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  • November 2025 WASDE Report is Relatively Quiet Despite Surprises in Production and Exports

    November 2025 WASDE Report is Relatively Quiet Despite Surprises in Production and Exports

    The November 2025 WASDE report is the first since September to be released due to the government shutdown taking place from October 1, 2025, to November 12, 2025. This month’s report was a relatively quiet one with few significant changes to the balance sheets for southern crops. Season-average farm prices for corn and soybeans were revised upward from the September report, while the prices for rice and cotton were revised downward. Despite the increases in corn and soybeans, futures markets responded with sharp declines in the nearby futures contracts. This was likely driven by production being higher than industry expectations for corn and soybean exports falling short of expectations. We provide a detailed breakdown of the changes to each crop’s respective balance sheet below.

    Long-Grain Rice: 

    This month’s 2025/26 outlook for U.S. long-grain rice includes lower supplies, unchanged domestic use and exports, and decreased ending stocks. Long-grain production was reduced by 1 million hundredweight (cwt.) this month to 152.7 million.  Yields were lowered in all Midsouth states, with Louisiana, Mississippi, and Missouri all seeing average yields reduced by 100 pounds per acre this month.  Arkansas’ average yield was lowered by 50 pounds per acre.  With no adjustments to demand, long-grain ending stocks were lowered by 1.1 million to 36 million cwt., down 3.5 percent from last year. The 2025/26 season-average farm price (SAFP) was lowered by 23 cents per bushel this month to $5.18 per bushel—the lowest since 2018.  This further increases the outlook for sizeable 2025/26 PLC payments, with the current projected payment rate for long-grain at $2.44 per bushel—up 23 cents from September.

    Cotton:

    The November outlook for 2025/26 U.S. cotton supply and demand included higher production, exports, and ending stocks compared to September.  There were no changes to domestic mill use and imports. USDA projected the 2025/26 U.S. crop to reach 14.12 million bales, up roughly 897,000 bales from the September report. The national average yield per acre increased by 58 pounds this month to 919 pounds.  This would be the second-highest yield on record, behind 2022’s 953 pounds.

    U.S. exports were raised 200,000 bales to 12.2 million bales while mill use was unchanged from September at 1.70 million bales. This generates a total 2025/26 offtake of 13.90 million bales. Ending stocks for 2025/26 are projected at 4.30 million bales for an ending stocks-to-use ratio of 30.9%.  This month’s projected average farm price for 2025/26 is 62.00 cents/lb, down 2 cents/lb from September.

    Corn:

    The November report for 2025/26 U.S. corn showed an increase in total supply, exports, and carryover. Production was revised downward 62 million bushels from 16.814 to 16.752 billion bushels based on a reduction of 0.7 bushels per acre in the national yield. On the demand side of the balance sheet, total use is increased 100 million bushels based on an increase in exports of the same amount. Beginning stocks were increased by 207 million bushels from 1.325 to 1.532 billion bushels. Taken together, these changes represent an increase in total supply of 144 million bushels, which is larger than the 44 million bushel increase in total use. Interestingly, this results in a 10-cent increase in the 2025/26 projected season-average price to $4.00/bushel, likely driven by the reduction in national yield and a record large export forecast of 3.075 billion bushels.

    Soybeans:

    The November report for 2025/26 U.S. soybeans showed decreases across the board. Production was revised downward 48 million bushels from 4.301 to 4.253 billion bushels based on a reduction of 0.5 bushels per acre in the national yield. On the demand side of the balance sheet, total use decreased by 51 million bushels based on a decrease in exports of the same amount, driven by lower domestic supplies and increased exports by Brazil and Argentina. While a trade deal between the U.S. and China has been announced, which guarantees soybean purchases through 2028, the announcement also increased the price of U.S. soybeans by 90 cents since October 30th, making the relative price of soybeans lower for Brazil. Beginning stocks decreased by 14 million bushels from 330 to 316 million bushels. Taken together, these changes represent a decrease in total supply of 61 million bushels, which is larger than the 51 million bushel decrease in total use. This 10-million-bushel net reduction in ending stocks results in a 50-cent increase in the 2025/26 projected season-average price to $10.50/bushel.

    Thoughts on USDA’s November Reporting

    Ahead of USDA’s November WASDE and Crop Production reports, concerns arose that NASS might not have sufficient time to conduct an adequate survey of fields and producers, given the recent government shutdown. The November 2025 Crop Production survey had 6,692 participants compared to 5,838 last year. Regarding the field surveys, NASS enumerators visited the fields in October and early November, despite the shutdown. NASS provided the objective corn and soy yield data for November. One might argue there is no reason to believe that the November yield estimates are any less (or more) reliable than in previous years.  

    However, USDA did note “some U.S. data sources that are typically used were not available for the November 2025 WASDE.”  Further noting, USDA mentioned changes to the U.S. balance sheets reflected all U.S. government data available at the time of publication.  Over the past month, information such as the weekly Export Sales and daily export “flash” reporting was unavailable, as well as government reporting on ethanol production and consumption.  

    The next WASDE is scheduled for December 9th.  USDA normally makes no crop production adjustments until the NASS Crop Production Annual Summary is released in January.  In the near term, the major crop markets will be focused on actual Chinese demand for US soybeans and cotton as well as South American weather. These will be primary drivers of price discovery for the balance of 2025.

    Biram, Hunter D., and H. Scott Stiles. “November 2025 WASDE Report is Relatively Quiet Despite Surprises in Production and Exports.” Southern Ag Today 5(47.3). November 19, 2025. Permalink

  • Cull Cows Defy Seasonality

    Cull Cows Defy Seasonality

    All the talk of relaxing tariffs on imported beef, knowing that the majority of our beef imports are lean beef trimmings to go into ground beef competing with cull cow beef, suggested it might be time to take a quick look at the cull cow market.  

    Most will remember that cull cow prices tend to hit their seasonal lows in the Fall.  The most important reason for the price decline is that more cows are culled from the herd in the Fall.  For beef cattle, the largest proportion of cows are culled in the Fall following calf weaning.  On the dairy side, cow culling increases from summertime lows.  The increase in supplies of cows for sale results in lower prices.  Another contributor to lower prices is the end of grilling season, with consumers shifting over to more Fall and Winter consumption patterns.  

    So far this Fall, the cull cow market has defied normal seasonality.  Southern Plains cull cow auction prices hit about $165 per cwt back in June and have remained there since then.  A couple weeks of declines were followed by rebounds back to about $165 per cwt.  National average cutter quality cows have declined recently, slipping about $9 per cwt to $126.

    While the live cow market has not declined much, the same cannot be said for the cow beef market.  The boxed cow beef cutout climbed to $340 per cwt but has declined to $317 over the last two months.  Wholesale 90 percent lean beef has declined from $436 to $404 per cwt over the same period.  Both the boxed beef cutout and wholesale 90 percent lean have followed the normal season pattern, declining into the Fall.  

    We are likely to see some increased culling from the dairy side of the beef industry in the coming months.  USDA’s latest milk production report indicated the nation’s dairy cow herd at 9.85 million head.  That is the largest herd since at least 1993.  Milk production in September was 4 percent larger than the year before.  Milk prices are beginning to decline sharply with increased production.  There is no doubt that the increased returns from using beef bull instead of dairy breed semen to produce cross bred calves is boosting profits and aiding in the dairy herd expansion.  Beef cow culling is likely to remain low due to the historically small cow herd and incentives to expand.  More dairy cow culling and less beef cow culling will continue to leave cull cow prices high.

  • Consider the Risks When Taking a Residual Fertility Deduction

    Consider the Risks When Taking a Residual Fertility Deduction

    Consider the Risks When Taking a Residual Fertility Deduction

    There’s been much recent discussion about a “residual fertility” deduction for farm and ranchland. It’s been common practice among farmers for many years to take a tax deduction for the value of unexhausted fertilizer remaining in soil purchased with land. In recent years, however, this practice has expanded to include large deductions for the value of all soil nutrients, not necessarily those linked to prior fertilization. Questions about the legal basis for these deductions have increased as the value of these deductions have risen. 

    Fertilizer Expenditures and Section 180

    To understand this issue, it is important to understand the basis for deducting fertilizer in the first place. Years ago, the IRS required farmers to capitalize and deduct fertilizer costs over the useful life of the fertilizer. Because the fertilizer would not be used up in one year, the deductions had to be spread out. In 1960, Congress changed course, recognizing that farmers would benefit from deducting fertilizer expenses in the year paid. Section 180 thus allows farmers to elect to deduct in the year of application the cost of fertilizer, lime, and similar materials applied to land used in farming. 

    Residual Fertilizer Supply

    When farmland is purchased, a buyer may allocate part of the price to depreciable assets such as fencing or tile. Many farmers have also assigned a portion of the purchase price to the value of unexhausted fertilizer and deducted that expense accordingly. Although there is no statute, court case, or regulation specifically endorsing this practice, a 1991 IRS memorandum suggests this deduction is appropriate if properly proved. 

    In TAM 9211067, the IRS denied a claimed deduction for unexhausted fertilizer purchased with the land, but outlined requirements to support a possible deduction. The taxpayer must: (1) prove the presence and extent of fertilizer attributable to the prior owner, (2) show that the fertilizer is being exhausted, and (3) be the beneficial owner of the fertilizer, meaning it is inseparable from land the taxpayer owns. 

    If a farmer who purchases land can meet these three conditions, it appears they can elect under §180 to expense the value of the unexhausted fertilizer in the year of purchase, much like other purchased fertilizer, provided the land is used in farming and the taxpayer is engaged in the business of farming.

    A Caution

    In recent years, land purchasers have ventured beyond these parameters to take very large deductions based on the total nutrient content of the soil, not based upon the value of unexhausted fertilizer. These deductions are risky. Courts have stated that land alone, including the nutrients that comprise that soil, are not depreciable. Likewise, courts have not allowed depletion deductions for the decline of soil nutrients. Section 180 applies only to fertilizer applied to enrich the soil, and by extension, to unexhausted fertilizer in the soil. 

    Expansive claims based on general soil nutrients or inflated valuations may invite IRS scrutiny and penalties. Taxpayers bear the burden of proving they are entitled to any deductions they take. Deductions tied to land purchased many years ago or to unfertilized pastureland are especially vulnerable. Until Congress, the courts, or the IRS provide clear guidance, farmers and land purchasers should seek trusted counsel and weigh the risks of asserting a deduction for residual fertility.

    Additional Resources

    There are a number of additional resources related to the Section 180 tax deduction.

    Many of your local Land Grant institutions offer annual tax workshops for tax professionals.  For locations around the country:  Land Grant Tax Workshops

    And specifically for workshops in our two states: Texas and Iowa

    Tidgren, Kristine, and Tiffany Lashmet. “Consider the Risks When Taking a Residual Fertility Deduction.” Southern Ag Today 5(47.1). November 17, 2025. Permalink

  • Christmas Trees: A Festive Specialty Crop in the Southeast

    Christmas Trees: A Festive Specialty Crop in the Southeast

    Commercial Christmas tree production is often associated with colder climates and northern regions. Yet, Christmas trees are grown in all 50 states – including the South – with North Carolina, Georgia, and Texas among the leading producers, based on 2022 USDA Census of Agriculture data (Figure 1 and Table 1). Based on 2022 USDA Census of Agriculture data, the value of sales from cultivated trees in the South exceeded $160 million. 

    Table 1. Christmas Tree Production by Southeastern State, Ranked

    StateNumber of Trees Cut 
    North Carolina3,208,419
    Virginia578,777
    Georgia63,915
    Texas43,668
    Alabama24,586
    South Carolina23,317
    Oklahoma21,352
    Tennessee12,129
    Mississippi11,175
    Louisiana10,825
    Arkansas8,410
    Florida8,353
    Kentucky4,748
    Note: Data collected from the USDA Census of Agriculture, 2022.

    Virginia Pine, Afghan Pine, Leyland Cypress, Eastern Red Cedar, Fraser Fir, and Carolina Sapphire are some of the tree varieties you will find growing in the South. Families relate buying a real Christmas tree to making memories or to family traditions. For some, it is the scent of the tree, the process of picking a tree, and bringing it home. For others, it is an environmentally conscious choice as these trees, when sustainably produced and managed, can have beneficial impacts on soil and wildlife. 

    Christmas trees are primarily sold in local retail stores and on Christmas tree farms, boosting local economies. Prices vary by height, variety, and whether you buy at a local nursery, a retailer, or at a Christmas farm. Expect prices to be close to $80 as the starting price for a 5-6 ft tree, up to $400 for a 12-13 ft tree at a farm. You can also buy wreaths, garlands, and participate in festive activities at the venues throughout November and December. Yet, the industry is challenged with the American Christmas Tree Association (ACTA) reporting that U.S. households prefer an artificial tree; 83% of households surveyed in the period Oct. 3-5, 2025, representing 1,033 adults of 18 years of age or older in the US. Prices for artificial trees range from $50 for a 6ft tree all the way up to $2,500 for a 12ft high-end variety.

    However, there is something ‘special’ about picking out a tree, like you carry back home a piece of community. So, if you want to find where to pick your next tree, organize a family trip, or simply learn more about tree production, visit a Christmas Tree farm near you—some are counting down the days to open to the public. More information can be found at your state’s Christmas Tree Association, providing you with a list of member farms, e.g., the Texas Christmas Tree Growers’ Association, the Virginia Christmas Tree Growers’ Association, and the North Carolina Christmas Tree Association. Other sources are the Southern Christmas Trees Association and the National Christmas Tree Association. And once the season is over, you can always check if there is a Christmas tree recycling program in your area. The National Christmas Tree Association offers a recycling guide.

    Links:

    ACTA: Survey Finds Artificial Christmas Trees Continue to Dominate U.S. Holiday Décor — The American Christmas Tree Association

    Bampasidou, Maria. “Christmas Trees: A Festive Specialty Crop in the Southeast.” Southern Ag Today 5(46.5). November 14, 2025. Permalink

  • Grain Sorghum Exports to China at Their Lowest in Over a Decade

    Grain Sorghum Exports to China at Their Lowest in Over a Decade

    In 2025, grain sorghum production for the United States totaled 10.2 million metric tons (MMT). This was led by Kansas, totaling 5.8 MMT, and Texas, 2.64 MMT. Colorado (497 thousand metric tons), Nebraska (494 TMT), and Oklahoma (479 TMT). Aside from a poor production year in 2022, the United States has averaged 9.35 MMT annually.

    The U.S. is by far the largest sorghum exporter, followed by Australia and Argentina. In 2024, the United States exported 5.24 MMT of sorghum worth $1.38 billion, with China being the leading importer. From 2020-2024, China imported more than 83 percent of U.S. exported sorghum with an FOB value ranging from $1.32-2.14 billion each year. In 2024, sorghum exports to China from the United States totaled 4.63 MMT and $1.23 billion. Annually since 2020, less than 16.4 percent of U.S. sorghum exports have gone to the rest of the world. In recent years, Ethiopia, Eritrea, Sudan, and Djibouti follow China in terms of volume imported, but none have imported more than 20 TMT since 2020.

    The ongoing tariff war has caused a decrease in Chinese imports of many U.S. products, including sorghum. In the partial year through July, only 82 TMT of sorghum have been exported; in the same time period in 2024, more than 3.24 MMT of sorghum were exported. As of July 2025, exports were down 80% when compared to the previous year, with sales to China down 97%. Some of these imports are primarily being substituted by Australia and Argentina. Similarly, in 2018 and 2019, sorghum trade between China and the United States fell but rebounded with the U.S.-China “Phase One” Deal that occurred in 2020. The recent agreement between the U.S. and China could reopen the Chinese market for U.S. sorghum.

    World Sorghum Exports, 2013-2024

    World Sorghum Imports, 2013-2024

    U.S. Sorghum Exports, 2016- July 2025

    Sources

    Foreign Agricultural Service (FAS). Global Agricultural Trade System (GATS). Online database. Online public database accessed November 2025.

    Nguema, Abigail. “Grain and Feed Update.” Foreign Agricultural Services. September 30, 2025.

    United Nations Department of Economic and Social Affairs. Comtrade. Online public database accessed November 2025.

    USDA Foreign Agricultural Service (FAS). Production, Supply and Distribution Online (PS&DView). Online public database accessed November 2025.