Southern Ag Today

Blog

  • Hog Prices Hit 3-Year Highs

    Hog Prices Hit 3-Year Highs

    We’ve written a lot in Southern Ag Today over the last couple of months on cattle and beef prices, but some other things are happening in livestock markets.  Hog prices have jumped to their highest level in three years, bringing some needed profits to the industry.  

    Weekly national average barrow and gilt carcass prices, net of premiums and discounts, hit $113.14 per cwt at the end of June.  That was the highest price since the beginning of September 2022.  The average price a year ago was $88.79 per cwt.  Higher hog prices are showing up in higher wholesale pork prices, as well.  Wholesale hams, pork bellies, loins, ribs, and trimmings for sausage have all been increasing in price in recent weeks.  

    Hog and pork prices tend to increase seasonally during the Summer due to reduced production during summer months.  Over the last 8 weeks, barrow and gilt slaughter is about 2 percent less than last year.  Total pork production is down 0.7 percent over the last 8 weeks compared to last year.  To get an idea of the seasonal decline in pork production this year, weekly production averaged 507.5 million pounds in June compared to 555.3 million pounds per week in January.  That seasonal decline is not unusual compared to past years.

    The price increase, especially when combined with lower feed costs, has brought some much needed profits to the production side of the industry.  The industry has been largely treading water over the last year following large financial losses from 2022 into early 2024.  Small profits have kept the sow herd declining in number, down to 5.979 million sows on June 1, 2025, the fewest since 2016.  While the sow herd has been declining, the number of pigs saved per litter has continued to climb, hitting a record 11.7 pigs per litter over the last 6 months.  

    It appears that higher prices and profits will work their magic to spur a production increase in 2026.  Hog producers reported in the USDA’s June Hogs and Pigs report to increase their intended number of sows farrowing in the last quarter of 2025.  Increased sows farrowing combined with more pigs per litter should boost production in the first half of 2026.  

    Anderson, David. “Hog Prices Hit 3-Year Highs.” Southern Ag Today 5(28.2). July 8, 2025. Permalink

  • Recent Trends in Farm Operating Costs

    Recent Trends in Farm Operating Costs

    In May, the USDA Economic Research Service (ERS) released commodity cost and return estimates for crop and livestock products grown in the United States. These estimates are published twice a year and offer insights into the costs faced by the “average” producer at the national and regional levels across the United States. Additionally, on June 18, ERS released cost-of-production forecasts for the 2025 and 2026 production years. This article uses the ERS data to examine changes in operating costs[1] for producers in southern states since 2022, when farm operating costs peaked, and to estimate future cost trends.

    Figure 1 compares operating costs for selected crops in 2022, 2023, and 2024 based on ERS data. Note that ERS divides states into farm resource regions for their estimates. The Prairie Gateway includes most of Texas, parts of New Mexico, Oklahoma, Colorado, and Nebraska, as well as all of Kansas. The Southern Seaboard consists of the easternmost counties of Texas, the northwestern counties of Louisiana, the southeastern counties of Mississippi, and most of Alabama, Georgia, South Carolina, North Carolina, and Virginia. Finally, the Mississippi portal covers the eastern parts of Arkansas and Louisiana, along with the western parts of Tennessee and Mississippi.

    The data show that operating costs in the southern United States have decreased from their recent highs in 2022; however, they are still significantly above their 10-year averages. The only exception is cotton in the Prairie Gateway states, where increases in ginning costs (due to higher production in 2023 and 2024) and interest costs were enough to offset reductions in other expenses. Table 1 outlines the changes in specific operating costs from 2022 to 2024, explaining why overall costs have decreased since 2022. Unsurprisingly, reductions in operating expenses are mainly due to lower costs for fertilizer, chemicals, and fuel over the past two years.  

    Unfortunately for producers, the recent decline in operating costs is likely to be temporary. Table 2 presents the ERS forecasts for corn, cotton, peanuts, and soybeans’ operating expenses in 2025 and 2026, alongside the 2024 cost estimates for comparison. The forecasts indicate that operating expenses will remain close to their 2024 level this year and are expected to rise slightly in 2026. Note that the commodity cost forecasts are reported at the national level rather than the regional level. However, regional and national trends are highly correlated in the ERS cost estimates. Therefore, it is reasonable that regional cost forecasts would resemble the national forecast provided by ERS.

    Figure 1. Operating Costs ($/ac) for Selected Crops in Southern Regions, 2022-2024 and 10-Year Average

    Table 1. Change in Operating Costs ($/ac), 2022-2024 

     Table 2. Estimated and Forecasted Operating Costs, 2024-2026

    [1] Operating costs for all crops include seed, fertilizer, chemicals, custom services, fuel/lube/electricity, repairs, purchased irrigation water, and interest on operating inputs. In addition, cotton operating costs includes ginning, and peanut operating costs includes commercial drying.     

    References and Resources

    U.S. Department of Agriculture, Economic Research Service. Commodity Costs and Returns data. https://www.ers.usda.gov/data-products/commodity-costs-and-returns/documentation    

    Wright, Andrew. “Recent Trends in Farm Operating Costs.” Southern Ag Today 5(28.1). July 7, 2025. Permalink

  • Two Months In: Assessing the Movement on FDA’s Plan to “Phase Out” Synthetic Dyes

    Two Months In: Assessing the Movement on FDA’s Plan to “Phase Out” Synthetic Dyes

    On April 22, 2025, Department of Health and Human Services (HHS) Secretary Robert Kennedy, Jr. announced the agency’s plan to “phase out” petroleum-based synthetic color additives. Though the announcement did not include any formal rulemaking or industry guidance documents, the agency described it as “a significant milestone in the administration’s broader initiative to Make America Healthy Again.” This article will assess where the phase out plan sits roughly two months after its announcement. 

    Background on synthetic dyes

    Color additives are defined by the Food and Drug Administration (FDA) as “a dye, pigment or other substance, which is capable of imparting color when added or applied to a food, drug, cosmetic or to the human body.” Color additives are distinguished from food additives by the Federal Food, Drug and Cosmetic Act (FDCA) and require pre-approval from the FDA before they can be used in food. Specifically, there are two types of color additives – naturally occurring and synthetic. Synthetic dyes are manmade, and the FDA requires that each batch of synthetic dye must be certified as safe for its approved purpose. Thus, all food in the US food supply that contains synthetic dyes has been certified by the FDA that the synthetic dye is safe at its approved level for its approved purpose. Synthetic dyes, which are the color additives targeted by this initiative, are typically petroleum-based. There are currently nine synthetic dyes that might be found in food today, and this initiative aims to phase all nine out of the food supply by the end of 2026.

    FDA’s stated actions

    Specifically, the phase out plan outlined six measures that the FDA will take:

    • Establishing a national standard and timeline for the food industry to transition from petrochemical-based dyes to natural alternatives.
    • Initiating the process to revoke authorization for two synthetic food colorings – Citrus Red No. 2 and Orange B – within the coming months.
    • Working with industry to eliminate six remaining synthetic dyes – FD&C Green No. 3, FD&C Red No. 40, FD&C Yellow No. 5, FD&C Yellow No. 6, FD&C Blue No. 1, and FD&C Blue No. 2 – from the food supply by the end of next year.
    • Authorizing four new natural color additives in the coming weeks, while also accelerating the review and approval of others.
    • Partnering with the National Institutes of Health (NIH) to conduct comprehensive research on how food additives impact children’s health and development.
    • Requesting food companies to remove FD&C Red No. 3 sooner than the 2027-2028 deadline previously required.

    Industry “phase out” 

    The third prong of FDA’s six-pronged phase out plan was to work with industry to eliminate six synthetic dyes – FD&C Green No. 3, FD&C Red No. 40, FD&C Yellow No. 5, FD&C Yellow No. 6, FD&C Blue No. 1, and FD&C Blue No. 2 – from the food supply by the end of 2026. While many were skeptical of the voluntary nature of this plan, in the two months since the announcement, several food companies have announced their intentions to remove synthetic dyes from their food portfolios. For example, Kraft Heinz, General Mills, Conagra Brands, Nestle USA, PepsiCo, and Tyson Foods have all announced their commitment to removing synthetic dyes from their products. 

    Part of the reason for the skepticism was that though HHS Secretary Kennedy stated that there was an “understanding” between FDA and food manufacturers at the phase out plan’s press conference, no formal agreement was published, nor was any food industry representative present at the event. Part of the willingness of food industry might have something to do with the movement of this issue on a state level. California and West Virginia have banned foods containing certain food additives from being sold in their state. Additionally, California, Delaware, Louisiana, Tennessee, West Virginia, Virginia, and Utah have passed legislation banning school meals from containing certain food additives. Texas and Louisiana have passed legislation requiring disclosure labels on foods containing certain listed food additives – important to note that at the time of writing this article the Louisiana bill has not yet been signed by its governor. This state level inconsistency might have led to a desire by industry for federal movement on the color additive conversation. Specifically, FDA Commissioner Marty Makary, MD, MPH, stated in the press conference that food companies “want to do this,” and that they particularly “don’t want to deal with patchwork of 30 different state plans.”

    New Color Additives 

    The fourth prong of the phase out plan has also seen movement in the past two months. In May, the FDA announced its approval of three new natural color additives. These color additives occur naturally and are not man made, but even natural color additives must be approved as safe for their intended use by the FDA before they can be used in foods. 21 § USC 379e. Here, the FDA has approved Galdieria extract blue, butterfly pea flower extract, and calcium phosphate. Galdieria extract blue produces a blue color and is derived from the unicellular red algae Galdieria sulphuraria. Butterfly pea flower extract is also a blue color and it can be used to produce shades of blue like bright blues, intense purple, and natural greens. Calcium phosphate is a white color approved for use in ready-to-eat chicken products, white candy melts, doughnut sugar, and sugar for coated candies. 

    Additionally, as part of the six-pronged plan, FDA stated that it would fast track the authorization of four new natural dyes – the three approved here, and gardenia blue. The FDA also said it would accelerate the review and approval of other natural dyes and would issue guidance to industry. So far, the FDA has not published a guidance, nor made any announcements about the approval of gardenia blue or other natural dyes. 

    Partnership with NIH 

    The fifth prong in FDA’s phase out plan was to partner with the National Institutes of Health (NIH) to conduct comprehensive research on the effect food additives might have on the health and development of children. NIH is a federal agency housed in the Department of Health and Human Services and is primarily responsible for conducting and supporting federal medical research. On May 9, 2025, the FDA announced the creation of a joint research initiative with the NIH, titled the Nutrition Regulatory Science Program. This program will implement a nutrition research agenda that provides “critical information to inform effective food and nutrition policy actions to help make Americans’ food and diets healthier.” Specifically, the initiative highlighted the following questions it will aim to answer:

    • How and why can ultra-processed foods harm people’s health?
    • How might certain food additives affect metabolic health and possibly contribute to chronic disease?
    • What is the role of maternal and infant dietary exposures on health outcomes across the lifespan, including autoimmune diseases?

    This joint initiative will mirror the FDA and NIH’s Tobacco Regulatory Science Program in structure and collaboration with FDA providing expertise in regulatory science and NIH providing the infrastructure for research. FDA states that the initiative will bring together experts in chronic disease, nutrition, toxicology, risk analysis, behavioral science, and chemistry, but is committed to conducting research that is “fair, independent and free of conflicts of interest.”

    Remaining prongs

    In the past two months, there has been no movement yet on the remaining three prongs of the FDA’s phase out plant. First, the FDA has not published an industry guidance document, promulgated formal rulemaking, nor posted any further documents regarding a national standard and timeline. Second, the FDA has not publicly announced that it has initiated the process for revoking Citrus Red No. 2 or Orange B. Last, though no company who has publicly committed to removing synthetic color additives from its food portfolio specifically mentioned Red Dye 3, it can likely be assumed that it is included under the board definition most are using to describe FD&C dyes. 

    Conclusion 

    In only two months, the FDA has moved extraordinarily fast on accomplishing portions of its six-pronged phase-out plan. With an administration that has stated its commitment to “restor[ing] the focus on the ‘F’ in FDA,” it can be assumed that food-related policies will continue to be a priority. For up-to-date information on FDA announcements, click here to subscribe to NALC’s bi-weekly newsletter “The Feed.”  To learn more about the phase out plan, click here to read NALC article “FDA Announces Plan to ‘Phase Out’ Synthetic Dyes.” To learn more about other FDA updates, click here to read “FDA Updates: June 2025.” 

    Stone, Emily. “Two Months In: Assessing the Movement on FDA’s Plan to “Phase Out” Synthetic Dyes.” Southern Ag Today 5(27.5). July 4, 2025. Permalink

  • Sign-up for Natural Disaster Relief Beginning Soon

    Sign-up for Natural Disaster Relief Beginning Soon

    As we noted back in December 2024, the American Relief Act provided $30.78 billion in relief for agricultural producers—$10 billion for economic assistance and $20.78 billion for natural disaster relief. 

    Signup for the economic assistance—known as the Emergency Commodity Assistance Program (ECAP)—began on March 19, 2025, and runs through August 15, 2025. Initial ECAP payments were factored by 85% to ensure total program payments do not exceed available funding. If all goes as planned, FSA may issue a second payment in August.

    USDA has also started rolling out the $20.78 billion in natural disaster assistance. For example, on May 29, 2025, USDA announced that approximately $1 billion in Emergency Livestock Relief Program (ELRP) payments were being issued to affected producers. At this point, anticipation is building for sign-up to begin for the Supplemental Disaster Relief Program (SDRP). SDRP is the successor to the Wildfires and Hurricanes Indemnity Program (WHIP) and the Emergency Relief Program (ERP) summarized in Table 1.

    Table 1. Recent History of Natural Disaster Relief for Agricultural Producers

    ProgramCrop YearAuthorizing StatuteEnactment Date
    WHIP2017P.L. 115-1232/9/18
    WHIP+2018 & 2019P.L. 116-206/6/19
    ERP2020 & 2021P.L. 117-439/30/21
    ERP2022P.L. 117-32812/29/22
    SDRP2023 & 2024P.L. 118-15812/21/24
    Authorizing Statutes are clickable links.

    SDRP will provide assistance to producers for necessary expenses related to losses of revenue, quality or production of crops (including milk, on-farm stored commodities, crops prevented from planting, and harvested adulterated wine grapes), trees, bushes, and vines, as a consequence of droughts, wildfires, hurricanes, floods, derechos, excessive heat, tornadoes, winter storms, freeze, including a polar vortex, smoke exposure, and excessive moisture occurring in calendar years 2023 and 2024. While the details will be released by USDA once approved by OMB, following are a few key observations:

    • Sign-up Date. USDA has announced a target date of July 7, 2025, for sign-up to begin. While that date may slip a bit as OMB finalizes its review, all indications are that a sign-up announcement is imminent. 
    • Funding. While $20.78 billion was reserved for natural disaster assistance, Congress earmarked $2 billion for livestock (via ELRP), and block grants to states for hurricane relief must also be funded from that total. As a result, the amount available for SDRP will be significantly less than $20.78 billion.  
    • Factoring. When compared against projected losses, there is virtually no question that USDA will have to implement a payment factor.  Recall, the Biden Administration noted that—had they implemented a flat payment factor for ERP 2022—it would have been 27%. Their solution at the time was to implement progressive factoring instead, an approach that U.S. Secretary of Agriculture Brooke Rollins has repeatedly rejected. So, while we know there will not be progressive factoring, we do not know what the flat factor will be. Regardless, we’d argue that you shouldn’t get too hung up on the payment factor. Why? USDA will simply estimate projected payments, compare it to available funding, and set the factor accordingly. In other words, if USDA’s approach with SDRP is generous in calculating payments, then it will require a more significant factor to make sure it doesn’t exceed available funding. The most important part to remember is that USDA will be allocating a historic amount of disaster funding in the months ahead…and any payment factor will be applied uniformly to all program applicants.
    • Sequence.  USDA has noted that SDRP sign-up will focus first on those with indemnified losses. USDA is targeting September 15, 2025, to begin sign-up for those with uncovered losses (i.e., shallow losses) including producers without crop insurance, and quality losses.

    We will provide additional details once SDRP is officially released.

    Fischer, Bart L., and Joe Outlaw. “Sign-up for Natural Disaster Relief Beginning Soon.” Southern Ag Today 5(27.4). July 3, 2025. Permalink

  • Market Impact of the June 30 Acreage and Grain Stocks Reports

    Market Impact of the June 30 Acreage and Grain Stocks Reports

    For its first official production estimates of the new crop year, published in the May World Agricultural Supply and Demand Estimates (WASDE), USDA relies on the planted acreage number from the Prospective Plantingssurvey conducted in late February to mid-March and reported at the end of March. Compared to those March survey numbers, the annual Acreage and quarterly Grain Stocks reports released by USDA at the end of June can change those numbers significantly, thus having the potential to be a major market mover.  

    In the May WASDE (and carried forward unchanged in the June WASDE), USDA estimated 95.3 million acres of corn for 2025 (Table 1) and harvested acres of 87.4 million (91.7% harvest rate).  That compares to 90.6 million acres planted in 2024 and 82.9 million harvested (91.5% harvest rate).  The average guess by traders ahead of the June Acreage report was 95.2 million corn acres planted.  The Acreage report also showed U.S. farmers planted 95.2 million acres of corn for 2025, 100,000 acres below the March survey, but right on the average trade guess. 

    Also revised in the Acreage report was estimated acres harvested for corn.  While acres planted were down only 100,000 from previous estimates, acres harvested were down 600,000. The harvested percentage dropped from 91.7% to 91.1%.  

    Plugging those numbers into the supply and demand balance sheet from the June WASDE, and leaving all other supply and demand factors unchanged, these new acreage numbers lower corn production for 2025 (and ending stocks) by 114 million bushels (Table 2). With use held steady and a reduction in ending stocks, days of use on hand at the end of the marketing year (a representation of the stocks-to-use ratio) decreases from a 41.3-day supply in the June WASDE down to a relatively tight 38.6-day supply.  

    June 1 Grain Stocks were estimated at 4.64 billion bushels of corn, 1.01 billion bushels of soybeans, and 851 million bushels of wheat. Corn stocks are down compared to a year ago while soybeans and wheat stocks are higher. Corn disappearance in the period from December 1 to June 1 was a record 7.432 billion bushels, as depicted in Figure 1 as the difference from the December 1 stock to the June 1 stock. Last year, use in that period was 7.174 billion bushels compared to the five-year average 6.937 billion bushels. 

    Other items in the June USDA reports focused on Soybeans and Wheat.  Soybeans came in at 83.4 million acres planted, 100,000 below the March Prospective Plantings and 200,000 below average trader expectations. Soybean acres harvested were revised from 82.7 million to 82.5 million, a 200,000-acre decrease.  All wheat at 45.5 million acres was up 100,000 compared to Prospective Plantings and trader expectations.  All wheat harvested acres were revised downward by 600,000 acres from 37.2 million to 36.6 million. 

    Given the numbers reported by USDA in the 2025 Acreage report, production estimates for U.S. corn, soybeans, and wheat will likely be revised lower on fewer harvested acres. However, the Grain Stocks report shows a small decrease in corn carryover and increased carryover of soybeans and wheat relative to trade expectations, implying forthcoming changes in old crop use estimates.  Adding old crop ending stock adjustments to new crop production estimates, it looks like the new crop supply numbers got a little tighter for corn and wheat, and a small increase for soybeans.  

    Table 1. Planted Acreage and Grain Stocks from USDA and Industry Reports

    June 30th Acreage and Grain Stocks
    2025 Planted Acres (millions)
     PlantedAverage from ExpertsRange from ExpertsMarch Intentions2024
    Corn95.295.293.8-96.095.390.6
    Soybeans 83.483.683.0-85.083.587.1
    All Wheat 45.545.445.0-46.045.446.1
    Winter Wheat33.333.333.0-33.433.333.4
    Spring Wheat 10.010.19.8-10.210.010.6
    Durum 2.12.02.0-2.12.02.1
    June 1st Grain Stocks (million bushels)
     June 1, 2025Average From ExpertsRange from ExpertsMar 1, 2025Jun 1, 2024
    Corn4,6444,6484,459-4,9558,1514,997
    Soybeans1,008971936-1,0201,910970 
    Wheat851835805-8521,237696
    Source: USDA and DTN

    Table 2. U.S. Corn Supply and Demand Balance Sheet

    U.S. Corn2024/25June WASDE2025/26June Acreage2025/26
    Planted Acreage (Mil. Acs.)90.695.395.2
    Harvested Acreage (Mil. Acs.) 82.987.486.8
    Yield (Bushels)179.3*181.0*181.0*
    Supply                                                     —Million Bushels—
    Beginning Stocks1,7631,3651,365
    Production14,86715,820*15,706*
    Imports252525
    Total Supply16,65517,210*17,096*
    Disappearance    
    Domestic Use12,64012,785*12,785*
    Exports2,6502,6752,675
    Total Use15,290*15,460*15,460*
    Ending Stocks1,3651,7501,636
    Carryover/Use (days on hand) 32.641.338.6
    Average Farm Price ($/Bu.)4.354.204.20
    *Record High
    Source: USDA World Agricultural Supply and demand Estimates and Acreage 2025

    Figure 1. U.S. Corn Stocks, All Positions

    References:

    DTN/Progressive Farmer. “USDA Reports Preview”, June 26, 2025 https://www.dtnpf.com/agriculture/web/ag/news/article/2025/06/26/acreage-stocks-reports-set-tone-us.

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

    USDA, NASS. Grain Stocks, https://usda.library.cornell.edu/concern/publications/xg94hp534.

    USDA, Office of the Chief Economist. World Agricultural Supply and Demand Estimates (WASDE), https://www.usda.gov/about-usda/general-information/staff-offices/office-chief-economist/commodity-markets/wasde-report.