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Preparing for not-so-great corn and soy returns

A farmer’s balance sheet is expected to get tighter heading into 2025 as input prices are on the rise and commodity prices continue to decline. 

Hunter Biram at the University of Arkansas tells Brownfield returns aren’t great for corn and soybeans.

“I’m talking in terms of $4 corn or maybe $4.50 next year and with the state average yields in Arkansas, that’s not going to cut it, not even covering operating expenses,” he says. “Cotton and rice will be right there with them.”

Chad Hart at Iowa State University says it’s a similar situation in the Upper Midwest, but this isn’t a new scenario.

“The key here is to remember what we’ve done in the past. Oftentimes, it holds the recipe for how you get through this.”

Hart says farmers should consider their return on investment for any expense.

“Whether it’s fertilizer or seed, any input costs you’ll need to put pencil to paper and figure out where to squeeze costs.”

Biram says rising interest costs don’t help. 

“The year-over-year interest expense in Arkansas is 48% from 2022 to 2023 and we’re seeing the same environment this year as we did last year.”

But he says USDA’s marketing assistance loans might be an option for farmers get cash up front with a lower interest rate. Dan O’Brien with Kansas State University says he’s waiting until after harvest before getting too pessimistic about what’s ahead.

“It’s hard not to let what you see out your window affect your perspective. In the western Corn Belt there are some pretty dry areas. And I think there are still questions in Iowa, southern Minnesota, Wisconsin and Michigan, the Northern Corn Belt, about late planting and unevenness.”

O’Brien says it doesn’t hurt for farmers to prepare for uncertainty.