Forecast Points to Deeper Losses for U.S. Field Crops in 2025
A new economic model from Farmdoc forecasts a -20% private market net return at harvest for key U.S. field crops in 2025, signaling a continuation of tight margins.
New projections from Carl Zulauf and Gary Schnitkey at Farmdoc paint a bleak picture for 2025 profitability across the nine field crops tracked by the USDA's Economic Research Service. Based on a model with 79% explanatory power, the forecast suggests continued economic losses-driven by negative storage returns, high global stock-to-use ratios, and persistent market weakness.
The model incorporates three statistically significant variables: previous-year net return at harvest, average net return to storing U.S. corn and soybeans, and the global ratio of beginning stocks to prior-year use. Together, these explain most of the year-to-year variation in U.S. crop profitability since 1975.
Explaining Private Market Net Return at Harvest, US Cost of Production Crops, 1975-2024
| Explanatory Variable | Coefficient | Statistical Significance |
|---|---|---|
| Intercept | 0.133 | 97.0% |
| US private market net return at harvest prior year | 0.599 | 99.9% |
| Average net US corn and soybean storage return prior year | 0.278 | 99.9% |
| Beginning world stock to prior year world use | -0.589 | 97.8% |
| R² (equation explanatory power) | 79% | 99.9% |
Source: Farmdoc Daily
Using this model, the 2025 net return at harvest is forecast at -20%, down from -17% in 2024. The combined economic loss across barley, corn, cotton, oats, peanuts, rice, sorghum, soybeans, and wheat is projected at $36.4 billion.
These findings reflect long-term pressures on crop profitability. Farmdoc identifies four historic periods: positive returns during export booms (1975-1980 and 2007-2013), persistent losses during the 1980s and early 2000s, and mixed results since 2014, with an average return of -6% per year across the entire 1975-2024 period.
Interestingly, U.S.-level stock-to-use ratios were not statistically significant, but global stocks were. This suggests that world supply conditions increasingly dictate U.S. price and return structures, reinforcing the globalized nature of commodity markets.
The model also confirms what many producers already sense: tight margins persist, and recent relief payments haven't altered core economic conditions. Survey data and past results show that large past-year returns tend to revert toward zero, and losses rarely reverse quickly without significant demand shifts or supply shocks.
Net return to storage-particularly for corn and soybeans, which account for over 70% of planted acres-also acts as an early signal of supply-demand tension. A negative return to storage indicates burdensome supply relative to demand, which typically forecasts weaker price outlooks.
As policymakers consider 2025 safety net design, the Farmdoc team underscores the need for targeted payments that reflect structural cost challenges-not just short-term revenue dips. An upcoming article from the team will explore policy implications of this forecast, including whether additional ad hoc aid will be required.
