimmed the season-average price to $3.90 per bushel.                

    While corn is setting new supply records, soybean estimates were far less dramatic. USDA trimmed harvested area from 82.5 million acres to 80.1 million, but a higher yield estimate of 53.6 bushels per acre offset much of that reduction. As a result, 2025 production is forecast at 4.29 billion bushels. Lower supplies and sluggish export sales led USDA to cut export projections by 40 million bushels. Even so, the soybean balance sheet did tighten slightly, with ending stocks lowered by 20 million bushels to 290 million.

    Cotton’s supply outlook shifted sharply this month, with USDA cutting production estimates by 10 percent. Planted acres are now pegged at 9.28 million, down 9 percent from July. Persistent dryness in the Southwest pushed the abandonment rate higher, leaving harvested acres at 7.36 million. With more abandoned low-yield acres removed from the mix, the yield estimate rose to 862 pounds per acre. However, the acreage losses outweighed the yield gains and pulled production down to 13.21 million bales, 1.4 million fewer than last month. Exports were trimmed by 0.5 million bales, and ending stocks are now projected at 3.60 million bales, a reduction of 1 million from July.

    Overall, the latest WASDE report paints a mixed picture across key row crops. Corn is poised for a record harvest with ample supplies putting downward pressure on prices, while soybeans show modest tightening of the supply and demand situation. Cotton faces reduced acreage and production. As harvest progresses, market participants will be closely watching export demand and weather developments during harvest, which will play critical roles in shaping prices and supply dynamics through the rest of the year.

    Figure 1. U.S. Corn Yield, Planted Acres, and Harvested Acres, 2011–2025 (USDA – NASS)       


    Maples, Will. “USDA Projects Largest Corn Supply in History.Southern Ag Today 5(33.3). August 13, 2025. Permalink

  • Examining August FSA Data to Forecast Final Cotton Acreage

    Examining August FSA Data to Forecast Final Cotton Acreage

    Since 2011, the USDA’s Farm Service Agency (FSA) has provided monthly reports of crop acreage beginning in August.   This information is based on farmer reports of planted, prevented planted, and failed acres received and summarized to date.  A final acreage summary is released in January.  Beginning in October (occasionally in September), these data are used by USDA’s National Agricultural Statistics Service (NASS) for comparison to survey-based planted acreage estimates in the monthly Crop Production report. 

    In this article, we examined the relationship between the preliminary August FSA planted acreage and final FSA planted acreage for cotton.  We also looked at the relationship between final FSA planted acreage and NASS planted acreage.

    While FSA acreage data represents a census of planted acreage enrolled in farm programs, the FSA acreage data does not function as official USDA planted acreage estimates (because not all farms are enrolled in the farm programs administered by the FSA). The official planted acreage estimates are the responsibility of NASS, the statistical agency of the USDA.  

    As a starting point, we reviewed the relationship between the August and final (i.e., January) FSA planted acreage estimates for cotton (upland and Pima combined).  As noted in Figure 1, reporting during August 2020 was off significantly due to the reporting extension during the COVID pandemic. The data pre-2020 and post-2020 indicate all but a small percentage of planted acreage for cotton is generally reported to the FSA by August.  For example, over the 2015-2019 period, the average ratio of preliminary to final FSA planted acreage for cotton was 98.9 percent.  In recent years, 2021-2024, the average ratio increased to 99.7 percent in August. Arguably the period 2021-2024 is the most representative part of the sample for making 2025 forecasts. 

    Figure 1. Ratio of August to Final January FSA Estimate of U.S. Cotton Planted Acreage, 2015-2024

    We also looked at the relationship between the final FSA planted acreage and final NASS planted acreage (Table 1).  In the years 2015-2024, the acreage relationship is quite consistent.  For cotton, the final FSA estimate of planted acreage averages 98.2 percent of final NASS planted acreage with a range of 0.9 percent.   The consistency of the relationships can be attributed to the fact that enrollment in FSA farm programs varies relatively little from year to year.

    TablTable 1. U.S. Planted Acres of Cotton Estimated by NASS and Reported to FSA, 2015-2024

    YearNASSFSADifferenceFSA/NASS(%)
    20158,580,5008,450,939129,56198.5%
    201610,073,5009,927,191146,30998.5%
    201712,717,50012,413,314304,18697.6%
    201814,081,30013,824,448256,85298.2%
    201913,722,70013,405,957316,74397.7%
    202012,086,00011,834,619251,38197.9%
    202111,206,50011,025,710180,79098.4%
    202213,749,00013,530,779218,22198.4%
    202310,230,00010,077,091152,90998.5%
    202411,183,00010,997,089185,91198.3%
         
    Average  214,28698.2%
    Low  129,56197.6%
    High  316,74398.5%
    Source: USDA Farm Service Agency and National Agricultural Statistics Service.

    In 2025, historic spring rainfall disrupted cotton planting in some states, which has made for a challenging year.  Many industry observers questioned the NASS June Acreage survey that delivered much higher-than-expected cotton acreage estimates for the Midsouth region. The findings in USDA’s first monthly acreage report of 2025 will be of particular interest to the cotton industry.  The report will be released on August 12th and can be found at this link:  FSA Crop Acreage Data. The information in these reports is widely followed by the market for clues about possible future revisions to the official USDA planted acreage estimates. Based on recent history, this report is expected to provide a strong indicator for overall cotton acreage in 2025. 


    Stiles, H. Scott. “Examining August FSA Data to Forecast Final Cotton Acreage.Southern Ag Today 5(32.3). August 6, 2025. Permalink

  • New Marketing Assistance Loan Program Rates Established for 2026-2031 Crop Years

    New Marketing Assistance Loan Program Rates Established for 2026-2031 Crop Years

    During the farm bill legislative process in 2024, the House Agriculture Committee proposed increases to the Nonrecourse Marketing Assistance Loan (MAL) rates that were predominantly 10% higher than the existing rates for the major commodities shown in Table 1.  A discussion of the 2024 House and Senate proposals was published in Southern Ag Today on June 24, 2024. While the farm bill was never finalized in 2024, on July 4, 2025, President Trump signed into law the “One Big Beautiful Bill” that included many agricultural provisions.  New MAL rates, similar to the previous House Agriculture Committee proposal, were included in Title I Subtitle C of this bill, effective with the 2026 crop year through the 2031 crop year.

    Here we compare the MAL rate of 2018 to the new MAL rate, as well as discuss the function of the MAL as a marketing tool to cover operating costs of production.  Table 1 shows the 2018 loan rate and the new MAL rates. The MAL rate has increased 10% across the board, except for upland cotton which ranges between 6% and 22%. This wide-ranging percentage increase for upland cotton reflects how the MAL rate in the 2018 Farm Bill is specified from $0.45 to $0.52/lb, but the new rate is a flat $0.55/lb.  Given that the loan rate for upland cotton has not actually been below $0.52/lb since the 2018 Farm Bill, this effectively translates to a 6% increase.

    Table 1: MAL Rates from the 2018 Farm Bill and the One Big Beautiful Bill

    CommodityUnit2018 Farm Bill Loan Rate per UnitNew Loan Rate Per UnitPercentage Increase in Loan Rate from 2018Forecast Operating Cost per Acre for 202612026 Yield Projection2
    Barleybu2.502.7510%193.1981.7
    Cornbu2.202.4210%457.90183.7
    Oatsbu2.002.2010%168.1666.2
    Peanutston355.00390.0010%641.803986
    Ricecwt7.007.7010%784.297745
    Sorghumbu2.202.4210%184.0771.9
    Soybeansbu6.206.8210%245.5953.1
    Upland Cotton*lb0.45-0.520.556%-22%568.36882
    Wheatbu3.383.7210%161.2550.1
    1ERS Commodity Cost and Returns, Cost of production forecasts for major U.S. field crops, 2025F-2026F. 6/18/2025
    2Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, U.S. Agricultural Market Outlook, April 2025,
    FAPRI-MU Report #01-25                             
    *For upland cotton, the 2018 Farm Bill specifies that the marketing loan rate shall be between $0.45-$0.52/lb and not less than 98%
    of the loan rate for the preceding year.  The rate has been $0.52/lb every year since 2018.  

    The MAL can be used as part of a broader marketing plan to provide an influx of cash at harvest to help cover operating loans or expenses with potentially more favorable terms.  With certainty of the MAL rate through 2031, farmers should now consider how this tool can be used for their specific operation to allow for more time to market crops after harvest.  A factsheet with additional information is available from the U.S. Department of Agriculture’s Farm Service Agency


    Reference

    Rabinowitz, Adam (June 24, 2024). “Current Farm Bill Negotiations for the Marketing Assistance Loan Program.” Southern Ag Today 4(26.1). Available at: https://southernagtoday.org/2024/06/24/current-farm-bill-negotiations-for-the-marketing-assistance-loan-program/.


    Bafowaa, Bridget, and Adam Rabinowitz. “New Marketing Assistance Loan Program Rates Established for 2026-2031 Crop Years.Southern Ag Today 5(31.3). July 30, 2025. Permalink

  • Planted Peanut Acres at 34 Year High

    Planted Peanut Acres at 34 Year High

    Farmers across the United States planted an estimated 1.9 million acres to peanuts in 2025, according to the U.S. Department of Agriculture (USDA) Acreage report released on June 30th. If realized, this would mark a 100,000 acre increase over last year’s value and would be the largest peanut plantings since 1991 (Figure 1). This is also the third consecutive year of peanut acreage increases, up from just 1.45 million acres in 2022. Low competing row-crop prices — especially cotton prices being below 70 cents per lb. — is one factor that made peanuts a somewhat more-favorable alternative in 2025. 

    Figure 1: US Planted Peanut Acres by Year

    Data Sources: USDA-NASS. Acreage Crop Production Annual Summary reports.

    The 2025 planted peanut area for all major peanut-growing states is equal to or greater than what it was in 2024, as shown in Figure 2. Georgia — the largest producing peanut state — had the biggest increase, adding 50,000 peanut acres to last year’s figure for a total of 900,000 acres. Alabama, North Carolina, and Texas added an additional 10,000 acres apiece. Georgia’s total would be its highest since 1991, Alabama’s its highest since 2015, and Texas’ its highest since 2017.

    Figure 2: 2025 Planted Peanut Acres by State and Percent Change from 2024

    Data source: USDA-NASS. Acreage. 2025.

    What could this increased peanut acreage mean for production and markets? The USDA Oil Crops Outlookreleased on July 15th reports an estimated 1.85 million harvested acres and an average peanut yield of 4,000 lb. per acre.1  This would amount to a record-high production of 3.7 million tons, a 476,000 ton increase from the 2024 level. At this level of production and current disappearance projections, 2025/26 marketing year ending stocks are projected to be 1.129 million tons, a 34% increase from the prior year. This expected increase in peanut supply would likely lead to a further decline in peanut contract prices going into next year. Overall, the USDA-ERS projects peanut prices for the 2025/26 marketing year to average $500 per ton, which is in line with the runner contracts offered this spring, and would mark an $18-per-ton decrease from last year. 

    Footnote1Keep in mind that peanut yields have been inconsistent over the past decade, so averaging 4,000 lb. per acre is far from a guarantee.


    References

    Sawadgo, Wendiam. “Peanut Yield Trends.” Southern Ag Today 4(13.1). March 25, 2024. Available at: https://southernagtoday.org/2024/03/25/peanut-yield-trends/

    USDA-ERS. Oil Crops Outlook. July 15, 2025. Available at: https://usda.library.cornell.edu/concern/publications/j098zb08p

    USDA-NASS. Acreage. June 30, 2025. Available at: https://usda.library.cornell.edu/concern/publications/j098zb09z

    USDA-NASS. Crop Production Annual Summary. Available at: https://usda.library.cornell.edu/concern/publications/k3569432s


    Sawadgo, Wendiam. “Planted Peanut Acres at Thirty-four Year High.Southern Ag Today 5(30.3). July 23, 2025. Permalink