If you have been following the national agricultural news lately, beyond discussions on policy, there has been a focus on states’ legislatures considering “Crop Protection” legislation. This liability protection would extend to companies producing federally approved pesticides.
We have all seen the news of large settlements from users of federally approved pesticides claiming linkages between their use and cancer. The biggest of these lawsuits is the Roundup litigation. To date, Bayer has paid roughly $10 billion to settle claims that Roundup has caused cancer. At the same time, class actions have been filed against Syngenta, the manufacturer of Paraquat, for claims that the product causes Parkinson’s Disease. Finally, AMVAC Chemical Corporation has been sued due to claims that Dacthal (DCPA) has caused birth defects.
The debate on Crop Protection legislation concerns this type of litigation. Under the legislation being proposed in several states, as long as the federally approved pesticide includes a label with the most recent human health assessment required under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) or a label containing consistent with the Environmental Protection Agency’s (EPA) carcinogenicity classification for the pesticide required under FIFRA this would be a sufficient warning label. Under the legislation, this label would be enough to meet the duty to warn under state law. This would severely limit the ability for users to sue later for alleged health issues (such as cancer or Parkinson’s Disease).
This legislation has been signed into law in North Dakota, and as of the writing of this article, it has passed the Georgia legislature and has not been signed by the Governor. Similar legislation is currently before the legislatures in Florida, Iowa, Missouri, Oklahoma, and Tennessee.
The global rice market in the last two years has been a rollercoaster driven mostly by India’s export restrictions and, since October of last year, by its massive rice crop. India’s production performance has been remarkable, breaking a new production record every year for the last ten years. USDA (2025a) estimates that production in marketing year 2024 (still in progress in India with the smaller rabi crop) will reach 147 million metric tons (MMT), milled basis, and exports could go as high as 24.5 MMT, significantly above the record 22 MMT exported in 2021.
Indonesia is also contributing to the bearish tone of the global rice market. While total rice consumption and production have followed a downward trend in the last decade, consumption rebounded in 2023 and 2024 while production kept falling, which created a surge in imports. Indonesia was the second-largest rice importer in 2023 and the largest in 2024, when imports reached 4.7 MMT. Weather is supporting the growth of production in 2025, which, together with ample stocks bought at competitive prices, suggests that Indonesia will need less than 1 MMT of imports this year (USDA, 2025a).
From the above, we can infer why long-grain rice prices have been under pressure since last October (Figure 1). Export prices out of Thailand and Vietnam have decreased by over $160/MT or 29% in the last six months, although they seem to have found a floor at around $400/MT in the last few weeks. Export prices out of Mercosur (Argentina, Brazil, Paraguay, and Uruguay) have also decreased sharply; for example, the export price of Uruguayan 5% long-grain rice averaged $582/MT in March relative to $800/MT in October, according to FAO (2025). The export price of U.S. long-grain #2/4% decreased but to a smaller extent (12%) over the last six months and seems to have found a floor at around $650/MT. Interestingly, amid decreasing long-grain prices across the board, U.S. export prices remain more resilient, even when the low milling quality of the U.S. crop has been a significant concern. Of particular concern for the milling industry is the fact that U.S farm prices have remained mostly unchanged: USDA average farm price decreased only 3% from $14.5/cwt in August to $4.2/cwt in April (USDA, 2025b). Lower export prices and steady domestic paddy prices put the squeeze on milling margins.
Nine months into the 2024/25 marketing year, the U.S. has exported 2.29 MMT (paddy basis) of long-grain rice, a 21% smaller amount relative to last year, driven by a decrease in paddy exports to all major markets (Mexico, Central America, and Colombia). Paddy rice from Mercosur continues to gain market share in core U.S. paddy markets. Exports of long-grain milled rice are at par with the previous year’s performance, thanks to the growth of exports to Iraq, which helps offset a sizable market loss in Haiti. U.S. exports will face higher competition from Mercosur in 2025, driven by a significant increase in production in Brazil and, to a lesser extent, Argentina, Paraguay, and Uruguay, which will result in more rice available for export.
Given the global and regional situation described above, what can we expect for the upcoming marketing year? USDA’s March 2025 prospective plantings (USDA, 2025c) suggest a similar crop than last year (2.24 million acres in 2025 relative to 2.28 million in 2024). Excessive rains in Arkansas early April have complicated crop establishment and caused significant infrastructure damage. Despite that, as of May 4th planting progress was almost 80%, but with a mix of situations depending on location (UADA, 2025a). The USDA projects the 2025 long-grain rice production at 167.2 million cwt, around 3% below the 2024 crop, and exports at 68 million cwt, slightly higher than in 2024. As discussed earlier, lower export prices have not caught up with farm prices so far, but a bearish global market will indicate that farm prices will adjust downward. For example, FAPRI (2025) projects that long-grain farm prices will drop below the reference price in 2025/26 to $13.28/cwt, while USDA’s WASDE report (USDA, 2025b) estimates an average farm price of $12/cwt for long grain rice. Looking at the University of Arkansas Rice Enterprise Budgets (UADA, 2025b) with those farm prices, the picture that emerges is worrisome, as all budgets yield negative returns above operating costs.
Figure 1. Monthly average export price of long-grain rice from selected exporters.
The May 2025 World Agricultural Supply and Demand Estimates (WASDE) is a highly anticipated report as it offers the first official USDA estimates of the new crop marketing year (USDA, 2025). For 2025/2026, the estimates show a divergence of fundamental factors in the U.S. grain markets. Estimated days of use on hand at the end of the marketing year (a stocks-to-use ratio calculated by dividing ending stocks by average daily use) are projected to increase in 2025/2026 compared to 2024/2025 for corn, wheat, and rice. Conjointly, the season average farm price is projected lower for these three grains. For soybeans, days of use on hand are forecast to decrease and the farm price is forecast to increase compared to last year.
Based on the Prospective Plantings report back in March, corn acres for 2025 are projected at 95.3 million, up from 90.6 million in 2024. USDA’s yield estimate for 2025 is a record high 181.0 bushels per acre. This combines for a record corn crop of 15.820 billion bushels. Add in 1.415 billion bushels of beginning stocks and the corn supply in the 2025/2026 marketing year is a record 17.206 billion bushels, up 3.6% from last year.
U.S. corn use is projected at record levels as well with increases in feed and exports. However, the increase in corn supply exceeds the increase in use, resulting in an increase in ending stocks. Days on hand increased by an 8.6-day supply, and the season average farm price is down from $4.35/bu last year to $4.20/bu. With a PLC reference price in 2025 of $4.26/bu, that would earn a 6-cent-per-bushel payment.
Soybean acres for 2025 are estimated at 83.5 million, down from 87.1 million in 2024. But with a record forecast yield of 52.5 bushels per acre, production in 2025 is down only 26 million bushels from 2024. Soybean use is forecast to increase by 31 million bushels on increased domestic crushings. Ending stocks are expected to decrease by 55 million bushels, and days of use on hand are expected to decline by 4.8 days. The season average farm price is projected to increase by 30 cents per bushel to $10.25.
U.S. wheat production is estimated to be little changed from the 2024 crop with the decrease in acres mostly offset by a higher yield estimate. Impacting the wheat supply for 2025/2026 is an increase in beginning stocks and a decrease in projected imports (-30 million bushels). Wheat use is projected lower on a decrease in exports of 20 million bushels. This raises the wheat ending stock estimate by 82 million bushels, increases carryover to a 172-day supply, and lowers the season average farm price from $5.50/bu last year to $5.30/bu. With a $5.56/bu reference price, this would generate a PLC payment of 26 cents per bushel.
The U.S. rice supply in 2025/2026 is projected higher, as an increase in beginning stocks offsets a small decline in production. Use is up 1 million hundredweight with an increase in domestic use and a decrease in exports. This leaves ending stocks up 3.5 million hundredweight and days on hand higher by 3.2. The farm price is down $2 per hundredweight to $13.20, below the PLC reference price of $14.00.
Of course, much can change between these early season estimates and final crop production and use numbers. Weather, trade policies, the economy, global grain fundamentals, and other factors foreseen and unforeseen, will evolve and emerge to shape grain prices. The May WASDE is an important benchmark to assess and estimate the impact of these changes and forces as the season unfolds.
Table 1. May 2025 WASDE Numbers for U.S. Grains (corn, soybeans, and wheat in millions of bushels; rice million hundredweight) and 2025 PLC Reference Prices and Estimated Payment Rate.
Crop
Corn
Soybeans
Wheat
Rice
mil bu
change*
mil bu
change*
mil bu
change*
mil cwt
change*
Beginning Stocks
1,415
-348
350
+8
841
+145
45.0
+5.2
Production
15,820**
+953
4,340
-26
1,921
-50
219.3
-2.8
Total Supply
17,260**
+605
4,710
-24
2,882
+64
313.5**
+3.5
Total Use
15,460**
+220
4,415
+31
1,959
-18
266.0**
+1.0
Ending Stocks
1,800
+385
295
-55
923
+82
47.5
+2.5
Days on Hand
42.5
+8.6
24.4
-4.8
172.0
+16.7
65.2
+3.2
Price $/bu or $/cwt
Farm Price
$4.20
-$0.15
$10.25
$0.30
$5.30
-$0.20
$13.20
-$2.00
PLC Reference Price
$4.26
$9.26
$5.56
$14.00
PLC payment rate
$0.06
$0.00
$0.26
$0.80
*change 2025/26 marketing year compared 2024/25 marketing year.
The U.S. closed the border to Mexican cattle again on May 11, 2025. This closure is the next round following the closure in late November 2024 and reopening in February 2025. The closure was prompted by continued expansion in screwworm cases in Southern Mexico. Additionally, new cases were reported as far North (or West as you read the map) as the states of Veracruz, Oaxaca, and Tabasco. The narrowest part of Mexico, geographically the Isthmus of Tehuantepec, has been considered an important line of defense because this is where the country begins to widen. The widening area leads to more land area to treat, making effective control that much more difficult.
Since the border was reopened to cattle in February, feeder cattle imports rebounded to about 20,000 head per week. Imports have remained below 2024 and the previous five-year average. Additional inspection and quarantine regulations likely slowed the pace of imports, as well as not all ports of entry operating for cattle. Only 4 of the 11 ports of entry for cattle have been operating. For example, of the six Texas ports of entry, only Presidio had cattle crossing since the border was reopened. Santa Teresa, New Mexico is the largest cattle port of entry, and it had been operating since the week of February 8, 2025.
Feeder cattle imports from Mexico peak seasonally in the Spring and Fall. Over the 10 years from 2015-2024, feeder cattle imports from Mexico averaged 5.2 percent of feedlot placements into feedlots with over 1,000 head capacity. Presumably, most of those cattle are placed into feedlots in Texas and the Southwest. Annual feeder cattle from Mexico was the equivalent of 18.0 percent of annual feedlot placements in Texas, Oklahoma, Arizona, and California over the 2015-2024 period.
The loss of feeder cattle imports will further tighten feeder cattle supplies. Already record high calf prices will likely see some more upward pressure. The loss of these cattle will further pressure feedlots in the Southwest as well.
As mentioned in previous Southern Ag Today (SAT) articles (Martinez and Ferguson 2022, Martienz 2023), monitoring Non-Real Estate Farm Debt provides insight into debt health. Last year, there were periods of drought and increased input prices for producers. At the time of this article, planting is on everyone’s mind (completed or about to start), producers are bailing hay, and all prices in every supply chain are working their way through tariffs. The most recent reports offer insights through the end of 2024. As a refresher, every commercial bank in the U.S. submits their quarterly Reports of Condition and Income, which are known as call reports. Within these call reports are totals of agricultural loans and the status (on time or late) of the loans. Figure 1 displays the total loan volume (yellow line) and loan volume for three late categories (30-89 days late, 90+ days late, non-accrual) for the last 16 quarters (4 years). The totals are for all the Southern Ag Today States.
Through the end of 2024, non-accrual (blue line) loans continued to decrease, which is positive, and loans that are 90+ days late (grey line) remained relatively the same. Total loans (yellow line) are down from the previous quarter, which is expected due to seasonal trends. But, total loan debt is up 4.8% compared to 2023. The most concerning statistic is the loans that are 30-89 days late (orange line). At the end of 2024, debt that was 30-89 days late, was up 5.2% compared to the end of 2023 and the highest since Q1 of 2021. Q1 is seasonally the highest quarter for 30-89 days late loans, but given that it’s up from a year ago, the Q1 2025 reports will provide an indication of debt health in 2025 and moving forward.
From a sky high view, the call reports indicate that there are some possible caution signals for debt in the SAT states. Total non-current debt is approximately 1%, which is still relatively low. The next two quarters will provide answers if the signals are false alarms or true signals of concern. In the coming months, it is crucial that producers are mindful of their working capital and continue the positive production and risk management strategies they have implemented thus far.
