The January USDA World Supply and Demand Estimates (WASDE) report is often known as being a “market mover”, and the WASDE report released on January 10th did not disappoint. USDA made significant downward adjustments to final 2024 corn and soybean production numbers, based on lowering the final 2024 national average corn yield by 2.1 percent and the average soybean yield by 1.9 percent. The reductions in the corn and soybean supply, together with only minor adjustments in corn and soybean usage, resulted in a significant decline in projected ending stocks for both crops compared to a month earlier. The initial market reaction following this report was an increase in both corn and soybean prices on the Chicago Board of Trade (CBOT).
 
CORN
The updated National Ag Statistics Service (NASS) Crop Production Report for 2024 was also released on January 10th. The report estimated the final 2024 U.S. average corn yield at 179.3 bushels per acre, which was a decrease of 3.8 bushels per acre from November’s estimate. The 2024 corn yield estimate is still a new record average U.S. corn yield, surpassing the previous record U.S. yield of 177.3 bushels per acre in 2023, and compares to 173.4 bushels per acre in 2022. The corn yield estimates in the latest NASS report were lowered by 4.9 percent or more in Minnesota, Indiana, and Kansas, compared to the last yield estimate in November. Minnesota is estimated to have a final 2024 average corn yield of 174 bushels, while Iowa is projected to have a final corn yield of 211 bushels per acre. Other estimated average corn yields for 2024 included Illinois at 217 bushels per acre, Indiana at 198 bushels per acre, Ohio at 177 bushels per acre, Nebraska at 188 bushels per acre, Wisconsin at 174 bushels, South Dakota at 164 bushels per acre, and North Dakota at 149 bushels per acre.
 
The latest WASDE report listed the total 2024 U.S. corn production at 14.87 billion bushels, which was lowered from 15.14 billion bushels last month. The 2024 U.S. corn production was below the record level of 15.34 billion bushels in 2023; however, it is still about 1.2 billion bushels above the 2022 corn production level. The latest USDA report put the total demand for corn usage in 2024-25 at just over 15.1 billion bushels, which is a slight increase from 2023-24 corn usage figures. USDA is projecting corn export levels to increase by 158 million bushels in 2024-25, along with slight increases of 21 million bushels in corn used for feed and 22 million bushels in corn processed into ethanol. 
 
USDA is estimating 2024-2025 U.S. corn ending stocks at 1.54 billion bushels, which was a decrease of 198 million bushels from the December WASDE report. The estimated 2024-25 ending stocks are 12.6 percent lower than the final ending stocks of 1.76 billion bushels in 2023-24; however, the current projected carryover exceeds the 1.36 billion bushels in 2022-23. The corn stocks-to-use ratio is now estimated at 10.2 percent for 2023-24, which compares to ratios of 11.9 percent in 2023-24, 9.9 percent in 2022-23, and 9.2 percent in 2021-22. At this point, the projected 2024-25 ratio is still well below the relatively high stocks-to-use ratios of 13.7 percent in 2019-20 and 14.6 percent in 2018-19. The anticipated reduction in the available corn supply could offer some potential for short-term rallies in the cash corn market in the coming months.
 
USDA is currently estimating the U.S average on-farm cash corn price for 2024-25 at $4.25 per bushel, which is an increase of $.15 per bushel from the December estimate. The market year average (MYA) corn and soybean price estimates for 2024-25 are the expected average farm-level prices for the 2024 crop from September 1, 2024, through August 31, 2025; however, they do not represent estimated prices for either the 2024 or 2025 calendar year. The projected 2024-25 corn price of $4.25 per bushel compares to a final MYA price of $4.55 for 2023-24 and is a significant decline from the final MYA prices of $6.54 per bushel for 2022-23 and $6.00 per bushel in 2021-22. The current projected MYA price is also slightly lower than $4.53 per bushel in 2020-21; however, it far exceeds the national average corn prices of $3.57 per bushel for 2019-20, $3.61 per bushel for 2018-19, and $3.36 per bushel in 2017-18.
SOYBEANS
The latest NASS report projects the final 2024 U.S. average soybean yield at 50.7 bushels per acre, which was a decrease of one bushel per acre from the November yield estimate. The 2024 yield compares to recent final U.S. average yields of 50.6 bushels per acre in 2023, 49.6 bushels per acre in 2022 and 51.7 bushels per acre in 2021. Total U.S. soybean production for 2024 is estimated at 4.366 billion bushels, which is an increase of 204 million bushels from the final 2023 production level. The recent WASDE report estimates total soybean demand at 4.349 billion bushels for the 2024-25 marketing year, which is an increase of 244 million bushels from 2023-24 soybean demand levels. Soybean crush levels are expected to increase by 123 million bushels in the current marketing year, while soybean exports are expected to be 130 million bushels higher than 2023-24 levels. Soybean exports in 2024-25 would still be 155 million bushels below 2022-23 export levels. 
 
The latest WASDE report estimated U.S. soybean ending stocks for the 2024-25 marketing year at 380 million bushels, which was a decrease of 90 million bushels from the December report. The projected 2024-25 soybean ending stocks are an increase of 38 million bushels from the 2023-24 carryout level of 342 million bushels. The current projected ending stocks compare to recent year-end carryout levels of 264 million bushels in 2022-23, 274 million bushels in 2021-22, and 257 million bushels for 2020-21 Current levels are well below ending stocks of  525 million bushels in 2019-20, 913 million bushels in 2018-19, and 438 million bushels in 2017-18.   
 
The soybean stocks-to-use ratio for 2024-25 is now estimated at 8.7 percent, which is similar to the final ratio of 8.3 percent in 2023-24, but is higher than the ratios of 6.1 percent in both 2022-23 and 2021-22 and 5.7 percent in 2020-21. The projected 2024-25 ratio remains is still considerably lower than soybean stocks-to-use ratios of 23 percent for 2018-19 and 13.3 percent for 2019-20. The reduction in the 2024-25 estimated soybean supply may offer some opportunities for some short-term rallies in cash soybean prices in the coming months, especially if weather issues develop in South America or with the 2025 U.S. soybean crop.
 
USDA is projecting the U.S. average farm-level (MYA) soybean price for the 2024-2025 marketing year at $10.20 per bushel, which is unchanged from the December estimate. The estimated 2024-25 average soybean price would be a significant decline from the final soybean MYA prices of $12.40 per bushel in 2023-24, $14.20 per bushel in 2022-23 and $13.30 per bushel in 2021-22. The 2024-25 MYA price estimate would be comparable to the soybean MYA price of $10.80 per bushel for 2020-21; however it would still be considerably higher than the MYA prices of $8.57 per bushel for 2019-20 and $8.48 per bushel for 2018-19.  
 
Market Reaction to the WASDE Report
Both corn and soybean market prices showed a very positive market response following the release of the latest WASDE report on January 10th. Nearby cash corn futures on the Chicago Board of Trade (CBOT) increased by 14.5 cents per bushel following the report, closing at a price of $4.70 per bushel. This was the highest CBOT closing price for the 2024 corn crop since late June of 2024. By comparison, nearby corn futures were at $4.59 per bushel in 2024 and $6.70 per bushel in 2023 following the January WASDE report. The December CBOT corn futures price, which is used to determine price bids for the anticipated 2025 corn crop were up 3.25 cents per bushel at the market closing on January 10th, closing at $4.50 per bushel. The “new crop” CBOT corn futures prices were at $4.91 per bushel in 2024 and $6.07 per bushel in 2023 following the WASDE report in January.
 
CBOT cash soybean futures increased by 26.25 cents per bushel following the WASDE report, closing at a price of $10.25 per bushel. This was the highest CBOT closing price for the 2024 soybean crop since late October of 2024. The current nearby soybean futures price is well below the CBOT prices $12.40 per bushel in 2024 and $14.87 per bushel in 2023 following the January WASDE report. The November CBOT soybean futures price that is used to determine price bids for the anticipated 2025 soybean crop was up 17.25 cents per bushel following the WASDE report and closed at $10.31 per bushel. The “new crop” CBOT soybean futures prices were at $12.04 per bushel in 2024 and $13.97 per bushel in 2023 following the January WASDE report.

For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group
Phone --- (507) 381-7960; E-mail --- [email protected] 

As we head into 2025, many farm operations are coming off a relatively poor profit year in 2024; with some farmers having very small profit levels last year, while others had extremely poor results in 2024. In all cases, all farm operators continue to face very tight profit margins for crop production in 2025, as compared to a few years ago. During these challenging farm financial times, it is good to plan ahead before meeting with an ag lender for renewal of a farm operating line of credit or for an annual re-view of the farm financial portfolio.
Following are some tips for farm operators to be more proactive, as they are preparing for an annual meeting with their ag lender ……
• Prepare an up-to-date 2024 year-end farm balance sheet (as of 12-31-24 or 1-01-25).
Preparation of an accurate and up-to-date year-end balance sheet is critical to the loan renewal process for any farm operation. Updating the previous year’s balance sheet with current year-end numbers can help expedite the process. If the farm operation is a sole proprietorship, most ag lenders will also want personal asset and liability data included. If it is a partnership or family corporation, most ag lenders will also require personal balance sheets from all partners.
A good year-end balance sheet will include:
• List of accounts receivable as of 12-31-24, which includes whom the money is due from, the dollar amount, and the date it will be received. This includes deferred payments for grain sold in 2024.
• List of accounts payable as of 12-31-24, listing who the money is owed to, the dollar amount, and when payment will be due. Be sure to include any items listed as cur-rent assets where payment is still due, as well as final 2024 land rental payments that were still due as 12-31-24.
• List of 2024 prepaid expenses for both crops and livestock as of 12-31-24, which details the input, amount of the input, and the amount that was prepaid. This is for items where payment has occurred.
• Grain and livestock inventory list as of 12-31-24. The grain inventory should include total bushels of each crop, bushels that are forward priced (date and price for each sale), and any sales plans for the remaining bushels. Livestock inventory should include the number, weight, and any sales information on market or feeder livestock. An updated list and estimated value of breeding livestock should be included as an intermediate asset rather than a current asset.
• CCC loans on 2024 grain that were taken prior to 1-01-25, listing the bushel amount, CCC loan rate, CCC interest rate, CCC loan maturity date, and sales plans for the CCC grain.
• Review the list of farm machinery and equipment, buildings and facilities, and other capital assets, removing any assets that have been sold or removed, and adding any assets that were purchased or acquired during 2024. Farm machinery values should be adjusted to represent current market values.
• Add any land or other long-term assets that were added in 2024 and adjust asset values as necessary (may want to review this with an ag lender).
• List of all other loans and creditors as of 12-31-24, listing the principal balance, interest rate, payment amount, and payment dates. Be sure to include short-term credi-tors for crop and livestock inputs, loans with family members, and CCC loans through FSA offices.
• Prepare a 2024 year-end income and expense statement as of 12-31-24.
The year-end income statement from the previous year should be based on actual sales of grain and livestock during 2024, which will likely include some 2023 inventory that existed at the beginning of the year, as well as any 2024 grain or livestock that was sold during the year. The 2024 expenses would include any accounts payable from the beginning of the year balance sheet that were paid in 2024 and any 2025 prepaid expenses that were paid in 2024, in addition to the other 2024 crop and livestock ex-penses. A preliminary 2024 federal tax return is a good resource to prepare an income statement.
• Prepare a budget-to-actual summary for the previous year (as of 12-31-24).
Once the 2024 income and expense statement has been finalized, and accrual adjustments are made based on the year-end balance sheet, it always good to review the actual year-end financial analysis compared to the budgeted cash flow analysis that was prepared at the beginning of the year. Pay attention to the big differences that exist in crop and livestock income and the various expense items, as well as determine explanations for those differences. Analyze for any potential adjustments that are need-ed for 2025.
• Prepare a preliminary 2025 budget and cash flow analysis.
Preparing an accurate and complete budget and cash flow analysis for 2025 is a very important part of the loan renewal process and can assist with grain marketing deci-sions for the 2025 crop year. A high-quality cash flow analysis will likely include:
•Planned crop and livestock production for the year, including acres of various crops, anticipated production levels, and any current or planned sales of the 2025 produc-tion.
• A grain and livestock marketing plan that includes a list of the amount sold, the contracted price, and the date to be delivered, as well as plans for remaining unpriced grain and livestock inventories.
• A list of planned crop and livestock inputs for 2025, the contracted or planned price of the inputs, and when the expense will be incurred.
• A detailed list of rented farmland for 2025, which includes the name of the farm owner, acres rented, amount of rent (including flexible lease details), and dates when rent payments are due.
• Include income received for accounts receivable on the year-end balance sheet and account for the expenses of any accounts payable at the beginning of the year.
• Include any other farm income (custom work, etc.) and non-farm expenses (family living, personal loans, etc.) that must be accounted for in the cash flow analysis for the farm.
• Provide details of planned 2025 crop insurance coverage, such as updated APH yields, percentage coverage, enterprise versus optional units, and the addition of hail or wind insurance. (Your ag lender may be a good resource for these decisions.)
• Provide a copy of FSA farm program information listing the crop base acres and FSA program yield for each farm unit. Discuss the 2025 farm program choice with your ag lender.
• Include any planned changes or adjustments in the farming operation for 2025 in the cash flow analysis, including farm machinery purchases or sales, adding or selling land or other assets, and any other changes to the farm business, as well as any changes in personal assets or liabilities.
• Once USDA announces details, potential payments for farm economic assistance and disaster assistance could be included. Possible 2024 ARC-CO payment estimates for corn and soybeans, based on final 2024 county yields and 2024 MYA price estimates, could also be included.
It is best to include all partners and family members that are part of the farm operation in the renewal process with an ag lender, so that all key players are “on the same page” with financial decisions affecting the farm business. It is very important to be trustworthy and honest in preparing and sharing financial information with an ag lender to help assure confidence in the accuracy of the financial data. View an ag lender as an informal partner in a farm business, as a good ag lender can be a valuable resource in making management decisions.
Farm operators should expect their ag lenders to be well prepared, trustworthy and honest in financial dealings. It is important to remember that most local ag lenders also face a lot of pressure in the process of renewing farm operating loans and that they need to do their “due diligence” to complete the necessary requirements in the loan renewal process. The documentation that is prepared will likely be reviewed by senior management at a financial institution, as well as be subject to review and au-dits by Federal and State bank examiners. Most ag lenders are part of the local community and want to see farmers have financial success, which is in the best interest of both the farm business and the ag lending institution.
Note - For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone - (507) 381-7960; E-mail - [email protected]