The grain sector has experienced market price contraction as supplies remain strong due to high-planted acres and solid national yields. At the same time, stubbornly high production costs have continued to pressure profitability.

Corn demand has been stronger than expected, driven by increased ethanol usage and livestock demand. Feed usage is expected to climb despite minimal growth in overall animal units. The USDA is forecasting record levels of corn exports, which would be supportive given elevated supply levels.

Soybean demand will depend largely on clarity and legislation surrounding the biofuel sector, along with China’s follow-through on commitments to purchase U.S. soybeans. Domestically, crushing capacity continues to expand at record levels. Soymeal dominates crushed demand, and increased capacity could enhance its global competitiveness.

Farmer Bridge Assistance (FBA) Program

The Farmer Bridge Assistance program will be paid on 2025-planted acres at the following rates. We encourage you to communicate with your local Farm Service Agency office for additional details.

• Corn: $44.36 per acre
• Soybeans: $30.88 per acre
• Wheat: $39.35 per acre
• Oats: $81.75 per acre
   

The beef sector has been a bright spot for diversified operations. Volatility may arise from factors such as concerns surrounding New World screwworm, border policy changes, and reductions in slaughter capacity. Herd expansion in the U.S. remains limited, and packers have reduced shackle space to align with lower inventories.

Lower grain prices and feeder margins have encouraged heavier cattle weights. Feeder and fed cattle prices have remained strong in cash markets, while futures markets have shown signs of recovery. We encourage producers to consider responsible forms of price protection to help manage potential headwinds and uncertainty.

Cold-storage availability and lower supplies should continue to support profitable price levels. Demand from Mexico and other regional markets has been helpful, although overall exports remain down.

Feed costs, particularly corn and soymeal, have contributed to heavier weights. While the fourth quarter is known for seasonal-price pressure, current market conditions suggest a potential rebound. Health risks such as PRRS and PEDV continue to warrant close monitoring due to their impact on both production and pricing.

Declines in exports to China, Japan, and Canada have been partially offset by demand from Mexico and Central America. African Swine Fever remains a concern for Spain’s commercial herds; should an outbreak occur, U.S. producers could benefit. Downside risk protection may be a useful tool to help safeguard profitability.

The dairy industry is experiencing higher supplies amid unmet demand, which has significantly pressured milk prices. Declines in butter and cheese markets have further weighed on pricing. Conversely, the whey protein market has seen a notable increase in demand.

For many dairy operations, profitability has been supported by cull cows and beef-cross calves, providing a critical revenue source. While this has helped bridge margins, time will tell how sustainable this support remains. Until prices stabilize, managing costs and focusing on efficiency controls may be prudent strategies.

Looking Ahead Together

We are excited to share that our team continues to grow, and our success goes hand in hand with the success of our valued customers and the communities we call home. This time of year provides an opportunity to meet with you and develop personalized plans that align with your strategic goals, both now and into the future.

As you think about your operational objectives, we encourage you to engage with our team of experts who can help guide you along the way. It is a privilege to work with so many dedicated producers, and we appreciate the hard work you do to make a difference every day.