Crops > Outlook & Prices > Outlook & Prices
January 2025
Big crops got smaller
As USDA always does at the beginning of the new year, they update the final production numbers for the previous year and provide an early look at usage based on the data since harvest. This year’s final numbers revealed big corn and soybean crops, but smaller than previously estimated. The changes in crop usage were relatively smaller and made to align with the smaller crop production. The markets received some good news, with supplies shrinking more than usage. Projected stocks at the end of the marketing year diminished and the corn price estimate for the 2024 crop increased by 15 cents, although the 2024 soybean price did not move. Profit margins disappeared over the latter half of 2024, but the outlook for 2025 is mixed with corn seeing slightly higher prices and lower costs. Profit opportunities will be harder to find once again, with corn having better prospects than soybeans. Thus, the economic outlook for 2025 remains challenging, with prices at or below production costs.
Crop production continues to be strong, despite weather challenges. The January update showed that the late growing season dryness did nip off some of the high-end yields, but overall production held up well. The final national yield estimate reached a record 179.3 bushels per acre, down 3.8 bushels from the prior estimate, but two bushels higher than the previous record from 2023. Record yields were established in Arkansas, Louisiana, New York, Michigan, South Dakota, Illinois, and Iowa. In November, Nebraska, Wisconsin, and Indiana were projected to reach records as well, but the late dryness knocked 11 bushels off Indiana, seven bushels from Wisconsin, and six bushels from Nebraska. Minnesota and Ohio also declined by eight bushels or more. Despite the record national yield, corn yields were lower across the board in the Southeast and Mid-Atlantic states. Iowa’s corn yield was lowered by two bushels, but still reached a record 211 bushels per acre.
The pattern for soybean yields was somewhat similar. While the national yield was not a record, it was a good yielding year despite the weather challenges. The national yield of 50.7 bushels per acre is a bushel lower than the November estimate and 0.1 bushels higher than the 2023 crop. Arkansas, Mississippi, and Georgia captured record yields. But the January update lowered yield estimates across the vast majority of the Midwest and Great Plains. Of the major producing states, Indiana and Kansas saw the largest drops, shedding three bushels per acre. For Iowa, the state average soybean yield fell one bushel to 60 bushels per acre.
Table 1 outlines all of the changes to the national corn supply and use balance sheet. USDA found that farmers planted fewer corn acres than previously projected, but increased harvested acreage. However, the decrease in corn yields overwhelmed the acreage shifts. The final estimate for corn production came in at 14.867 billion bushels, down 276 million from the previous estimate and nearly 500 million bushels less than the 2023 crop. And as is usually the case, when the production estimate decreases, so do usage estimates. USDA subtracted 50 million bushels from feed and residual usage and 25 million bushels from exports. With production falling faster than usage, the 2024-25 ending stock estimate declined by 198 million bushels, to 1.54 billion bushels, which is a substantial drop from the two billion estimates earlier in 2024. Given the downward adjustment in stocks, USDA raised its season-average price estimate by 15 cents to $4.25 per bushel.
The soybean data again tells a similar story to corn, with smaller production and stocks. While planted area did not change, the 2024 harvested area fell by roughly 200,000 acres, and the reduction in yields built on that. The combination brought the production estimate down by 95 million bushels, putting national production at 4.366 billion bushels, roughly 200 million bushels higher than the 2023 crop. For the most part, soybean usage estimates were held steady, with soybean crush at 2.41 billion bushels and exports at 1.825 billion bushels. The 2024-25 ending stocks decreased by 90 million bushels, to an estimate of 380 million bushels, which is 38 million bushels higher than the 2023-24 ending stock number. Despite the improving stock estimate for soybeans, USDA held its 2024-25 season-average price estimate at $10.20 per bushel.
The pricing outlook for 2025 is mixed. The season-average price estimate based on current futures for the 2024 crops has fallen below USDA’s season-average estimate for soybeans, but corn futures are providing more optimism. The cut in production gave both markets something to rally around. Beyond that, ethanol and export strength has been supportive of prices. But with the change in administrations and the significant prospects for tariffs on the horizon, export strength may fade. The early view for 2025 shows acreage moving out of soybeans and into corn. That shift could provide some relief for the soybean market in the long-run, but put additional pressure in the corn market to find additional usage to match the greater bushels, whether from biofuels or exports.
The latest Market Outlook video is also provided for further insight on outlook for this month.
Chad E. Hart, extension economist, 515-294-9911, chart@iastate.edu
