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  • 2026 Wheat Outlook

    2026 Wheat Outlook

    The world wheat situation for the 2025 crop was dominated by overall favorable growing conditions.  According to the December 2025 USDA World Agricultural Supply and Demand Estimates (WASDE), world wheat production continued a long-term increasing trend, reaching a record of 837.81 million metric tons, about 31 billion bushels.  In the U.S., the average wheat yield for the 2025 crop also continued a long-term increasing trend to a record high 53.3 bushels per acre, beating the old record of 52.7 bushels in 2016.  

    With record production and yield, what do supply and demand fundamentals in the wheat market portend for price expectations in 2026?  

    For the U.S., wheat planted area has levelled off over the last few years to around 45 million acres. Last winter was under the influence of an El Niño weather pattern, generally associated with cooler temperatures and above normal precipitation in the Southern Plains (2016 was an El Niño year, too). The forecast for the winter of 2026 is for La Niña conditions to be present. La Niña winters are generally warmer and drier than normal. That is not a favorable forecast for above normal yields. With little change in acreage, the U.S. wheat crop in 2026 is likely to be smaller than 2025.

    U.S. wheat domestic use is little changed over the last 20 years (Figure 1). Food use is right around 950 million bushels per year, varying no more than 59 million bushels since 2005/2006.   Wheat for feed averages about 135 million bushels per year. The high in feed use (360 million bushels) came in 2012 with the major drought in the Corn Belt. 

    Figure 1. U.S. Wheat Use

    Source: USDA, Office of the Chief Economist, World Agricultural Supply and Demand Estimates

    That leaves exports. On average, exports and food use are about even over the last 20 years, but the range in exports is much more variable, from a high of 1.3 billion bushels to a low of 707 million.  There is significant competition in the export market for wheat, even though the U.S. is one of the top exporters in the world (Figure 2).   

    Figure 2. World Wheat Exports

    Source: USDA, Office of the Chief Economist, World Agricultural Supply and Demand Estimates

    World consumption and production outside of the major exporting countries (Argentina, Australia, European Union, Russia, Ukraine, and the U.S.) shows a production deficit every year since 1990 (Figure 3). That deficit has widened from about 70 million metric tons per year in the early 1990s to more than double, averaging over 160 million metric tons the last three years. The rate of deficit is increasing by about 3 million metric tons per year, providing a need for imports to those areas. 

    Figure 3. Production and Domestic Consumption of Wheat: world less major exporters

    Source: USDA, Foreign Agricultural Service, PSD

    The price outlook for wheat in 2026 looks better than 2025 based on what will likely be a smaller U.S. wheat crop. But the real question will be production levels globally, especially among our major export competitors. Meanwhile, consumption of wheat is strong.  In 1990, the population in countries outside Argentina, Australia, the EU, Russia, Ukraine, and the U.S. represented 82% of the population total (IMF, 2025), and per capita consumption of wheat in these ‘rest of the world’ countries was 75.6 kilograms per person year. In 2025, the population share of these ‘rest of the world’ countries increased to 87% of global population, and per capita consumption increased to 85.6 kilograms per person per year. The world is hungry for wheat.

    References

    International Monetary Fund. IMF Datamapper, accessed December 12, 2025, https://www.imf.org/en/home.  

    USDA, Foreign Agricultural Service, PSD, accessed December 10, 2025.

    USDA, Office of the Chief Economist, World Agricultural Supply and Demand Estimates, December 2025. 


    Welch, Mark. “2026 Wheat Outlook.Southern Ag Today 5(51.3). December 17, 2025. Permalink

  • Milk Prices Falling Fast

    Milk Prices Falling Fast

    Dairy product prices and milk prices usually get a demand bump leading into the holidays due to baking ingredients and cheese.  That bump never materialized this Fall as rapidly rising milk supplies swamped any demand led increase in prices.  

    Profitable milk prices in 2024 and lower feed prices started herd expansion.  Milk processing capacity has expanded, as well, supporting the increase in production.  Record high cattle prices have played an important role in dairy herd expansion through cull cow revenues and much higher prices for crossbred calves from dairy cows and beef bulls, often referred to as “beefxdairy” or “beef on dairy” calves.  

    Starting with the dairy herd, the number of dairy cows hit 9.581 million head in September 2025.  That was 228,000 head more than in September 2024 and the most since the early 1990s.  While the number of dairy cows did decline by 6,000 head in October, the herd remains large.  

    Like the rest of livestock agriculture, productivity has been increasing for many years.  Pounds of milk per cow totaled 2,033 in October, up 1.5 percent from October 2024.  More milk per cow, combined with the most cows since the early 1990s, produced 19.5 billion pounds in October, a 3.7 percent increase over October 2024.  

    Milk and dairy product prices began to decline under the weight of record large milk production.  By early December, butter prices averaged $1.60 per pound, down from $2.59 per pound last year at this time.  Cheddar cheese, reported in 40 pound blocks, dropped to $160 per pound in early December compared to $1.78 last year.  Non-fat dry milk prices are about 18 percent lower than last year.  These product prices are used to calculate Class III and Class IV milk prices under federal milk marketing orders.  Class IV milk prices declined to under $14.00 per cwt in November, with Class III prices at $17.18 per cwt.  

    These milk prices are very low and will lead to financial losses for many producers.  Losses should lead to some supply response, reducing milk production.  But, the impact of low milk prices will be offset somewhat by continued high cull cow and calf returns.  Dairy cow culling has increased late this year, slightly surpassing dairy cow slaughter in the second part of 2024.


    Anderson, David. “Milk Prices Falling Fast.Southern Ag Today 5(51.2). December 16, 2025. Permalink

  • Management Priority #1

    Management Priority #1

    Steven Klose, Tiffany Lashmet, and Jordan Shockley

    Managing a farm or ranch is hard to say the very least.  Running your own business of any kind is difficult, but the nature of production agriculture is particularly challenging.  Long production cycles seem to magnify every decision, while the feedback loop between decision and outcome is delayed and unclear.  Operating in a competitive environment with little-to-no market power or influence, ag producers are price takers when it comes to purchasing inputs and price takers when it comes to selling commodities.  When it comes to the production process, you could say… weather takers.  Layer on top of this the pressure many producers feel of maintaining the family’s legacy, and it’s easy to get to the point of questioning “how much more can I take?”

    It is not lost on us and our team of Southern Ag Today authors that offering management advice on Monday mornings is a little like a football fan offering quarterback advice from the comfort of the recliner.  We try to keep the tips, data, tools, and other information as relevant as possible, and one of our measuring sticks for topics is whether or not our producer audience actually has the time to do anything with the information.  Because we know your job is busy and overwhelming, we can confidently say you have no choice but to make time for today’s management topic.

    Stress. It can weigh heavy, affecting your emotional, physical, and mental health. 

    Among the endless list of things to manage, the stress of it all feels like another not-so-manageable thing you have to deal with. Too often, your physical and mental well-being take a back seat to everything else that must be done.  Remember, this is very much like the oxygen mask on the airplane.  Your health, both physical and mental, must be priority number one.  You take good care of your equipment and livestock.  Don’t ignore yourself. You are the most important asset on the farm/ranch.

    Recently, I had a small leak in the seam on the side of my water heater. It was small. The problem wasn’t urgent. The drain pan & drain line were working as they should. And, of course I was busy.  For longer than I care to admit, each day/week held more important tasks than finding a plumber.  I’m sure you know how this ends.  There came a day when the water heater burst.  In that moment, I was managing the consequences of not managing my priorities.  Overwhelming stress and your health can be like that.  

    We want to encourage you. Don’t ignore your health, especially if you have been putting off some nagging mental or physical issue.  There’s no better time than now to address it.  Of course, with the extra pressures of this time of year, if the mental stress has already pushed you too far, please check out some of the immediate mental health resources available.  Farm Hope and AgriStress Helpline are two programs available in Texas.  The 988 Suicide & Crisis Lifeline is available nationwide. To find local help in your state, check out the National Agricultural Law Center’s compilation of Stress & Mental Health resources here:  https://nationalaglawcenter.org/center-publications/family/mentalhealth/

    As 2025 comes to a close, we wish you a Happy Holiday Season and the best of Health and Prosperity in 2026. 


    Klose, Steven, Tiffany Lashemt, and Jordan Shockley. “Management Priority #1.Southern Ag Today 5(51.1). December 15, 2025. Permalink

  • California Defines Ultra-processed Foods

    California Defines Ultra-processed Foods

    This month, California Governor Gavin Newsom signed AB 1264 into law. This legislation creates the first statutory definition of ultra-processed foods (UPF) and makes California the first state in the nation to ban certain UPFs from being served in schools. This is particularly noteworthy because there is no universally accepted definition of UPF, whether in law or in science. AB 1264’s enactment is also important because it follows recent announcements from the US Department of Agriculture (USDA) and the Food and Drug Administration (FDA) that the federal agencies are collaborating to create a definition for UPFs. 

    California’s AB 1264 

    With a goal of making school meals healthier, California enacted AB 1264. This law, along with creating a legal definition for UPFs, prohibits certain foods meeting the definition from being served in California’s public schools. Specifically, the law bans “restricted school foods” and “UPFs of concern” from being served in elementary, middle, or high schools after July 1, 2035. The classification of foods as being “restricted school foods” or “UPFs of concern” depends on whether the foods meet the definition of UPFs laid out in the California law. 

    Under the law, UPFs are defined as food or beverages that contain: 

    • A substance available in FDA’s Substances Added to Food database that has a FDA-defined technical effect, and 
    • Either 1) high amounts of saturated fat, sodium, or added sugar, or  2) a non-nutritive sweetener

    FDA’s Substances Added to Food is a searchable database that includes FDA regulated ingredients such as food additives, color additives, and Generally Recognized as Safe substances that are listed in FDA regulations. California’s new UPF definition applies to substances that can be found in the database and are designed with certain technical effects, such as stabilizers and thickeners or colors and coloring adjuncts. The definitions of these technical effects can be found in 21 CFR § 170.3(o)

    To meet the UPF definition, a food or beverage must contain one of the substances with a defined technical effect and contain either 1) high amounts of saturated fats, sodium, or added sugar or 2) a nonnutritive sweeter. Specifically, the law defines a product with a high amount of saturated fat as a food or beverage deriving 10 percent or greater of its total energy from saturated fat. Similarly, high sodium food or beverages contain a ratio equal to or greater than 1:1 milligrams of sodium to calories. Finally, added sugar products meeting the definition include food or beverages with at least 10 percent of total energy derived from added sugars. Thus, under California’s UPF definition, a food containing a substance with a defined technical effect that derives 12 percent of its total energy from added sugars would be a UPF. 

    Further, California’s definition would also include a food that contains 1) a substance with a defined technical effect and 2) a non-nutritive sweetener. A non-nutritive sweetener is defined as a substance with less than 2 percent of the caloric value of sucrose per equivalent unit of sweetening capacity. 21 CFR § 170.3(o)(19). California lists several examples of a non-nutritive sweetener including sucralose, steviol glycosides, and lactitol. 

    Prohibiting specific UPFs from schools 

    Along with creating a definition for UPFs, the California law also prohibits “restricted school foods” and “UPFs of concern” from being served in schools. UPFs of concern include food that 1) meets the law’s outlined UPF definition and 2) is classified as “of concern” through regulations adopted by the California Department of Public Health (CDPH). Restricted school foods are defined very broadly by the law as a food or beverage that contains one or more of the listed substances with a defined technical effect and is also restricted from service or sale in schools via CDPH regulations. The law directs the CDPH to define both UPFs of concern and restricted school foods after considering several factors. CDPH’s consideration of the listed factors must be completed by June 1, 2028. By July 1, 2029 schools must begin to phase out both restricted school foods and UPFs of concern, and by July 1, 2032 a vendor shall not offer restricted school foods or UPFs of concern to a school. 

    Significance of California’s UPF definition

    The timing of the enactment of AB 1264 is significant because the USDA and FDA are currently collaborating to establish a definition of UPFs. On July 23, 2025, the agencies published a press release announcing a joint Request for Information to “gather information and data to help establish a federally recognized uniform definition for UPFs.” The agencies have not indicated that they plan to prohibit UPFs in school meals, as California has done, but they have stated a uniform definition will “allow for consistency in research and policy.” California’s law might influence the definition USDA and FDA create. Further, as other state legislatures begin their 2026 sessions in the upcoming months, they might model California’s law in their own UPF definitional attempts. To read more about the California UPF definition, click here to read NALC article ‘MAHA’ Movement: Defining Ultra-processed Foods. 

  • Administration Providing Economic Assistance Payments to Struggling Farmers

    Administration Providing Economic Assistance Payments to Struggling Farmers

    Joe Outlaw and Bart L. Fischer

    On Monday, December 8th, President Trump and USDA Secretary Rollins announced the creation of the Farmer Bridge Assistance (FBA) Program, a new round of economic assistance totaling $12 billion for the 2025 crop, with $11 billion for row crop farmers. While details such as individual commodity payment rates have not been made available, it was announced that the structure of FBA would be similar to the Emergency Commodity Assistance Program (ECAP) that producers received earlier this year due to low commodity prices received for the 2024 crop. Recall the ECAP program provided assistance based on a producer’s planted acres of eligible commodities and 50% of acres that were prevented from being planted. According to USDA, acres that were prevented from being planted will not be eligible for FBA.

    Individual payment rates are expected to be announced the week of December 22nd. Payments are expected to be released by February 28, 2026. It was announced that payment limits would be different from ECAP. Payment limits will be $155,000 per person or legal entity, and the AGI limits will be $900,000. In ECAP, producers could double their limit if 75% of their AGI was from farming. The new assistance does not have this provision.

    The last two years have been terrible financial years for most crop farmers across the United States. While producers will be grateful for the assistance, their estimated losses for the 2025 crop exceed $40 billion. The previous ECAP program paid 26% of losses to producers for the 2024 crop. Based on the estimates of loss for the 2025 crop, it appears the newly announced program will likely cover a similar portion of producer losses.

    The announcement and subsequent details of the program when released will allow lenders to include the amount of the assistance in producer’s loan packages which should help those producers who are trying to secure operating loans for the 2026 crop year.


    Outlaw, Joe, and Bart L. Fischer. “Administration Providing Economic Assistance Payments to Struggling Farmers.Southern Ag Today 5(50.4). December 11, 2025. Permalink