With January 1st right around the corner, everyone is looking forward to the start of 2025. New Year’s resolutions have been created and new opportunities await. Farmers and members of the local agriculture community are not exempt from this. Many are assessing the new challenges and opportunities that lie ahead. The weather may prove to be an opportunity for producers to grow high performing crops, but it could also present unforeseen challenges. The Farmer’s Almanac can be a source of information to many trying to speculate on what the weather may do annually; however, long range forecasting of weather is continuously challenging, even with the Farmer’s Almanac. Additionally, grain markets can prove to be volatile and follow a random walk theory as many economists call it. Finally, major changes and trends could have significant impacts on area producers leading into the new year.
Net Farm Income
While net farm income is dependent upon factors that are highly volatile and hard to project, the University of Illinois Farmdoc Daily team is projecting negative returns in 2025. Their predictions are improved from 2024 levels based on a multitude of factors. Grain prices are projected to remain low, yet yield expectations are high and fertilizer costs should be reduced. Dr. Nick Paulson and Dr. Gary Schnitkey of the University of Illinois Agricultural Economics Department prepared the 2025 crop budget for different regions and crops across the state, with Central Illinois showing $72-73 losses per acre in cash rent situations for corn producers and $50-59 losses for the same criteria on soybean acres. These are simply projections, but they will challenge farmers to find ways to be profitable in the next year.
Presidential Change
Another significant change to agriculture in 2025 will be the return of President Trump to the Oval Office. He has already selected Brooke Rollins to replace Secretary of Agriculture Tom Vilsack and run the USDA. Rollins, who grew up on a farm in Texas, is a candidate with experience in Texas state government and as president of an Austin based conservative think tank. She served as a White House aide during the first Trump Administration. Since 2021, Rollins has worked with Larry Kudlow to form the non-profit America First Policy Institute.
President Trump has stated he is dedicated to deregulating the agriculture industry and reducing red tape for agricultural innovations, such as pesticides and genetically modified crops. Another impact with the Trump Administration’s return lies in the tariffs that are bound to be imposed, given President Trump’s track record from 2017 to 2021 and some of the promises he has made to incentivize industries to remain and further develop within the U.S. As the leading Midwestern state for agricultural exports, some argue that Illinois stands to lose if intense trade wars and export battles result. During the first Trump Administration, 2018 proved to be a year of significant decline in corn and soybean exports, primarily due to trade relations with China. Brazil and Argentina have emerged as competitive producers of the two crops that Illinois relies so heavily on, with China being the leading purchaser of these commodities. A trade war with China, similar to 2018, would likely result in depressed grain prices once again due to reduced international demand for U.S. produced corn and soybeans.
Farm Bill
It is not all doom and gloom on the horizon for local producers. The most recent extension of the Farm Bill passed with the spending bill through the House and Senate and was signed by President Biden on Saturday, December 21st. While the extension does not provide the updates necessary for the Farm Bill that was scheduled to be revisited in 2021, it does allow the government to continue operating and prevents the U.S. from going over the “Dairy Cliff.” A bright spot in the spending package is $10 billion dedicated to buffer lower commodity prices and high production costs, with an additional $20 billion laid out for disaster assistance for agricultural producers. The $10 billion is set to provide $43 per acre for corn produced in 2024 and $28 for soybeans produced in 2024, with a cap at $125,000 per operation, or $250,000 if 75% or more of the farmer’s income is from farming operations. This spending will provide much needed relief to some producers and allow others to comfortably operate into times of further economic uncertainty.
One of the knowns of farming is that there is not much to be certain about, and the results from year to year cannot be taken for granted. While weather conditions continue to be variable, improved genetics provide some drought tolerance and tiling has improved farmers’ ability to prepare and work fields in a timely manner and limits ponding during periods of excessive rainfall. Certainly, 2025 will be a year of further agronomic progress and improvement in growing crops, with farmers getting lean and figuring out ways to persist into 2026.
For more information on the projected Net Farm Income’s from the Farmdoc Daily team, follow the links below;
For more information on how tariffs and a possible trade war may affect US producers, follow the link below;