Category: Crop Marketing

Throughout this growing season, much of the conversation has centered around expectations for a historically large U.S. corn crop. In its September report, USDA projected production at 16.8 billion bushels, nearly 1.5 billion more than the previous record set in 2023. As noted in last week’s Southern Ag Today article, Potential Market Impacts of Missing a WASDE Report During Government Shutdowns, the October WASDE was canceled due to the government shutdown, leaving producers without updated yield or demand estimates. Now that harvest is well underway and yields are coming in, USDA may trim its yield estimate slightly, but even with a small adjustment, we are still looking at a massive crop. The key question moving forward is simple: what are we going to do with all of it?

Most U.S. corn is used for three primary purposes: livestock feed, ethanol production, and exports, which together account for roughly 97 percent of total use. The remaining share goes toward food and seed. Figure 1 shows annual corn consumption since 2010.  Corn used for feed is currently projected at 6.1 billion bushels, the highest level since at least 2000. The projected grain-consuming animal units (GCAUs), a USDA measure of animals on feed, are estimated at 100.8 for 2025. Even with a smaller cattle supply, this is higher than the 2024 measure of 99.9, driven by increases in hogs, layers, and broilers. Lower corn prices make it a more competitive feed ingredient that will continue to support feed demand in the year ahead.

Corn use for ethanol production is projected at 5.6 billion bushels for the 2025 marketing year, up from 5.4 billion bushels last year. Although ethanol use has leveled off since the rapid expansion seen during the 2010s, it remains a steady and reliable source of demand for U.S. corn. Recent policy discussions around allowing year-round sales of E15 could provide an additional boost to corn demand through expanded ethanol use. 

While other commodities have faced headwinds, exports have been a bright spot for corn demand this year. Export sales have moved at a blistering pace, with the current forecast calling for a record 3 billion bushels of U.S. corn exports. Notably, this surge has occurred without purchases from China, which has remained absent from the U.S. corn market since the 2023/24 marketing year. Instead, sales to traditional trading partners have been strong, led by Mexico, followed by Japan and Colombia. Due to the government shutdown, USDA has not updated its weekly export sales report since the week of September 18. When reporting resumes, the next update will be closely watched to see whether corn export sales have maintained their rapid pace.

Given the elevated demand projections for corn, it is hard to see a significant price boost coming from the demand side throughout the rest of the year. Large supplies will continue to weigh on the market, and all eyes will be on the final production numbers. In this environment, managing price risk becomes critical. Producers with unpriced grain should consider setting clear marketing targets and evaluating tools such as forward contracts, futures, or options to lock in favorable opportunities when they arise. A disciplined approach to marketing can help balance downside risk while keeping flexibility for potential rallies later in the year.    

Figure 1. U.S. Corn Consumption by Category, 2010-2025. Source: USDA

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Maples, Will. “Demand Outlook for a Record U.S. Corn Crop.” Southern Ag Today 5(43.3). October 22, 2025. Permalink

The USDA’s World Agricultural Supply and Demand Estimates (WASDE) report is one of the most influential monthly publications in agriculture. It summarizes and updates projections on global crop production, trade, and consumption—information that agricultural markets rely on to set prices. However, the October WASDE report will not be released due to the ongoing government shutdown. Without this update, the effects ripple across the supply chain, impacting farmers, merchandisers, and financial markets that depend on timely market intelligence to guide decisions.

Previous government shutdowns have interrupted the release of WASDE reports, and research has shown this has introduced heightened uncertainty into the markets during the short term (Adjemian et al. 2017; Goyal and Adjemian, 2021). Without the monthly WASDE, buyers and sellers lose a crucial reference point on where the market stands. While we can only speculate about what the October report would have shown, its absence means missed opportunities. The numbers could have shifted prices positively or negatively, creating advantages for either sellers or buyers of agricultural commodities.

The disruption is especially significant during harvest. This is the time when actual yields are measured, contracts are delivered, and elevators manage a surge of grain. Typically, the October and November WASDE reports capture updated harvest conditions, painting a near real-time picture of the national balance sheet. Without those updates, elevators are left to alternative sources of information to estimate supply levels—possibly causing basis moves that may be too high or low. Similarly, demand projections lack clarity, which can swing futures prices in either direction.

In the short term, private forecasts will likely gain influence, but these estimates often vary widely by source, adding to market volatility. In the longer term, multiple months of projections may be bundled into a single release once USDA reporting resumes, creating larger adjustments in supply or demand estimates that markets must digest all at once.

In sum, whether the October WASDE would have been bullish or bearish for producers would have depended largely on changes to yield estimates. But the absence of a report is significant in itself. The lack of transparent, standardized market information increases the risk of mispriced grain and market inefficiencies, leaving producers and elevators to make large-scale marketing and storage decisions under heightened uncertainty.

References

Adjemian, M. K., Johansson, R., McKenzie, A., & Thomsen, M. (2018). Was the missing 2013 WASDE missed?. Applied Economic Perspectives and Policy, 40(4), 653-671.

Goyal, R., & Adjemian, M. K. (2021). The 2019 government shutdown increased uncertainty in major agricultural commodity markets. Food Policy, 102, 102064.

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Gardner, Grant. “Potential Market Impacts of Missing a WASDE Report During Government Shutdowns.” Southern Ag Today 5(42.3). October 15, 2025. Permalink

The United States had long been the world’s leading cotton exporter (Figure 1), with 87% of cotton production, on average, destined for export markets over the past decade (2016 – 2025). In 2016, U.S. cotton exports captured 39% of the global market, but this share has steadily declined since the onset of trade disputes with China. By 2023, the U.S. share in the global cotton market had fallen to 26%, its lowest point in over a decade. Although it rebounded slightly to 28% in 2024 and 2025, U.S. cotton has faced rising competitive pressures, particularly from Brazil.  Brazil’s ability to double-crop cotton with other crops has driven substantial growth in its cotton production and exports. Consequently, Brazil has rapidly expanded its role in the global cotton market, surpassing U.S. cotton export volumes by 2023 and becoming the world’s leading cotton exporter. This shift is closely tied to China’s strategic diversification away from U.S. cotton, with Chinese investment in Brazilian infrastructure improving logistics, port access, and overall competitiveness. 

Cotton prices received by producers across countries vary only slightly, with Brazilian cotton producers typically receiving marginally lower prices than their U.S. counterparts. Although Brazilian cotton producers face higher seasonal costs per acre for fungicides and insecticides due to the tropical climate, these expenses are more than offset by advantages in land, labor, and machinery costs. Consequently, Brazil’s overall production costs per acre for cotton are slightly lower than those of the U.S. producers, reinforcing the former’s competitiveness. Moreover, USDA FAS data indicate that Brazilian cotton yields from 2021 to 2024 averaged 1.8 times that of U.S. yields, resulting in significantly lower costs per pound of cotton produced. Since Brazil’s production costs for cotton remain below market prices, its cotton producers have continued to operate profitably, enabling expanded production. As a result, Brazil’s cotton output has surged, and by 2023, it had surpassed U.S. cotton production, becoming the world’s third-largest cotton producer after China and India. In contrast, U.S. cotton producers have faced production costs exceeding gross revenues, leading to financial losses since 2022 (Liu 2024), coincidental with a severe drought that year in the U.S. Southern Plains. 

The global cotton market is undergoing significant shifts, with Brazil emerging as a leading exporter and the United States facing new competitive pressures. Brazil’s ability to expand production efficiently, combined with China’s strategic diversification, has reshaped export patterns and global market shares. For U.S. producers, this evolving landscape underscores the importance of monitoring international market trends, production costs, and trade relationships. While challenges exist, understanding these dynamics can help growers make informed planting, marketing, and risk management decisions, ensuring continued competitiveness in a changing global market.

Figure 1. Top Three Global Cotton Exporters by Country and Year.

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Liu, Yanguan, Gopinath Munisamy, and John Robinson. “How Brazil’s Rise in Global Cotton Markets Impacts U.S. Exports.” Southern Ag Today 5(41.3). October 8, 2025. Permalink

U.S. Production and Harvest Acres

The 2025 planting season was marked by considerable challenges. Farmers in the Midsouth faced historical flooding in April that forced replanting across a significant portion of the Mississippi delta region. As farmers put planting behind them, the growing season brought extreme heat and a prolonged drought. In contrast, California experienced a relatively normal year with ideal planting temperatures and no surface water allocation issues (USA Rice, 2025).  Even with California’s improved season, the production setbacks in the Mississippi delta region offset those gains, and, as a result, U.S. rice production is expected to decline roughly 10 million cwt from 2024 levels, falling to 208.8 million cwt in 2025 (Figure 1). Over the past decade, production has fluctuated between 160 and 230 million cwt, with acreage shifting between 2 – 3 million acres. Peaks in 2016, 2018, and 2020 reflect the typical crop rotation across the midsouth. However, with high input costs and weaker rice prices, 2022 marked a contraction in production at 160 million cwt. Production has since recovered, due in part to more favorable returns for a rice crop compared to other Midsouth commodities such as corn or cotton.  

Figure 1. U.S. All Rice-Class Production and Acres Harvested (2015 – 2025F)

The September 2025 World Agricultural Supply and Demand Estimates (WASDE) report forecasts a 35% year-over-year increase in all rice-class beginning stocks. This increase in beginning stocks is almost entirely driven by the 93% year-over-year increase for long grain, the result of record yields across the southern region in 2024, with Arkansas averaging 169.8 bu/acre (UADA-CES, 2025). On the other hand, medium grain is forecasted to fall by 27.5%. The current outlook is for a slight rise in overall exports and a relatively minor decrease (~0.9%) in ending stocks relative to 2024/25 (USDA-AMS, 2025). Ending stocks are currently forecasted at 53.4 million cwt, compared to 2024/45, which was 53.9 million cwt. The USDA anticipates long-grain rice exports will reach 64 million cwt, a level that hinges on maintaining price competitiveness in global markets. As a result, farm prices for long-grain rice are forecast to decline to $12.00/cwt, while the prices for Southern medium & short-grain rice are forecast at $12.50/cwt (Figure 2). These expectations represent a severe decline from the 2024/25 marketing year, with long grain and Southern medium & short grain prices falling 14% and 18%, respectively. It’s worth noting that the effective reference price has increased from $14.00/cwt to $16.90/cwt for the 2025/26 marketing year (One Big Beautiful Bill Act, 2025). Figure 2 highlights this change, showing that current forecasts indicate a possible PLC payment under the new effective reference price. 

Figure 2. Rice Marketing Year Average Farm Prices (2021/22 – 2025/26F)

Figure 3 highlights a modest increase in exports across major rice-supplying countries. However, global rice prices have trended downward throughout 2025, primarily due to weaker global demand, India resuming rice exports, much lower import demand from Indonesia, and a temporary ban on rice imports in the Philippines, which is expected to lift in November (USDA-FAS, 2025). U.S. long-grain rice is currently priced around $585/ton^[1], which represents the most expensive rice on the world market. In contrast, India, Pakistan, and Thailand are all competing for the cheapest rice on the market, priced at around $360/ton. The broad decline in the world rice price has been from India’s decision to lift its rice export ban in September 2024. Nearly a year later, Indian exports continue to exert downward pressure on international markets.

Figure 3. Milled Rice Exports (2021/22 – 2025/26Sept)

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^[1] This price reflects #2, 4-percent brokens, sacked FOB, Gulf Coast (Childs and Abadam, 2025)

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References

Childs, N., and Abadam, V. (2025). Rice Outlook: September 2025 (Report No. RCS-25H). U.S. Department of Agriculture, Economic Research Service. Retrieved September 2025, from, https://downloads.usda.library.cornell.edu/usda-esmis/files/dn39x152w/j9604180m/w0894b61f/RCS-25H.pdf

University of Arkansas – Cooperative Extension Service. (2025). Rice Production in Arkansas. Division of Agriculture. Retrieved September 2025, from, https://www.uaex.uada.edu/farm-ranch/crops-commercial-horticulture/rice/#:~:text=In%202024%2C%20Arkansas%20rice%20producers,lb%2Facre)%20in%202021.

United States Department of Agriculture, Agricultural Marketing Service. (2025). World Agricultural Supply and Demand Estimates (WASDE-664). Retrieved September 15, 2025, from, https://www.usda.gov/oce/commodity/wasde/wasde0925.pdf

United States Department of Agriculture, Foreign Agricultural Service – PSD Reports. (2025). World Rice Trade. Retrieved September 12, 2025, from, https://apps.fas.usda.gov/psdonline/app/index.html#/app/downloads

United States Department of Agriculture, National Agricultural Statistics Service. (2025). Rice Production and Acres Harvested. Retrieved September 2025, from, https://quickstats.nass.usda.gov/

USA Rice. (2025). Spring Planting Report. Retrieved September 2025, from, https://www.usarice.com/news-and-events/publications/usa-rice-daily/article/usa-rice-daily/2025/04/25/spring-planting-report

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Loy, Ryan, and Alvaro Durand-Morat. “2025/26 Rice Market Outlook.” Southern Ag Today 5(40.3). October 1, 2025. Permalink

As a leading importer of cotton, China plays a pivotal role in shaping the international cotton market (Figure 1). China’s cotton imports are highly regulated by government policy, with centralized guidance through a tariff-rate quota (TRQ) system. The TRQ allows a specified amount of cotton (quota, currently at 894,000 tons) to be imported at a lower tariff rate (1%). Imports exceeding the quota are subject to a significantly higher tariff rate (currently at 40%). China adjusts these quotas annually in accordance with World Trade Organization (WTO) rules. Through this mechanism, the government can set cotton import policies in coordination with its reserve programs.

In 2017, just prior to the first round of the U.S.–China trade war, China produced 27 million bales of cotton. This made China the second-largest cotton producer after India, which produced 29 million bales. Despite this high level of domestic production, China still ranked as the world’s third-largest importer in 2017, after Bangladesh and Vietnam. Since 2017, China’s share of global cotton imports has ranged from 12% to 34%, largely due to its cotton reserve programs and the import quota system.

In 2023, the above-noted China policies prompted a high volume of cotton imports, which significantly influenced global cotton markets. This import surge was driven by favorable (low) cotton prices and anticipation of trade uncertainties in the 2024 marketing year following the U.S. election. As a result of the large imports in 2023, China’s need for cotton imports in 2024 declined substantially, while domestic cotton production was boosted to a high level. A similar period of disruption occurred in 2012–2014, when China responded to the 2011 price spike by building up massive reserve stocks. For the next three years, those reserves were drawn down in place of imports, sharply reducing China’s buying from the world market. This shift put heavy pressure on global demand, and U.S. cotton prices eventually slid from the 80–90 cent range per pound back down to more typical long-run levels. In the 2025 crop year, China is projected to produce 31.5 million bales of cotton, the highest among all producing countries. Nevertheless, it also imported 5.3 million bales, ranking just behind Bangladesh (8.1 million), Vietnam (8.0 million), and Pakistan (5.9 million). 

China’s role in the global cotton market has important implications for U.S. growers. Even as the world’s largest cotton producer, China continues to import significant volumes of cotton, and these purchases can swing sharply from year to year depending on government policies, reserve levels, and trade dynamics. These swings in demand can create added risk and unexpected price volatility, even during the fall season, when U.S. growers typically anticipate harvest-time pressures. For U.S. growers, keeping an eye on China’s policy changes and trade relations is critical, as these factors directly affect global cotton prices and export opportunities. Ultimately, China’s decisions will remain a key driver of market conditions that shape the fortunes of cotton producers worldwide.

Figure 1. Top Five Global Cotton Importers by Country and Year

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Liu, Yanguan, Gopinath Munisamy, and John Robinson. “China’s Pivotal Role in the Global Cotton Market.” Southern Ag Today 5(39.3). September 24, 2025. Permalink