Ag Economist Offers Hope for Producers
Published: Friday, July 18, 2025
The year looks bleak for producers from an economic standpoint, but there is hope if farmers buckle down and watch their balance sheets, according to one expert.
Michael Langemeier, Purdue Extension agricultural economist discussed corn and soybean markets last month at a seminar in Goshen. He discussed his projections for crop prices, net returns, and cash rent and land value. He also noted changes in the ag economy barometer.
"A lot hasn't changed, which isn't exactly good news. Returns weren't very good in 2024, and they're likely to not be very good in '25," he said.
According to the USDA corn planted acreage report, about 95 million acres of corn are expected in 2025, up 4 million acres from a year ago.
"Going into late March and early April, it was very clear that the futures market and the cash market was encouraging people to plant corn," Langemeier said.
But, he said, the increased corn acreage is not all in the eastern Corn Belt, although Indiana's expected acreage did rise 3.8%. Soybean acres are still expected to be higher than corn in Indiana this year.
According to the June WASDE report, corn acreage is up 5%, about 5 million acres and yield is predicted to increase by two bushels, or 6% production increase. Corn price is expected to be down 15 cents from last year to $4.20.
The breakeven price today, Langemeier said, is at about $5.
"So, $4.20 corn is not very pretty when your breakeven price is $5," he said. "That's why net returns are relatively tight in the corn and soybean world, especially corn One of the reasons the corn price continues to be low is the stocks-to-use is expected to be relatively high," he said.
Anytime stocks-to-use is over 10%, he said, corn prices can be expected to be low.
"The only way we can bust out of these really low prices is to reduce those stocks-to-use," he said. "And that can happen through supply issues in the U.S. or South America, for example, or it can be a change in demand. Well, I've already said that demand is pretty strong, so what we're really looking for here is some kind of interruption in production, hopefully not in the U.S."
"Corn is king" in the U.S., he said, showing a chart that depicts the percentage of corn production by country worldwide. About one-third of the world's corn production is based in the U.S.
"We're by far and away the largest producer of corn in the world," he said.
The next highest corn producing country is China at 22%.
This year, there is more continuous corn in Indiana than last year.
The soybean WASDE report shows a 4.1% decrease in acreage, a 3.6% increase and a .6% decrease in production. This is largely due to the 4 million acres put into corn for 2025, which came directly from soybean acreage.
"The export market has been down a little bit," Langemeier said. "There's a lot of uncertainty in the export market because there's a lot of uncertainty with what's going to happen with China. A lot of our soybeans go to China."
Nearly a third of all U.S. soybeans are exported to China. The export market is down 1.9% due to fluctuating expectations and demand from China.
The other side of demand, the crush market, is up 2.9%, Langemeier reported.
The 2025 soybean price is expected to be $10.25, up from last year by 30 cents.
"But that's not a good soybean price when you compare it to the breakeven," he said.
The breakeven point for soybeans is projected to be about $11.50, currently, according to Langemeier.
"Soybeans right now is going to be a very tight margin crop for the U.S.," he said.
According to the WASDE report, 56.4% of the soybean market is projected to go to the crush market, 41.1% to exports and 2.5% to seed and residual. Langemeier said that traditionally, the export market receives about 50% of the soybeans, but that changed in 2018 during the trade war with China.
"One of the things that I'm really worried about with these latest trade issues is we're going to lose more market share to Brazil," he said.
Brazil currently holds 40% of the soy export market, while the U.S. holds only 31%, and Brazil is continuing to increase soy acreage.
The long-run average Indiana crop prices between 2007-24 are $4.72 for corn and $11.39 for soybeans.
Net farm increases are expected to be above zero.
"One of the concerns when you have a net farm income this low is repayment capacity," he said. "Well, coming into '24 and continuing into '25, balance sheets were quite strong."
He said farmers will be living off their balance sheet for a while, and likely for the next two or three years, by drawing from short-term liquidity and increasing the debt-to-asset ratio in the long-term.
Cash rents are expected to be down slightly this year compared to last year.
"I think the '25 conversations for cash rent for '26 is going to be a much tougher conversation than we've had in recent years regarding what we should do with cash rents. There's going to be some operators who are going to try to convince landowners that we need some adjustment down, and I would concur," Langemeier said.
Land values are expected to remain about the same, he said, due to less interest in investing in farmland and a better stock market in recent months.
He noted that June's farmer sentiment has been higher since the 2024 election. He said that people are more optimistic about the new policy environment.
Langemeier also noted that producers are most concerned about high input costs (37%) and lower crop and/or livestock prices (23%).
As farmers face a relatively bleak year in 2025, Langemeier encourages them to stay positive and look for the light at the end of the tunnel.
"The overwhelming majority of producers will get through this, but their balance sheet won't look as nice two years from now when, hopefully, we're at the end of this," he said.
Return to Top of Page