Posted on February, 26, 2025 at 04:44 pm
Farmers in the US plan to plant more maize and fewer soybeans this spring than they did last year, hoping to eke out a profit and shield themselves from US President Donald Trump’s threatened tariffs, growers and analysts said.
“When you look at relative profitability, maize is winning the acreage battle,” said Frayne Olson, an agricultural economist with North Dakota State University.
Some farmers may be able to earn “a nickel or two” on every bushel of maize, Iowa State University economist Chad Hart said. But for soybeans and other crops, prices have fallen below the cost of production. “Right now, given what cost structures look like,” Hart said, “maize has the best pathway to make a little profit in 2025.”
Planting decisions that are usually finalised in winter help determine the production of maize and soybeans, the top two US cash crops. The grains are primarily used for animal feed, cooking oils and renewable fuels. The US is the world’s largest maize exporter and the No. 2 soybean supplier after Brazil.
Global maize stockpiles are projected to hit a decade low this year, so a big US crop would help replenish inventories, making more grain available to world buyers. Still, more US maize stays in the country than soybeans, making maize a better hedge against tariffs.
Ag lender CoBank projected last week that US farmers would plant 94.55 million acres of maize in 2025, up about 4% from 2024, while soybean plantings would fall to 84.0 million acres, down 3.6% from a year ago.
Growers face a third straight year of dwindling crop revenues, making decisions about what and how much to plant much tougher. Farmers are expected to turn a slight profit in 2025, largely because of government disaster relief, even as income from crops is expected to fall for a third straight year, the USDA forecast this month.
Prices for maize and soybeans, as well as other major crops such as wheat and cotton, are low enough that American farmers will struggle to turn much of a profit with any of them, economists said.
“This year, it’s all about what crop is going to lose the least amount of money,” said Eric Kroupa, a farmer in central South Dakota who raises maize, soybeans, wheat and cattle.
Trump’s tariffs against major buyers of US grain may add to maize’s advantage while discouraging soybean plantings. The US exports about 40% of its soybean crop each year but only about 15% of its maize harvest, leaving soybean prices more sensitive to trade disruptions.
China is by far the world’s top soy buyer, booking more than half of US soybean exports annually, while the customer base for US maize is more varied.
Trade tensions with China flared this month after the Trump administration slapped 10% tariffs on all Chinese imports, and Beijing responded by imposing limited tariffs on a smaller set of US goods, excluding agriculture products. Duties against Mexico, another major buyer of US grains, and Canada, a buyer of US grains, meats and food products, are set to take effect on March 4.
The skirmishes echoed a trade war with China in 2018, during Trump’s first term in office, after which China shifted more of its purchases of soybeans and maize to Brazil. For the current marketing year, the USDA estimates that Brazil will supply 58% of world soybean exports, compared to just 27% for the United States.
Farmers often book seed and fertilizer purchases over the winter, well ahead of planting season in April and May. But this year, low prices and uncertainty surrounding trade have prompted at least some growers to delay planting decisions until spring.
“A lot of people won’t make final decisions right now,” said Nancy Johnson, executive director of the North Dakota Soybean Growers Association. “The tweaking you do on those last acres will be at the last possible moment, based on what’s happening at that moment.”
Maize futures have rallied in recent weeks, signaling profitability for growers. Benchmark Chicago Board of Trade (CBOT) corn (maize) futures Cv1 fell to a four-year low below $4 a bushel in August but climbed back above $5 this month, rising about 9% since January 1.
Soybeans Sv1, which produce smaller yields, hit a four-year low below $10 a bushel in December, followed by a more modest rebound.
David Justison, who grows maize, soybeans and wheat on 9,000 acres in south-central Illinois, scaled back his winter wheat acreage last autumn, freeing up about 300 acres where he will probably plant maize rather than soybeans. “It just looks like it might be a little bit better economics,” Justison said.
Source: NTV