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With another fall harvest wrapping up, farmers across the U.S. are gearing up for winter. They’re also turning their attention to the 2025 growing season as they look for strong production amid tighter margins.

As the temperatures drop, ag operators will be keeping a close eye on snowfall totals. While drought conditions are steadily improving across the Corn Belt, subsurface moisture levels are still a concern for many farmers, and average to above-average snowfall will help alleviate some worries before crops go in the ground again.

This time of the year is also the typical farmland buying season, and record prices in different parts of the country have made headlines. It will be worth keeping a close eye on land value markets and whether prices moderate to some degree next year. Farmland is and will continue to be an extremely important asset for farm operations.

U.S. row crops

According to the USDA, 49% of the winter wheat crop is in good or excellent condition as of November 17, compared to 48% at this time last year¹.

Despite a near-record U.S. corn harvest, investors have a bullish stance on corn futures at the moment. Managed money funds are net long in corn by the largest amounts in nearly two years due to high sales volumes and pessimistic 2024 carryout².

Digging deeper into the markets, agricultural commodities in general have been volatile since the U.S. presidential election due to uncertainty around potential new tariffs, which may weaken demand for U.S. grown commodities.

Operators are also keeping track of progress with the latest farm bill and its $39 billion in new resources for farmers, including lower crop insurance premiums. Activity is unlikely before the new Congress is sworn in next year, meaning extending the 2018 legislation will likely be the top focus for leaders over the next few months before renewing a push for a new bill sometime in 2025.

U.S. livestock and dairy

There is a growing concern around the avian metapheumovirus (aMPV) in the U.S. turkey industry, though the number of impacted birds in the country is currently unknown. USDA officials did recently issue a permit to allow the importation of a European vaccine that has shown excellent results combatting the virus³, which attacks the respiratory system of birds.

The U.S. dairy industry is enjoying a strong finish to the year. Class III milk is down nearly 9% since October 1, but dairies have been experiencing higher-than-expected milk prices throughout the third quarter. Nonfat dry milk and dry whey price forecasts were increased due to tight inventories in the latest USDA Livestock, Dairy and Poultry Outlook⁴.

Local ag outlooks

Al Gathje, Ag Banker, St. Charles, MN

The biggest reason for farmers in this area to be excited right now is grain yields, though grain prices, as well as overall operating costs, present the biggest reason for concern.

Harvest was completed at a near-record pace in southeastern Minnesota. Some producers are looking ahead and being proactive with financial planning. High yields should provide a buffer to the lower prices.

Local dairy operations are experiencing strong milk prices with low feed costs. Beef producers continue to benefit from one of the strongest cattle markets in years.

Jenny Vandehoven, Ag Banker, Carrington, ND

Weather stayed nice late into the fall, which allowed farmers to harvest their crops before any snowfall. Farmers are excited about the high yields throughout our area.

Low commodity prices have been a concern for area farmers. They’re worrying about low profitability and lower working capital heading into the 2025 crop year.

There has been quite a bit of movement with land in the area. The good farmland continued to get a premium and the average-to-marginal farmland still is getting 10-20% above the highs from the last year.

Finally, the Green Bison Soybean Processing plant is up and running near Spiritwood, ND. This plant will provide a positive impact to soybean producers in our area by providing them with another marketing option.

Global agriculture

The war between Russia and Ukraine continues to escalate, and the ongoing tensions have impacted commodity markets in recent years, as Ukraine is a major agricultural producer and Belarus, a Russian ally, produces a large amount of global potash.

In South America, the news is a bit more positive lately, as Brazil is expected to export a record volume of soybean meal in 2024⁵. This year’s crop is expected to be about 12.5% larger than last year’s. Corn crops are also doing well in the country, with a 3.6% production increase expected from 2023⁶. Brazilian moisture levels have recovered after a hot and dry summer, fueling the strong numbers.

What to watch for

A few common issues for farmers deserve attention in the months ahead: moisture levels and land prices. Winter snowfall, as well as spring rain, will be watched closely, particularly as the region has grappled with drought the past few years.

Meanwhile, rising farmland values will continue to impact farmers’ balance sheets. Those looking to sell land are of course more receptive to the high prices, but operators wanting to expand their operations may face more strategic financial decisions in 2025.

On the policy side, a new agriculture secretary will replace Tom Vilsack, who has served in the role since his confirmation in 2021. Farmers will be tuned in to the new secretary and any policy changes that may impact the ag industry. Farmers will also be watching whether the farm bill gains traction next year.

As always, be sure to work with an experienced ag banker who can help you prepare for growing season and navigate any new policies that impact farmers.