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(01/14/25) ALEXANDRIA, La. — As farmers begin making plans for the upcoming growing season, many are bracing for the likelihood of another year marked by tight margins.
“Production costs for 2025 are estimated to decrease for the second consecutive year, which is good news,” said LSU AgCenter economist Michael Deliberto. “The bad news is we’re seeing prices for corn, cotton and soybeans remain depressed. And even though producers are seeing a little bit of relief on the input costs — fuel, fertilizer, chemicals, seed — they’re still high by historical standards.”
Deliberto and other experts offered a preview of the 2025 crop year at a Jan. 14 forum near Alexandria.
Farmers have endured a challenging couple of years. Input costs soared to record highs in 2023, cutting into profits despite favorable commodity prices that year. The following year, high input costs began to fall, but so did prices.
“Going into this year, inputs are still high, prices are weak and when you factor in land rent, total cost of production, variable cost of production, you’re right at break even on a lot of crops,” Deliberto said.
He encourages farmers to give careful consideration to risk management decisions this year — like choosing what federal farm programs to participate in, how much crop insurance to buy, what kind of loans to take out and how to market crops — and to take advantage of budgeting tools available on the AgCenter website.
He said farmers also can take some comfort in two recent happenings on Capitol Hill. Congress extended the farm bill for another year, which means the Agriculture Risk Coverage and Price Loss Coverage safety net programs will be in effect for the 2025 crop year. And members of Congress passed a resolution authorizing $10 billion in economic assistance payments to offset losses incurred in 2024.
“Those payments are set to be made between now and March, so that should help producers in their financing options for the upcoming year,” Deliberto said.
Forum attendees also heard from AgCenter economists Kurt Guidry and Jinggang Guo on what 2025 could hold for cattle and timber producers, respectively.
Tom Sell, of Combest, Sell and Associates, discussed the farm bill and federal disaster assistance. Nate Kauffman, of the Kansas City Federal Reserve, spoke on agricultural lending.
The event featured comments from AgCenter administrators as well as video greetings from U.S. Rep. Julia Letlow, of Louisiana, and Sen. John Boozman, of Arkansas, the incoming chairman of the Senate Agriculture, Nutrition and Forestry Committee.
Complete slide presentations from the forum are posted on the AgCenter website. Go to https://tinyurl.com/3ryu6avt.
Details on the outlook for individual commodities are below.
Early indications at the national level suggest that some soybean acres could shift to corn production, Deliberto said.
“The soybean prices right now are concerning for growers,” he said, adding that profit potential is expected to be better for corn.
Prices for both crops, however, are low. That’s because of an increase in supply both in the United States and globally.
The domestic soybean market did receive a bit of good news in the Jan. 10 report from the U.S. Department of Agriculture, he said, as lower production estimates trimmed U.S. ending stocks.
“This was supportive for soybean futures,” he said. “The soybean complex has also received strength from the soybean oil sector. U.S. soybean oil has now become the most competitive vegetable oil in the world as palm oil supplies tighten. This is evident in the strong domestic U.S. crush estimates during the first three months of the year.”
As for corn, demand is expected to increase in 2025.
“Futures prices have responded favorably to that over the past couple of weeks,” Deliberto said.
The January USDA report also cut domestic corn production. This, combined with the demand increase, has been supportive for prices.
Deliberto predicts cotton acres, which have been trending downward for years, will hold at their current levels or decrease slightly. U.S. cotton exports face competition in the international market amid global uncertainty regarding household spending on textiles and apparel and limited buying from cotton importers, he said.
Rice acres are expected to stay about the same in 2025. There’s been a significant increase in long-grain rice production in the Midsouth, Deliberto said, which has resulted in production estimates expanding by nearly 12% year over year. The boost in production along with harvested acres has eased prices for long-grain rice, he said.
“A concerning point for the rice market is the recent sales of rice made by Asian exports to key U.S. markets in Latin American and Mexico,” Deliberto said. “Competition persists from South American exporters as well. Given the increase in long-grain production in the U.S. this year, prices have remained competitive against South American exporters. In the futures market, the downside is limited by acreage concerns in the U.S. for 2025. Ample world supplies and a weak Asian market are also weighing on rough rice futures.”
Sugar acres are projected to continue expanding in Louisiana, with the cane belt growing northward and westward, Deliberto said.
The USDA is forecasting record beet and cane sugar production, which should impact prices.
“Prices for raw sugar are expected to retreat from the near-record highs of last year,” he said. “The tightness that was seen in the domestic raw sugar market last year is expected to ease in the coming year. Prices are still expected to be strong.”
Guidry described the cattle market outlook as “very positive.”
“Reductions in the cow herd over the last three years have left total cattle supplies at extremely tight levels,” he said. “Lower cattle numbers coupled with continued strength in beef demand has shifted much of the market influence from the packer and wholesaler level down to the cattle producer and cattle feeder level.”
A cattle inventory report to be released at the end of January is expected to show another reduction in cow herd size in 2024, he added.
Guidry expects similar supply and demand conditions to continue in 2025, which will help support cattle prices. Current USDA projections show feeder cattle prices increasing by more than 8% in 2025, he said.
“These record prices coupled with lower feed and input costs sets up for strong profitability in the cow-calf sector in 2025,” he said.
Guo is cautiously optimistic about the trajectory of Louisiana’s timber market in 2025 as the sector demonstrates signs of recovery and potential growth.
“Timber prices, which have experienced significant volatility in recent years, are showing early signals of stabilization, particularly for pine sawtimber,” Guo said. “Additionally, the expansion of mill capacity, especially in the lumber sector, reflects increased production capabilities that could help meet rising demand and strengthen the market.”
Emerging markets such as mass timber construction and increasing exports of wood pellets offer promising avenues for long-term demand growth, he said. But the market still faces challenges, including damage caused by pine beetles and regulatory pressures such as the European Union’s Deforestation Regulation, which could constrain supply.
“Despite these hurdles, Louisiana’s timber industry remains resilient, with strong forest growth and effective management practices ensuring a healthy surplus of timber,” Guo said. “Overall, the market is poised for a gradual upward trend in 2025.”
Farmers of row crops such as soybeans are likely to continue to contend with tight profit margins in 2025. LSU AgCenter file photo
Rice acres are expected to stay about the same in 2025. LSU AgCenter file photo
Sugar acres are projected to continue expanding in Louisiana. LSU AgCenter file photo
Experts predict 2025 will be a good year for cattle producers. LSU AgCenter file photo
Timber prices are beginning to show signs of stabilization, and expansion opportunities are emerging in the industry. LSU AgCenter file photo
