Prices for most major row crops are likely to fall again this year, keeping pressure on farmer earnings, even as prices for cattle and poultry continue to rise in 2025 due to constrained supplies, according to USDA.
USDA also projected Thursday that the U.S. agricultural trade deficit for fiscal 2025 would widen to $49 billion. The department raised its estimate for exports by $500 million to $170.5 billion but boosted its forecast for imports by $4 billion to $219.5 billion.
Speaking Thursday at USDA’s annual Agricultural Outlook Forum, Chief Economist Seth Meyer also indicated that pressure on egg prices will continue for some time.
He noted that another 7.4 million birds have been lost to avian flu since the department projected Feb. 11 that wholesale egg prices would hit $4.44 a dozen this year, up from $3.03 in 2024 and $1.92 in 2023.
“Egg markets tend to be very inelastic,” Meyer said. “Consumers, while they may not like the price of eggs, there are not many alternatives to the purchase of eggs.”
The average farm-gate price for this year’s corn crop is expected to slip 15 cents a bushel to $4.20 a bushel. The average price of soybeans is projected down 10 cents to $10 a bushel. Wheat prices are expected to average a nickel less at $5.50 per bushel.
The average price for this year's rice crop is expected to drop 60 cents per hundredweight to $14.80.
Prices for cotton, which have been historically low, are expected to rise only slightly, to an average of 65 cents a pound, up from 63.5 cents on last year’s crop. The average price was 76 cents for the 2024 crop and 85 cents for 2023’s.
“That cotton number, while it's up year over year, it's not a great number, right? It's still a bad number,” Meyer said. “And for other row crops, corn and soybeans, we see falling cash receipts as commodity prices come down.”
USDA is forecasting that farmers will plant more corn and wheat and less soybeans sorghum and cotton.
Farmers are expected to plant 94 million acres of corn this spring, an increase of 3.4 million from 2024 and 84 million acres of soybeans, a decline of 3.1 million acres from 2024. Wheat acreage is projected at 47 million acres, up from 46.1 million last year. Cotton acreage is expected to decline 1.1 million acres to 9.9 million.
Sorghum and rice plantings are both projected down 300,000 acres to 6 million and 2.6 million respectively.
The farm economy will continue to look significantly different this year for livestock and poultry producers.
Because of continued tight cattle production, cattle prices are expected to average $201 per hundredweight this year, up from $187.12 in 2024. Hog prices are expected to average $64 per hundredweight, up from $61.56 last year. Prices for broilers and turkeys also are expected to be somewhat higher in 2025.
But Meyer reiterated that there would likely be no improvement in overall net farm income this except for the $31 billion in disaster aid and commodity market relief Congress authorized in December.
“This is the difference and what will carry those folks to some extent under those very tight margins,” Meyer said.
Despite the continued slump in row crop prices, farmers appear to be in decent shape heading into planting season, said Jeff Schmid, president and CEO of the Federal Reserve Bank of Kansas City. “So far we’re not seeing any major cracks,” he told the forum.
“As the as the ag economy has scaled and shrunk, farm operators have gotten a lot smarter, too … between how they hedge, how they create margin and efficiency, both the banking system and the and the ag industry seems to have gotten through this cycle of much tighter margins.
“And frankly, the inflation experience in ‘22 and ‘23 affected farm operators as much as anybody, but it seems like the team of bankers and producers are working through it based on what we're seeing.”
Meyer said that the strong dollar and the slump in crop prices continues to weigh on the value of U.S. ag exports.
USDA raised its forecast for grain and feed exports by $1.2 billion to $37.7 billion but lowered its forecast for oilseed exports by $1.1 billion to $32.4 billion, “primarily due to lower soybean unit values resulting from strong South American competition.
The higher forecast for ag imports “is largely driven by higher import values of horticultural products as well as sugar and tropical products,” the department said.
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