Tale of two outlooks in latest FAPRI report

The latest agricultural market baseline report from the University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI) shows contrasting outlooks for row-crop and livestock sectors in 2025 and beyond.

For crop producers, net returns are down sharply from recent peaks as output prices decline more than input costs. The cattle sector, on the other hand, is experiencing record prices and returns to cow-calf producers. Meanwhile, uncertainty about domestic programs and trade policy is unusually high.

One key finding in the report is the potential for a temporary rebound in net farm income, which may appear to be contradictory in this complex agricultural environment. But FAPRI Director Pat Westhoff pointed out that the upturn is directly related to one-time government payments that are expected to provide some relief in 2025.

“We’re showing an increase in farm income this year, not because of an increase in crop receipts or livestock receipts, not because a big reduction in production costs, but because of increasing government payments,” Westhoff said. “A bill passed last December for $10 billion in economic assistance, and another $20 billion in new disaster aid is expected sometime during 2025. This rebound could give way to declines in later years, but changes in policies or market conditions could significantly impact these figures.”

Westhoff and other FAPRI analysts presented the latest findings at the Abner Womack Missouri Agriculture Outlook Conference on April 9 in Columbia. The outlook provides 10-year baseline projections for agricultural and biofuels markets and serves as a point of reference for food and farm policy. The report is prepared using market information available in January 2025 but does not attempt to predict policy changes—in particular, impacts of U.S. tariffs or new farm bill provisions.

The full report is available online at fapri.missouri.edu, but here are some highlights:

•    Net farm income fell by $43 billion between 2022 and 2024, as the drop in crop returns outweighed the effects of stronger cattle prices. Net farm income is projected to increase in 2025 with government payments but declines again in 2026. No additional ad hoc programs are assumed in this current-policy baseline.

•    Grain and oilseed prices declined sharply from their peaks in 2021-22 and 2022-23. Corn prices, which peaked at $6.54 per bushel in 2022-23, are projected to average $4.23 for the 2025 crop. Similarly, soybean prices fell from $14.20 per bushel in 2022-23 to a forecast $10.02 in 2025-26. Projected wheat prices fell to $5.50 per bushel in 2025-26 after averaging a record $8.83 in 2022-23.

•    Prices for cotton, rice, sorghum and other crops have also declined sharply from recent peaks. Variable production expenses have declined but not as much as market revenues.

•    The beef cow herd has been declining since 2019 because of drought and other factors, and the result has been an increase in cattle prices, expected to reach a record level in 2025. Current high returns to cow-calf operators are projected to eventually cause the cycle to turn, and cattle prices fall again after 2027.

•    Lower feed costs have improved profitability for pork, poultry and milk producers. Projected prices remain below the peak levels of 2022, but will be sensitive to feed costs, international markets and domestic demand.

•    Highly pathogenic avian influenza and related flock liquidations pushed egg prices to record levels in February 2025, and continued price volatility is likely. Consumer food price inflation slowed to 2.3% in 2024, but higher meat and egg prices contribute to a projected 2.6% increase in consumer food prices in 2025.

•    Strong growth in renewable diesel production increased demand for vegetable oil, along with other fats and oils. Policy changes could significantly shape the future outlook.

Cutline for top image: Ben Brown, left, senior research associate with the University of Missouri’s Food and Agricultural Policy Research Institute, moderates a panel discussion on the future of U.S. agricultural trade during the annual Abner Womack Missouri Agriculture Outlook Conference April 9 in Columbia. On the panel are, from left, Erin Nazetta of Broadview Capital Holdings, Joe Schuele of the U.S. Meat Export Federation, and Taylor Adamek of the Missouri Department of Agriculture.