Category: Crop Marketing

On Monday, March 31^st, USDA released the Prospective Plantings report. These acreage estimates are based primarily on surveys conducted by the National Agricultural Statistics Service (NASS) from February 18 to March 18. Principal crop acres planted were projected nationally at nearly 310 million acres, down roughly 1.3 million acres compared to last year. Corn acres are estimated at 95.3 million, up 4.7 million from last year and the third highest in modern history. Soybean planted acres are estimated at 83.5 million, down almost 3.6 million from last year.  Cotton acres are projected to be down 12% from last year, at 9.867 million acres, the lowest since 2015. Peanut acreage is projected at 1.95 million acres, up 8% from last year, and rice acres are projected at 2.895 million, down 1% from last year. All wheat acreage is projected at 45.35 million, down 2% from last year. The forecasts in the Prospective Plantings report confirm recent projections released at the February USDA Outlook Forum which had 2025 corn acres increasing by 3.4 million, a 3.1-million-acre reduction in soybeans, and 1.18 million fewer acres of cotton. 

In fact, the USDA indicated in the Prospective Plantings report an even larger increase in corn acres compared to last year. Throughout the first quarter of 2025, new crop corn-soybean futures price ratios heavily favored corn over soybeans ranging from 2.20 to 2.31, driven by tightening U.S. and World corn stocks.  In fact, the price ratio averaged 2.24 during the window of the 2025 March Prospective Plantings survey compared to 2.49 in the same time frame last year. Cotton was expected to cede acres this year due to struggling demand, intense export competition with Brazil, and lower prices compared to other commodities. All states except Arizona and Kansas are projected to reduce cotton acreage from last year. Rice acres are also expected to decline on lower prices, static input costs and fierce export competition from Asian origins.  Seed availability for long-grain rice is an additional factor reducing acres. Futures price reaction from the March 31 report was subdued, with the findings in the Prospective Plantings report mostly in agreement with pre-report industry estimates.  New crop (i.e., Fall 2025) corn settled one-half cent lower, soybeans 9 ¾ cents lower, cotton 17 points ($0.0017) lower, and rice 1 ½ cents per cwt. lower.

We now provide a 2025 update to a 2023 Southern Ag Today article addressing the reliability of the Prospective Plantings report (Biram and Maples, 2023). The NASS planted acreage projections across the U.S. continue to hold well with low predictive error and hold especially well for corn and soybeans over the 2016-2024 time span (Figure 1). There still remains a relatively small predictive error for rice and cotton over the same time span. The larger variance can be due to (1) the smaller sample size of farms and (2) the alternative crops available to plant in place of corn and soybeans. Most of the U.S. corn and soybean acreage is grown in the upper Midwest but tends to take up acreage across the entire U.S. which allows for a larger sample of farmers and less variance. In the south, farmers rotate corn and soybean crops with cotton, peanuts, and even some vegetables.  This makes it more difficult to project acres that may shift based on rotational needs, commodity prices, input costs, and weather.  

We re-investigate the difficulty in projecting acreage by choosing the subsample of southern states to see if 1) there is more variance across the changes in corn and soybean acreages given a smaller sample and 2) the pattern of acreage changes across cotton and rice still holds in the subsample. We find this to continue to hold (Figure 2). We see more differences each year between prospective and actual planted acreages in corn and soybeans across southern states, and the general pattern of differences each year for cotton and rice still holds between the full U.S. sample and the southern subsample. This implies that we should generally not expect any significant changes in harvest price expectations driven by differences in planted acreages but rather look to future market-moving events. The continuation of drought conditions in West Texas has implications for the cotton market, while prolonged drought in the western Corn Belt has implications for corn and soybean production, as evidenced in 2023 (Gardner and Biram, 2023). Looking globally, we turn to weather-related impacts to the second Brazilian corn crop, as well as a future path on trade talks with our top trading partners (i.e., Mexico, Canada, and China). 

Figure 1. Comparison of Prospective vs. Actual Planted Acreage across the U.S. (2016-2025)

Figure 2. Comparison of Prospective vs. Actual Planted Acreage across Southern^[1] States (2016-2025)

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^[1] States included are Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia.

References:

Biram, Hunter, and William E. Maples. “Key Takeaways and Reliability of the 2023 Prospective Plantings Report.” Southern Ag Today 3(14.1). April 1, 2023. Permalink

Gardner, Grant, and Hunter D. Biram. “USDA Acreage Report Results: Price and Crop Insurance Impacts.” Southern Ag Today. July 3, 2023. Permalink

NASS/USDA. Prospective Plantings. National Agricultural Statistics Service, U.S. Department of Agriculture, March 2025. Retrieved from: https://release.nass.usda.gov/reports/pspl0325.pdf

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Stiles, H. Scott, and Hunter Biram. “Key Takeaways of the 2025 Prospective Plantings Report and Revisiting Reliability.” Southern Ag Today 5(14.3). April 2, 2025. Permalink

With planting season underway across much of the South, and soon across the Corn Belt, one of the major questions that will impact price direction is planted acreage.  At the Agricultural Outlook Forum (AOF) in late February, USDA projected corn area planted at 94.0 million acres, up from 90.6 million in 2024 (Figure 1). The increase in acres from 2024 to 2025 was not a surprise given recent strength in corn prices relative to that of soybeans. But, the magnitude of the increase relative to trade expectations can have an impact on futures prices. 

Additional information on farmer planting intentions will be released in the March 31 Prospective Plantingsreport. This survey is administered by the National Agricultural Statistics Service (NASS) during the first two weeks in March. The next official report of planted acres is the Acreage report of June 30, an additional farmer survey of actual crop acres planted (and remaining intended). 

Acres planted is a fluid variable with estimates moving from USDA’s model-based projections (February Outlook) to late-winter farmer intentions (March Prospective Plantings) to area actually planted (June Acreage).  Shifts in futures prices as we move from winter to spring offer some indication of what to expect in forthcoming reports. 

First, is the relationship between the numbers of the Outlook forum and the prospective plantings survey. In the 29 years since 1996 (the Freedom to Farm era, which moved away from acreage restrictions to greater flexibility in farmer planting decisions), farmer planting intentions were lower than the acreage number presented at the Outlook Forum 17 times (59%); while 12 years were higher (41%). The average for all years is 184,000 acres less of actual planted acreage compared to the Outlook forecast. Balanced against trade expectations, this would generally be seen as bullish for corn prices. 

Second, do changes in futures prices affect farmer planting decisions as we move from late winter to spring? Using monthly average inflation adjusted prices of the December corn contract, there is a positive relationship between price changes and acres planted (Figure 2). Years in which the December futures contract increased from February to April tend to be correlated with an increase in acres planted relative to intended. A decline in prices from February to April is associated with fewer acres planted than intended. A rough estimate of that relationship is that a one-cent change in price changes area planted by about 9,000 acres.^[1]

How does this information position us for the release of 2025 acreage numbers? First, the greatest likelihood is for corn acres intended to come in lower than the projections of the Outlook Forum (bullish). Next, at the time of this writing, the average 2025 December corn futures closing price in March is 451.77 compared to 469.67 in February. If this relationship holds, that is, if the average price in April is still below the February price, that suggests a further reduction in acres from intended to actual (bullish). 

Of course, a multitude of other supply and demand variables will ultimately influence the harvest price of corn. Extremes in the change in corn acres planted in response to price came in years of dramatic shifts in demand: 2007 (+2.4 million acres at the beginning of the biofuel era) and 2020 (-5.0 million acres, Covid). Developments related to tariffs and trade may be the catalyst for magnified response in the dynamics of price and acreage in 2025.  

Figure 1. U.S. Corn Acres: Agricultural Outlook Forum (AOF), Prospective Plantings (PP), and Acreage

Figure 2. Corn planted acres in response to a change in price

^[1] For more on farmers’ response to price shocks on planting decisions, see “Estimating Supply Elasticities for Corn in the United States: Accounting for Prospective Plantings”, Raghav Goyal, Michael K. Adjemian, and William Secor, AAEA, 2022.

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References:

USDA, NASS, Acreage. Available online at https://usda.library.cornell.edu/concern/publications/j098zb09z.

USDA, Agricultural Outlook Forum. Available online at https://www.usda.gov/about-usda/general-information/staff-offices/office-chief-economist/agricultural-outlook-forum

USDA, NASS, Prospective Plantings. Available online at https://usda.library.cornell.edu/concern/publications/x633f100h

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Welch, J. Mark. “Estimating Corn Planted Acres for 2025.” Southern Ag Today 5(13.3). March 26, 2025. Permalink

Extreme weather events, like drought, jointly impact agricultural production and rural infrastructure, including transportation infrastructure. An important part of this transportation infrastructure is the Mississippi River. It serves as one of the most critical networks for moving agricultural commodities from production to consumption areas, including export markets. In 2020, U.S. agricultural exports totaled $146 billion, increasing 7 percent year over year (U.S. Department of Agriculture’s Foreign Agricultural Service, 2021). Approximately 46 percent of grain exports were moved by barge in 2020. Soybeans, the leading U.S. agricultural export, rely heavily on barge transportation, with 53 percent of exports and 28 percent of total supplies moved by barge in 2020.

Despite this reliance on barges for moving U.S. grain, little is known about the link between extreme weather, rural transportation infrastructure, and crop prices. In 2022 and 2023, the Lower Mississippi River reached historic lows. In October, the U.S. Geological Survey (USGS) Memphis stream gauge read -12.0 feet and -10.8 feet in 2023 and 2022, respectively. The previous record was set in 1988 when the USGS Memphis stream gauge read -10.7 feet. These record-low water levels increased transportation costs and barge freight rates as documented by previous Southern Ag Today articles (Biram, et al., 2022; Gardner, Biram, and Mitchell, 2023; Biram, Mitchell, and Stiles, 2024). Higher transportation costs are transmitted to row crop producers through lower cash bids or a weakening of local crop basis (calculated as the cash price minus the futures price). Historic lows in Mississippi River levels during the fall harvest of the last three years have highlighted the need to measure the impact of these low river levels on rural infrastructure and communities.

Mitchell and Biram (2025) measure the impact of low water levels on the Mississippi River using Arkansas soybean basis data across 12 regional grain markets from USDA’s Agricultural Marketing Service and stream gauge data from USGS. They use a “low river” status measure that affects a grain market once the river gauge height falls below negative five feet and is weighted by the distance between a grain elevator and the closest public Mississippi River port.  They find that when the river stream gauge in Memphis, Tennessee reads -5 feet, Arkansas soybean basis weakens (widens) by $0.58 per bushel, $0.29 per bushel, and $0.12 per bushel for grain markets that are 5 miles, 10 miles, and 25 miles from the closest Mississippi River port, respectively. Similarly, they find that Mississippi soybean basis weakens (widens) by $0.55 per bushel, $0.28 per bushel, and $0.11 per bushel for the same distances to grain markets. Figure 1 below shows the degree of the impact of low river levels on soybean basis in Arkansas with markets near the river experiencing weaker basis than of those further from the river.

Figure 1. Impact of Low Mississippi River Levels on Soybean Basis in Dollars per Bushel in Arkansas

References

Biram, Hunter, John Anderson, Scott Stiles, and Andrew McKenzie. “Low Water Levels in the Mississippi River Result in Abnormally Weak Soybean Basis“. Southern Ag Today 2(45.1). October 31, 2022. Permalink

Biram, Hunter, James L. Mitchell, and H. Scott Stiles. “Low Rivers Levels on the Mississippi River: Not the Three-Peat We Want.” Southern Ag Today 4(39.3). September 25, 2024. Permalink

Gardner, Grant, Hunter Biram, and James Mitchell. “Low River Levels, Barge Freight, and Widening Basis.” Southern Ag Today 3(39.1). September 25, 2023. Permalink

Mitchell, J. L., & Biram, H. D. (2025). The effects of extreme weather on rural transportation infrastructure and crop prices along the Lower Mississippi River. Applied Economic Perspectives and Policy.

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Biram, Hunter, and James L. Mitchell. “Estimating the Impact of Low Mississippi River Levels on Soybean Basis in the Midsouth.” Southern Ag Today 5(12.3). March 19, 2025. Permalink

USDA released the latest World Agricultural Supply and Demand Estimates (WASDE) report on March 11, 2025.  The most significant item presented was a clarifying “note” at the beginning of the report that is important for users of USDA WASDE estimates to understand.

“The WASDE report only considers trade policies that are in effect at the time of publication.  Further, unless a formal end date is specified, the report also assumes that these policies remain in place.”

In other words, the effects of tariffs that are to be implemented in the future, even if already announced, are not included in the report estimates.  This includes the Canada and Mexico tariffs that have been suspended until April 2.  Alternatively, retaliatory tariffs from Canada, along with U.S. tariffs on China and China’s retaliatory tariffs are all currently in effect and are reflected in the current WASDE estimates as if they will continue indefinitely into the future.  Users of these estimates need to consider this factor in their interpretation.  

The effects of trade policy on markets are particularly important given the large percentage of exports that are reflected in crops contained in the WASDE report.  Table 1 shows the March 2025 WASDE estimates of supply, use, stocks, and prices of four major row crops produced throughout the southern region.  Total exports are reported, along with calculated exports as a percentage of total use.  Corn has the smallest estimated exports as a percentage of total use at 16%, followed by wheat and soybeans at 42% and cotton at 87%.  Thus, when and if tariffs are implemented, the USDA estimates have the potential to change with the inclusion of trade impacts in the WASDE report.  

Beyond this note, there was very little movement in current estimates.  The average price of wheat at $5.50 per bushel is 5 cents lower than a month ago, continuing a downward trend.    Ending stocks of wheat increased to 819 million bushels.  For U.S. corn, the USDA is projecting no change in ending stocks from the prior month, staying at 1,540 million bushels and maintaining a $4.35 per bushel marketing year average price for 2024/25.  Soybeans were also stable at the prior month’s estimates; however, the USDA revised the marketing year average price down 15 cents to $9.95 per bushel.  Meanwhile, the balance sheet for cotton remained unchanged from last month, while the marketing year average price was adjusted down a half cent to 63 cents per pound.  The next potential market mover from the USDA comes at the end of the month with the release of the Prospective Plantings report.

Table 1. 2024/25 Wheat, Corn, Soybean, and Cotton Supply, Use, Stocks, and Price Estimates, March 2025 WASDE

	Wheat	Corn	Soybean	Cotton
	Production and Supply
Planted (Million Acres)	46.1	90.6	87.1	11.18
Harvested (Million Acres)	38.5	82.9	86.1	8.27
Yield (Bushels/Pounds)	51.2	179.3	50.7	836
Production (Million Bushels/Bales)	1,971	14,867	4,366	14.41
Total Supply (Million Bushels/Bales)	2,808	16,655	4,729	17.57
	US Exports and Use
Exports (Million Bushels/Bales)	835	2,450	1,825	11.00
Total Use (Million Bushels/Bales)	1,989	15,115	4,349	12.70
Exports % of Total Use	42%	16%	42%	87%
	Stocks and Price
U.S. Ending Stocks (Million Bushels/Bales)	819	1,540	380	4.9
U.S. Stocks/Use	41%	10%	9%	39%
U.S. Avg. Farm Price ($/Bushel or Pound)	$5.50	$4.35	$9.95	$0.63

Data Source: USDA March 2025 WASDE

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Rabinowitz, Adam. “March WASDE Estimates and Note on Inclusion of Trade Policy.” Southern Ag Today 5(11.3). March 12, 2025. Permalink

Compared to last year, pre-planting relative financial risk between corn, cotton, and soybean production has changed for many mid-south crop producers. The change in pre-planting financial risk can be illustrated using projected crop insurance prices and crop budgets for 2024 and 2025. Crop insurance prices in this analysis were determined February 1-28 and crop budgets were University of Tennessee Crop Budgets for non-irrigated production. For ease of comparison, actual production history (APH) is unchanged between years and is equal to the target yield in the crop budgets.

Table 1 shows the difference between the crop insurance revenue guarantee for corn, cotton, and soybeans at a 75% buy-up coverage in 2024 and 2025. The crop insurance coverage per bushel or pound is the revenue guarantee divided by the APH. The crop insurance coverage level for corn increased slightly from $3.50/bu to $3.53/bu; however, coverage was reduced for cotton ($0.62/lb to $0.52/lb) and soybeans ($8.66/bu to $7.91/bu). At the same time, from 2024 and 2025, cost of production changed by +/- 2-3% depending on the commodity (Table 2). Cost of production will vary based on geographic location, targeted yield, and production practices.

Cost of production should be estimated for two separate measures—cash costs and economic costs. Cash costs are expenses that need to be paid during the production and marketing year, while economic costs include cash costs as well as ownership and other non-cash costs. In the short run, farms can operate covering cash costs, however, economic costs need to be covered for the operation to remain viable in the long-term. The cash and economic cost per bushel or pound are calculated by dividing cost by target yield (breakeven cash and economic cost per bushel or pound).

The crop insurance coverage per bushel or pound divided by the cash or economic cost provides an estimate of the relative financial risk by year and commodity. The analysis in Table 2 shows that in 2024, 74-75% of the economic cost of production for corn, cotton, and soybeans was covered by Revenue Protection crop insurance, compared to 76% for corn, 65% for cotton, and 67% for soybeans in 2025. For the start of the 2025 crop year, the financial risk mitigated by crop insurance favors corn over soybeans and cotton. 

Calculating relative cash and economic risk exposure between commodities produced on a farm can help guide crop insurance purchasing decisions (buyup coverage, unit structure, and companion policies) and guide a marketing and price risk management strategy to secure prices beyond crop insurance protection. 

Table 1. Revenue Protection Crop Insurance for Corn, Cotton, and Soybeans, 2024 and 2025

	2024 Crop Insurance
Commodity	Projected Crop Insurance Price($/bu or $/lb)	APH(bu or lb)	Coverage Level (%)	Revenue Guarantee ($/acre)	Crop Insurance Coverageper bu or lb
Corn	$4.66	175	75%	$612	$3.50
Cotton	$0.83	1,150	75%	$716	$0.62
Soybeans	$11.55	50	75%	$433	$8.66
	2025 Crop Insurance
Commodity	Projected Crop Insurance Price($/bu or $/lb)	APH(bu or lb)	Coverage Level (%)	Revenue Guarantee ($/acre)	Crop Insurance Coverage per bu or lb
Corn	$4.70	175	75%	$617	$3.53
Cotton	$0.69	1,150	75%	$595	$0.52
Soybeans	$10.54	50	75%	$395	$7.91

Table 2. 2024 and 2025 Estimated Cost of Production for Non-Irrigated Corn, Cotton, and Soybeans and Relative Crop Insurance Coverage 

	2024 Cost of Production
	Cash Costs ($/acre)	Economic Costs ($/acre)	Target Yield(bu or lb)	Cash Cost ($ per bu or lb)	Economic Cost ($ per bu or lb)	Crop Insurance Coverage divided by Cash Cost (%)	Crop Insurance Coverage divided by Economic Cost (%)
Corn	$697	$825	175	$3.98	$4.71	88%	74%
Cotton	$777	$958	1,150	$0.68	$0.83	92%	75%
Soybeans	$464	$579	50	$9.28	$11.58	93%	75%
	2025 Cost of Production
	Cash Costs ($/acre)	Economic Costs ($/acre)	Target Yield(bu or lb)	Cash Cost ($ per bu or lb)	Economic Cost ($ per bu or lb)	Crop Insurance Coverage divided by Cash Cost (%)	Crop Insurance Coverage divided by Economic Cost (%)
Corn	$696	$817	175	$3.98	$4.67	89%	76%
Cotton	$760	$932	1,150	$0.66	$0.81	78%	64%
Soybeans	$477	$587	50	$9.54	$11.74	83%	67%

References and Resources:

University of Tennessee Crop Budgets. 2024 and 2025. https://arec.tennessee.edu/extension/budgets/.

USDA Risk Management Price Discovery. https://public-rma.fpac.usda.gov/apps/PriceDiscovery.

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Smith, Aaron. “Changes in Relative Financial Risk for Corn, Cotton, and Soybeans in 2024 and 2025.” Southern Ag Today 5(10.3). March 5, 2025. Permalink