The USDA’s latest Cattle on Feed report showed continued tightening of feedlot supplies. Total cattle on feed was down only 1.1 percent from a year ago, but both placements into feedlots and marketings out of feedlots were sharply below year-ago levels.
As of September 1, feedlots with 1,000 head or more reported 11.1 million cattle on feed. Placements during August were 1.78 million head, a 9.9 percent decline from August 2024. Placements were lower across all weight classes. This was the lowest August placement total since 2015.
At 1.57 million head, fed cattle marketed in August dropped 13.6 percent from a year ago. This was the lowest August marketing level since the series began in 1996. Excluding the early months of the pandemic, August 2025 was also the lowest marketings total of any month since 2015. There was one less slaughter day this year, which accounted for some of the difference, but this is still a very low marketings total.
Regional differences are stark. The three largest cattle feeding states are Texas, Nebraska, and Kansas, which combine for about 65 percent of total cattle on feed. Despite smaller placements, cattle on feed in Nebraska was up 4.7 percent, and Kansas was up 3.1 percent. Meanwhile, the number of cattle on feed in Texas was 9.1 percent below September 2024, driven by an 18 percent decline in placements into Texas feedlots. The closure of the southern border to imports of feeder cattle due to concerns of New World Screwworm is impacting southern feedlots and could lead to Texas being surpassed by Nebraska as the largest cattle feeding state in the coming months.
Nebraska has surpassed Texas in monthly totals only nine times, with most of those instances occurring during 2014-2016 and driven by severe drought reductions in Texas cattle. On September 1, Texas had 70 thousand head more cattle on feed than Nebraska and 150 thousand more than Kansas. This is much tighter than the 430 thousand and 470 thousand differences from a year ago. The 150 thousand head difference between Texas and Kansas is the closest since 1992.
Overall, this report was pretty telling about the current dynamics of the cattle and beef sector. At the national level, placements and marketings slowed sharply in August. A closer look at state-level statistics shows the shift northward in cattle feeding numbers as southern feeders face even tighter supplies.
Foreign workers hired under the H-2A Guest Farm Worker program are assured of being paid at least the Adverse Effect Wage Rates (AEWRs) determined through a federally designed mechanism. The AEWR determination process serves a two-fold objective: (1) to look after foreign workers’ welfare by assuring they are paid at just, fair wage levels and (2) to ensure that H-2A wages would not “adversely” affect U.S. farm labor market conditions, which could happen if such workers are paid at very low wages that could depress the domestic workers’ market wage rates.
Except for AEWRs set monthly for range occupations (i.e. farms engaged in herding or livestock production operations performed on a range), the wages of the majority of H-2A hires are guided by a single annual rateprescribed for 18 farming territories – consisting of 3 states (California, Florida, and Hawaii) and 15 regions (Figure 1). Under existing H-2A program guidelines, the AEWR for the current year is derived from the average wage data collected by the National Agricultural Statistics Service (NASS) in the preceding year’s Farm Labor Survey (FLS). A singular state/regional AEWR for non-range field and livestock workers (for such farm work positions as graders, sorters, equipment operators, crop/nursery/greenhouse workers, ranch/aquaculture farm workers, packers, and packagers) is derived as the average of the FLS wage data for six Standard Occupational Classification (SOC) codes and titles.
Despite its economic and market arguments, the AEWR-setting mechanism often drew criticisms. Some contend that state/regional-level AEWRs could be too high. This especially applies to the last two years, when some farming territories experienced abrupt, radical spikes in their AEWRs. This year, the prevailing national AEWR is $17.74 per hour, which is 18.01% over the 2022 rate and translates to an annual average nominal growth of 5.68% over the last three years. This rate exceeds historical nominal AEWR growth trends estimated at only 3.52% between 1991 and 2022.
In understanding the H-2A affordability issue, the following issues need to be clarified.
First, AEWR hikes are market-determined and reflect the previous year’s elevated market equilibrium rates. It follows that higher AEWRs indicate an aggressive farm labor market, where domestic workers are paid higher wages for farm jobs.
Second, the H-2A affordability issue under rising AEWRs becomes more concerning when the program’s mandated comprehensive compensation package is accounted for in the compensation equation. Calvin, Martin, and Simnitt (2022) estimate a 5% wage premium added to the AEWR when calculating total H-2A compensation. The suggested premium accounts for the mandated additional H2A fringe benefits (including housing, meals, transportation, and insurance) that could add $2.55 per hour in hourly wages but also considers offsetting employers’ benefits realized from non-payment of SS & unemployment taxes.
Finally, there is the aggregation issue employed in the existing AEWR determination process. Geographic aggregation (AEWRs for 18 geographic entities) raises questions on whether an AEWR set for several states in a region accurately captures local labor market conditions at the state level.
In this article, we investigate another form of aggregation that sets one AEWR for all types of jobs and industry employers based on wage data collected from a selected core of 6 SOC-classified jobs. Table 1 shows that the selected six SOC job titles comprise the bulk (96.46%) of all H-2A workers hired in 2024. The resulting differentials between the national average AEWR for 2024 ($16.98 per hour) and the average hourly wage for each SOC job category are all negative, thus establishing a cheaper H-2A hiring option since AEWR is consistently lower than all six domestic farm wage rates. When the H-2A mandated comprehensive remuneration package with fringe benefits is included in the equation (“adjusted AEWR” in Table 1), three negative wage differential results are registered (meaning H-2A labor is cheaper than domestic labor). Notably these negative results apply to three SOC job positions that comprise 91.62% of all H-2A hires in 2024.
All told, our analysis makes an important clarification on the affordability of H-2A workers. Our results indicate that at the national level, most U.S. farm employers of H-2A workers in 2024 find that such employment decisions have not been generally more costly than the domestic farm employment option. However, we qualify our deduction by clarifying that our analysis here is confined only to the aggregation of job categories and farm industries. Our further research in this area will attempt to validate if such trends in wage differentials and their implications on H-2A labor affordability persist at the state-level under more differentiated, localized farm labor market dynamics and conditions.
Figure 1. State and Regional Adverse Effect Wage Rates, 2025
Sources: American Farm Bureau Federation and USDA-National Agricultural Statistics Service
Table 1. H-2A Employment, National Average Wages, and Wage Differentials Relative to AEWR under the Standard Occupational Classification (SOC) Codes Used in the AEWR Formula, 2024
SOC Code
Job Title
Number of Certified H-2A Workers
Percent of All Certified H-2A Workers (%)
National Average Hourly Wage (NAHW)
Difference between AEWR and NAHW1
Difference between Adjusted AEWR and NAHW2
$ per Hour
45-2041
Graders and Sorters, Agricultural Products
1.246
0.32
18.35
(1.37)
(0.52)
45-2091
Agricultural Equipment Operators
31,837
8.27
19.35
(2.37)
(1.52)
45-2092
Farmworkers and Laborers, Crop, Nursery, and Greenhouse
319,545
83.03
18.30
(1.32)
(0.47)
45-2093
Farmworkers, Farm, Ranch, and Aquacultural Animals
18,042
4.69
17.45
(0.47)
0.38
45-2099
Agricultural Workers, All Other
55
0.01
17.75
(0.77)
0.08
53-7064
Packers and Packagers, Hand
508
0.13
17.40
(0.42)
0.43
Notes: 1 The 2024 national AEWR is $16.98/hour. 2 The 2024 AEWR is adjusted by a 5% incremental factor to account for H-2A’s mandated fringe benefits (housing, meals, transportation, and health insurance, among others) Sources: USDA National Agricultural Statistics Service and Department of Labor
Table 1.(Image Format) H-2A Employment, National Average Wages, and Wage Differentials Relative to AEWR under the Standard Occupational Classification (SOC) Codes Used in the AEWR Formula, 2024
References:
Calvin, L., P. Martin, and S. Simnitt. (2022). Adjusting to Higher Labor Costs in Selected U.S. Fresh Fruit and Vegetable Industries. EIB-235, Economic Research Service, U.S. Department of Agriculture, Washington, DC.
“In this world nothing can be said to be certain, except death and taxes” – Benjamin Franklin, 1789.
On July 3rd, 2025, the passage of H.R. 1, commonly known as the One Big Beautiful Bill, made several changes to federal spending that directly impact American agriculture, including a permanent increase to the unified credit to $15 million per individual starting in 2026 and indexed to inflation moving forward. Why does this matter to American agriculture? Without the change to the unified credit in H.R.1, the credit would have sunset back to the 2018 amount of $5 million per individual adjusted for inflation which would have been around $7 million. For estates over the amount of the unified credit, the maximum estate tax rate is 40% of the net worth that exceed the current unified credit. As a simplified example, if a farmer owns a tractor worth $100,000 and has already used their unified credit, then their estate would need to pay $40,000 in taxes for that tractor at their death.
While $7 million sounds like a tremendous amount of money to an individual, in an economic reality where farm equipment can cost more than $800,000 per piece of equipment and land can bring more than $20,000 per acre in certain parts of the country, this credit can be rapidly expended. The net worth over this amount would be subject to the estate tax. A popular saying amongst producers is that farmers are “asset rich and cash poor.” This means that succeeding generations could be forced to sell off land or equipment to meet estate tax obligations. This has not been the case over the past several years because of the high unified credit, so the estate tax has only been an issue for some of the larger farms in the country. There is also the issue of portability, which is combining the unified credits of married couples with some simple estate and tax planning. Portability essentially allows the surviving spouse to double the unified credit in many cases. With a high unified credit and portability, this makes the likelihood of the vast majority of farming operations paying estate taxes remote for the immediate future.
So, does this solve the problem? H.R. 1 resolves one problem centered on the estate tax; however, a larger problem is looming for American agriculture, and that is the lack of succession planning. Suppose the principal operator of a farming operation is incapacitated in the immediate future. Do other members of the farming operation have the necessary experience and knowledge to keep the farm economically viable? Has the older generation planned and prepared for a transition in a way that may not fracture relationships between members of the younger generation? Because farms and families are unique, this means that succession plans are also going to need to be carefully tailored to meet their specific needs. Attorneys and CPAs have not done a good job of convincing their farm clients of the importance of succession planning, and farmers are more than willing to put off the issue to a later date. The problem is that Benjamin Franklin was correct when he stated that death was a certainty. Avoiding succession planning does not make the problem go away, it just leaves an even larger burden on the next generation.
The U.S. fruit and vegetable (F&V) industry is a cornerstone of American agriculture, but it faces continuing challenges from imports and rising production costs. According to USDA, 2025 cash receipts for all crops are projected at $236.6 billion, a 2.5 percent decline from 2024. While fruit and nut cash receipts are expected to rise slightly, those of vegetables are set to fall. Despite strong consumer demand for fresh produce, its perishable nature and exposure to international competition leave U.S. growers in a vulnerable position. Two pressures dominate: a widening trade deficit fueled by imports, and rising input costs, especially labor.
For decades, U.S. agriculture ran a trade surplus. That changed in 2019, when imports began outpacing exports (figure 1). By 2021, the overall agricultural trade balance turned negative and has stayed there since. Fruits and vegetables lie at the heart of this shift. In 2024, horticultural imports (excluding nuts, alcoholic beverages, cut flowers, and essential oils) totaled $49.8 billion—about one-quarter of all agricultural imports. Increasingly, these imports arrive during U.S. harvest windows, driving down domestic prices at critical times. Exports, by contrast, were only $15.9 billion. Mexico dominates U.S. fresh produce imports, particularly vegetables, while Canada, Peru, and Chile are major fruit suppliers. Canada, Peru, and Guatemala also stand out in vegetables. These countries benefit from lower labor costs, government subsidies, favorable climates, and large seasonal labor pools. The result is a structural disadvantage for U.S. growers, who face high costs while competing against cheaper imports.
Even as imports increase, U.S. growers must contend with rising production costs. Specialty crops like fruits and vegetables are among the most labor-intensive in agriculture. Unlike corn or soybeans, they cannot be fully mechanized and require hand-harvesting, pruning, and close crop management. According to USDA, production expenses across the farm sector are projected to reach $467 billion in 2025, up 2.6 percent from 2024 and more than 36 percent higher than in 2018. Labor is the single largest cost driver for F&V producers. Since most workers are hired through the H-2A guest worker program, rising wage rates – mandated through the Adverse Effect Wage Rate – have significantly increased costs. Growers also face higher fees, stricter compliance rules, and added administrative burdens tied to H-2A. Surveys confirm these challenges: in 2024, 44 percent of growers cited H-2A labor costs as their top concern, while 54 percent reported labor shortages—up sharply from 41 percent in 2019.
The U.S. F&V industry is squeezed between cheaper imports and rising domestic costs. Labor shortages and wage pressures magnify these risks, leaving growers uncertain about future profitability. Given the importance of specialty crops to the agricultural economy, strategies to strengthen resilience are urgent. These may include risk management tools, expanded research into labor-saving technologies, and policies that level the competitive playing field. Without such measures, U.S. growers will remain caught between global market forces and domestic labor constraints.
Figure 1. Trade Balance for U.S Agriculture and the F&V Industry
Source: USDA Outlook for U.S. Agricultural Trade (2012-2025).
The USDA released the latest World Agricultural Supply and Demand Estimates (WASDE) on September 12th. Last month’s report introduced the first yield estimates of the year for various crops, and this month’s report updates those yield estimates while adjusting planted and harvested acreage estimates given data from the USDA Farm Service Agency (FSA) certified acres. The September report did not show drastic changes, as corn production is still expected to set a new record, in part due to increased production in southern states.
The record corn production forecast in the last report is projected to increase slightly to 16.8 billion bu. This increase in corn production is due to estimated planted acres increasing to 98.7 million acres, up 1.4 million acres from the August estimate. The production increase comes despite the corn yield forecast decreasing 2.1 bu. per acre from last month’s forecast to 186.7 bu. per acre. This decrease in the national corn yield forecast was driven by 1-3 bu. per acre reductions in several major-producing Midwest states, including Iowa, Illinois, Minnesota, Nebraska, North Dakota, and South Dakota.
Figure 1: 2025 Forecast Corn Production by State (Change from 2024 in parentheses), million bushels
Data source: USDA NASS. Crop Production. September 12, 2025.
Overall, 1.95 billion more corn bushels are expected to be harvested compared to last year. One quarter of this new production (489 million bu.) comes from Southern states (Figure 1). Mississippi is expected to have the largest increase at 70 million bu., followed by North Carolina at 60 million bu., and Louisiana at 59 million bu. Texas and Kentucky remain the largest corn producers in the region, at 250.1 million bu. and 248.5 million bu., respectively.
Other crops saw small changes in this month’s report. Cotton had minor changes in production and use forecasts relative to August, leading to no change in ending stocks, and the forecast price remains at 64.0 cents per lb. Soybean ending stocks for 2025/26 are forecast to increase by 10 million bushels, resulting in a $0.10 price decline to $10.00 per bu. Sorghum and wheat both saw no changes to the projected price for this marketing year.
