Tariff escalation remains a major source of uncertainty that could substantially move corn futures markets in the coming weeks/months. Managing some futures price risk based on the current rally is worth considering given the uncertainty in corn markets. On Friday April 11, December corn futures broke through a key resistance point at $4.60/bu. For those farmers that have not started pricing the 2025 crop, December corn futures above $4.50/bu represent a good starting point to remove some futures price risk (basis could be secured now or left to be fixed at an alternative date depending on local basis offerings). Pricing into a futures market rally, through incremental sales, is a strategy worth considering, and one that will take some of the emotion out of marketing decisions. For example, starting at a December futures price of $4.50/bu, consider pricing 5% of projected 2025 production. For each additional 10-cent increase in futures price, consider establishing a futures price on an additional 5% of estimated production up to a maximum of 35% of projected 2025 production. Pricing more than 35% of the crop before June can be risky and can result in exchanging price risk for production risk or having limited production to price should a bullish weather market occur in June/July/August. The maximum amount to be priced before June can be a personal preference based on the farmers’ risk tolerance, variability in yield for the farm, and access to storage. This incremental pricing strategy would establish an average futures price of $4.80/bu on 35% of projected production if the December corn futures price rallied to $5.10/bu (Figure 1). However, it would also put some sales (10% of estimated production at an average price of $4.55/bu as of April 22) on the books if the current rally stalled or reversed. Futures prices above $4.50 plus a positive basis, which occurs in most Southern states, will result in cash prices of nearly $5.00.
Table 1. December Corn Futures Price and Sales into a Hypothetical Rising or Falling Market
The headline numbers of feedlot marketings, placements, and total cattle on feed were not a lot different from expectations. Feedlot marketings in March were just over 1 percent larger than the previous March. With the same number of working days in the month as last year, daily average marketings slightly outpaced a year ago. Placements were 5.1 percent larger than last year. Larger placements were not a surprise due to an expectation that placements were delayed a bit from February and, normal, seasonally larger March placements from wheat and other small grain pastures. Larger placements and marketings left the total number of cattle on feed 1.6 percent fewer than last year.
Placements for the year are worth another look. For the first 3 months of the year, placements are 4 percent, or 216,000 head, fewer than last year. But, feeder cattle imports from Mexico through March are down 227,000 head compared to a year ago. Remember that there were no imports through January and much slower imports in February due to screwworm regulations. Taken together, the decline in imports from Mexico is larger than the total decline in placements so far this year. The impact of fewer feeders from Mexico likely shows up in Texas’ placements, which are down 13.1 percent for the year.
To save the best for last, the most interesting part of this report was the quarterly estimate of the number of heifers in feedlots on April 1. Heifers on feed were down 4 percent, or 180,000 head, compared to April 2024. The 4.38 million heifers on feed were the fewest since April 2020 and before that, April 2018. Since the first of the year, 77,000 fewer spayed heifers were imported from Mexico, so they make up a portion of that decline. While the headline of fewer heifers on feed may raise eyebrows, the number remains large. There have been more than 4 million heifers on feed for 30 consecutive quarters, and they make up 37.6 percent of the cattle on feed. We’ll have to wait for larger and consecutive declines in heifers on feed as evidence of any heifer retention for herd rebuilding.
Anderson, David, and Josh Maples. “Fewer Heifers in Feedlots.” Southern Ag Today 5(17.2). April 22, 2025. Permalink
Farmers in the Midsouth region are faced with several choices when planting and marketing their crops. The type of rental agreement can have a variety of impacts on a Midsouth farmer, particularly in terms of returns to cash operating expenses (or variable costs). For example, a farmer operating under a crop share agreement may require higher yields to cover variable costs than one operating under a cash rent agreement. This article highlights the breakeven potential for rice, corn, and soybeans under three land ownership scenarios: cash rent, 75-25 crop share agreement, and fully owned land. Understanding breakeven curves allows farmers to evaluate the minimum yield (or price) needed to cover costs under each agreement, an essential step in managing economic risk and optimal crop choice. The analysis aims to help Midsouth farmers understand their cost structure and to support more informed marketing decisions within the context of alternative rental agreements.
The assumptions used to calculate breakeven values are given in Table 1 below. The listed Midsouth expenses represent estimated production expenses per acre for each crop; operating expenses do not include fixed overhead and other non-cash expenses such as depreciation. Breakeven combinations that exceed operating expenses do not include non-cash costs such as depreciation. Crop share agreements are assumed to follow a 75-25 split, with the landowner receiving 25% of the revenue and not contributing to production expenses. The cash rent value is an average derived from county-level estimates for irrigated farmland across the Midsouth region. We assume no associated land costs for the owned land scenario.
Table 1. Breakeven Curve Assumptions
Crop
Estimated Cash Operating Expenses
Crop Share
Cash Rent
2025 USDA-RMA Harvest Price
Corn
$806
75-25
$152
$4.65
Soybean
$510
75-25
$152
$10.51
Rice
$993
75-25
$152
$6.35
Figures 1 – 3 show the breakeven curves for Midsouth corn, soybean, and rice production. These curves plot the price and yield combinations necessary to cover total cash operating expenses, as defined in Table 1. Any price and yield point below the curve indicates a crop revenue that does not cover cash operating expenses, while points above the curve indicate positive returns above cash operating expenses. To provide context for current market expectations, the 2025 USDA-RMA expected harvest price for Arkansas is plotted on each graph. Across all three crops, the owned land scenario consistently requires the lowest price/yield combination to break even, while crop share requires the highest combination. For instance, Figure 1 shows the breakeven curves for Midsouth corn production. At the expected harvest price of $4.65, the target breakeven yield under full ownership, cash rent, and crop share is 173 bu/acre, 206 bu/acre, and 231 bu/acre, respectively. In simple terms, land tenure arrangements with higher expense obligations require either higher yields, higher market prices, or a combination of both to cover variable costs (Mills, 2023). The implication is that cash rent and land ownership are progressively more profitable than crop share. However, it is important to remember that there are things to consider beyond cash operating expenses. Specifically, both cash rent and owned land require the producer to bear a higher level of production risk, and land ownership requires the cost of capital investment.
Figure 1. Midsouth Corn Breakeven Curves at an estimated $806/acre cash operating expense.
Figure 2. Midsouth Soybean Breakeven Curves at an estimated $510/acre cash operating expense.
Figure 3. Midsouth Rice Breakeven Curves at an estimated $993/acre cash operating expense.
Raising state minimum wage rates to more than twice the federal minimum wage rates is expected now or in the near future in many specialty crop-producing states, posing significant financial challenges to U.S. fresh produce growers. With Florida’s basic minimum state wage rates set to reach $15 per hour by September 2026 and California already at $16.50 per hour (United States Department of Labor, 2022)—and farm wages potentially climbing to $19 per hour— labor costs, already a substantial portion of production expenses, are expected to increase considerably. This exacerbates competition with Mexican growers, who benefit from significantly lower wages—roughly one-tenth of U.S. rates—enabling them to price strawberries more competitively, particularly during the U.S. winter season.
As of 2020, Florida’s minimum wage was $8.56 per hour and is expected to reach $15 per hour by 2026 (United States Department of Labor, 2022). In contrast, the increasing wage disparity between the U.S. and Mexico provides Mexican producers a consistent competitive edge, evident by Mexico’s substantial market share—approximately 60% of all U.S. fresh produce imports and 98% of strawberry imports. Higher U.S. labor costs are projected to reduce domestic strawberry supplies by as much as 37%, causing domestic prices to rise by 14% to 30%. Consequently, Mexican strawberry exports to the U.S. are expected to increase significantly, further intensifying competition.
Recent research highlights the financial implications: if the minimum wage increases to $15 per hour, the U.S. strawberry industry could lose $93 million (-5.5%) in revenue (Table 1). Should wages climb to $19 per hour, losses may escalate to $304 million (-17.9%) (Table 2).
To address these challenges, Southeastern U.S. growers are encouraged to proactively adopt strategies to remain competitive. Short-term measures may include advocating for equitable trade policies addressing wage disparities. Long-term solutions require investments in automation, mechanization, and artificial intelligence to reduce labor dependency. Embracing technological innovations, reassessing pricing strategies, diversifying into niche markets, and seeking governmental support or favorable trade policies will be critical to ensuring the long-term sustainability and profitability of Southeastern U.S. strawberry producers in an increasingly competitive global market.
Notes: RUSP: Real U.S. price for strawberry in $/lb.; RMXP: Real Mexican import value of strawberry in $/lb.; USQ: U.S. strawberry (non-organic) shipments in Million lbs.; MXQ: Mexican strawberry shipments in Million lbs. Pre-policy values are calibrated by averaging pre-policy data (2017-2019). In this scenario, farmers would pay their crews at the lower bound set by state law—a minimum of $15/hour.
Table 2. Pre- and Post-Policy Minimum Wage Increase: $19/Hour Wage Scenario (Maintaining the Same Margin)
Pre-Policy values
Post-Policy values
Difference
%Change
RUSP ($/lb.)
0.97
1.26
0.29
30.5%
RMXP ($/lb.)
1.41
1.74
0.32
23.0%
MXQ (M. lbs.)
374.89
546.30
171.40
45.7%
USQ (M. lbs.)
1,765.60
1,108.48
-657.12
-37.2%
U.S. Revenue (M.$)
1,699.39
1,395.08
-304.31
-17.9%
MX revenue (M.$)
532.02
952.59
420.56
79.0%
Notes: RUSP: Real U.S. price for strawberry in $/lb.; RMXP: Real Mexican import value of strawberry in $/lb.; USQ: U.S. strawberry (non-organic) shipments in Million lbs.; MXQ: Mexican strawberry shipments in Million lbs. Pre-policy values are calibrated by averaging pre-policy data (2017-2019). Retrieved from USDA-AMS (2021) and USD-FAS (2021) In this scenario, farmers would maintain the same margin difference relative to the increasing minimum wage, resulting in a wage of $19/hour when the minimum wage rises to $15/hour.
After numerous rounds of reciprocal tariff hikes, the tariffs between the U.S. and China have escalated to 145% and 125%, respectively. This raises a critical question: Can U.S. agricultural exports to China withstand such steep retaliatory tariffs? To delve deeper into this issue, let’s examine the impact of prohibitively high tariffs on U.S. beef exports, a significant component of U.S. agricultural trade with China.
As noted in a previous article, China has emerged as a major player in global beef trade. Although once a minor importer, China is now the largest beef importing country in the world. In 2010, Chinese beef imports were only $84 million, but by 2022, they increased by 21,000% to nearly $18 billion (See SAT: https://southernagtoday.org/2022/12/01/china-emerges-as-a-leading-destination-for-u-s-beef-exports/). This remarkable rise can be attributed to several factors, including economic growth, urbanization, and changing preferences for quality protein sources. The increase in imports was further accelerated by the outbreak of African Swine Fever in 2018, which decimated pork supplies and led to a significant shift towards beef. Due to rising demand and imports, coupled with lifting the import restriction on U.S. beef in 2017, China is now the third largest foreign market for U.S. beef behind South Korea and Japan (USDA, 2025).
Since 2017, the U.S. has significantly increased its beef exports to China. In 2018, U.S. beef exports were valued at around $64 million, but by 2024, increased to approximately $1.5 billion (See Figure 1). As the figure shows, Brazil is the leading exporter of beef to China, reaching approximately $6.2 billion in 2024 (45% of total Chinese imports). Other noted suppliers include
Argentina, Australia, New Zealand, and Uruguay.
The figure underscores the competitive landscape of imported beef in China, with the U.S. emerging as a key player alongside Argentina, Australia, Brazil, New Zealand, and Uruguay. We can assess the impact of tariffs on these countries using price elasticity estimates from previous research (Hossen and Muhammad, 2025). The price elasticity refers to how the quantity imported responds to changes in import prices (own or competitor’s). Based on estimates from previous research, U.S. beef exports to China could decline by more than 77% in the short run, amounting to more than $1.0 billion in lost export sales. In the long run, U.S. beef exports to China will likely fall to zero if the high tariff persists. Interestingly, competing beef exports from Brazil and other countries could also decline (although by much smaller values) due to complementarities in importing. However, our estimates suggest that Uruguay could possibly benefit, but the benefit would be a fraction of U.S. losses. The U.S. has managed to capture a substantial share of the Chinese beef market (11% in 2024). Challenges posed by recent tariffs and trade barriers could cause the U.S. to lose it all.
Figure 1. Chinese Beef Imports: 2010 – 2024
Source: Trade Data Monitor® (2025)
For more information:
Hossen, M.D. and Muhammad, A. (2025). “Assessing the Impacts of Maritime Freight Rates on Global Beef Trade” Agribusiness. https://doi.org/10.1002/agr.22030
