U.S. farmers are gearing up to plant more corn and fewer soybeans this spring, aiming to maximize profits and mitigate risks from potential tariffs imposed by President Donald Trump. Analysts and growers are highlighting corn’s relative profitability as a key factor in their planting decisions.
Key Highlights:
Profitability Shift:
According to Frayne Olson, an agricultural economist at North Dakota State University, “When you look at relative profitability, corn is winning the acreage battle.” Some farmers anticipate earning “a nickel or two” per bushel of corn, while soybean prices have fallen below production costs.
Projected Planting Changes:
A Reuters poll estimates that corn plantings will increase to 93.6 million acres, while soybean plantings are expected to decrease to 84.4 million acres. This shift reflects the ongoing struggle for farmers to secure profits amid declining crop revenues.
Market Dynamics:
The U.S. is the world’s largest corn exporter and the second-largest soybean supplier after Brazil. With global corn stockpiles projected to reach a decade low, a robust U.S. crop could help replenish inventories, making more grain available to international buyers.
Tariff Implications:
Corn’s lower export sensitivity to tariffs compared to soybeans makes it a more attractive option for farmers. The U.S. exports about 40% of its soybean crop but only 15% of its corn harvest. This dynamic is critical as trade tensions with China and other countries continue to affect market conditions.
Economic Challenges:
Farmers are facing a third consecutive year of declining crop revenues, complicating planting decisions. The USDA forecasts slight profits in 2025, largely due to government disaster relief, despite falling crop incomes.
Trade Tensions:
Recent tariffs imposed by the Trump administration on Chinese imports have reignited trade tensions, with China being the largest buyer of U.S. soybeans. The USDA estimates that Brazil will supply 58% of world soybean exports this marketing year, compared to the U.S.’s 27%.
Delayed Decisions:
Due to low prices and trade uncertainty, some farmers are postponing final planting decisions until spring. Nancy Johnson, executive director of the North Dakota Soybean Growers Association, noted, “A lot of people won’t make final decisions right now.”
Corn Price Rally:
Corn futures have shown signs of recovery, rising above $5 per bushel after hitting a four-year low below $4 in August. This price rally signals potential profitability for growers and influences their planting strategies.