The highly contentious 2024 Election is now history, and we are now moving rapidly forward with a new Administration and several new members of Congress. There will be new leadership in the U.S. Senate and some changes in lead roles on the Congressional Agriculture Committees. There are many key issues and possible policy changes that potentially could affect the agriculture industry, which will likely be addressed by Congress and the White House in the next couple years. However, there are also some concerns and questions with some of these policy initiatives as we move forward.
It appears that Brooke Rollins of Texas will be appointed to lead USDA and serve as the next Secretary of Agriculture. Other nominees by President-Elect Trump that could play a key role in ag and energy policy development include Lee Zeldin, former New York Congressman, as Director of the Environmental Protection Agency (EPA), North Dakota Governor Doug Burgum as Secretary of the Interior, Chris Wright to lead the Department of Energy, Jamieson Greer as US Trade Representative, and Tom Hor-man as the Border Czar. These nominees for leadership roles in the new administration must now be approved by the U.S. Senate after January 1, 2025. The leadership of Federal Departments can have a big impact on how various agriculture, energy, and environmental policies are implemented and administered.
The leadership of key Congressional Committees, such as the House and Senate Agriculture Committees, will have a major influence on future agriculture and energy issues. Republican Senator John Thune from South Dakota, who has strong ties to agriculture and energy policy, will now be the leader of the U.S. Senate. Arkansas Sena-tor John Bozeman will be Chair of the U.S. Senate Ag Committee and Minnesota Senator Amy Klobuchar will be in the Democratic leadership role on the Ag Committee. Republican Congressman G.T. Thompson will continue the Chair the U.S. House Agriculture committee and Minnesota Second District Congresswoman Angie Craig will be the new lead Democrat on the Ag Committee. Both Senator Klobuchar and Congresswoman Craig are well respected by the Minnesota agriculture industry and have a history of working across party lines on ag policy issues. Minnesota Senator Tina Smith (D) will continue to serve on the Senate Ag Committee and First District Congressman Brad Finstad (R) will continue to serve on the House Ag Committee.
Following is some perspective on some of the key agriculture and energy policy issues that are likely to be under consideration during the next session of Congress, or by executive action from the Administration:
• FINALIZING A NEW FARM BILL --- The 2018 Farm Bill originally expired on September 30, 2023 and was extended for one year; however, it has now expired again and will likely be extended for an additional year until September 30, 2025. The U.S. House Agriculture Committee passed its version of a new Farm Bill in the Spring of 2024; however, the bill has not been voted on by the entire U.S. House of Representatives. Senator Debbie Stabenow (D), current Chair of the Senate Agriculture Commit-tee, released a version of a new Farm Bill after the 2024 Election; however, it was not acted on by Congress.
Some members of Congress and many agriculture leaders have proposed increasing crop reference prices, enhancing crop insurance options, and improving risk pro-tection opportunities for livestock producers and farmers that raise specialty crops. There has also considerable discussion regarding the importance of conservation programs and how those programs can enhance ongoing carbon sequestration efforts. Most members of both political parties agree that the nutrition title of the Farm Bill, which accounts for over 80 percent of the annual Farm Bill spending, should not be separated from the Farm Bill; however, there are some differences on specific provisions in the nutrition title. There are also many other important programs and provisions that are part of the existing titles in the Farm Bill, including rural develop-ment, ag research and extension, trade promotion, livestock disease mitigation, and beginning farmer loans.
• DOWNTURN IN THE FARM ECONOMY --- Profit margins in crop production have worsened considerably in the past two years, which could put some farm opera-tions at the brink of financial disaster. Crop production expenses and land rental rates increased substantially in 2023 and 2024, while crop prices for corn, soybeans and wheat have remained below breakeven levels, and are now at the lowest levels in several years. For farm operators that experienced crop losses in 2024 due to weather issues, the financial situation is likely even more severe. The struggling profit margins for crop producers are somewhat linked to discussions on the new Farm Bill and the need for improved risk management tools for farmers. Swine producers have also had very low or negative profit margins for much of the time in the past two years. Some dairy and poultry producers have been dealing with the financial impacts of the highly pathogenic avian influenza (H5N1) outbreak in certain areas of the U.S.
• TARIFFS AND TRADE POLICY --- Tariffs and trade policy have received a lot of discussion since the recent Presidential Election. President-Elect Trump has threatened to impose large additional tariffs on a variety of goods being imported into the United States from China, Mexico, Canada, and other countries. If the U.S. implements additional tariffs, there is high likelihood that the other countries could impose retaliatory tariffs on products and goods that are exported by the U.S. into these countries. China, Canada and Mexico are the three largest trading partners for U.S. ag exports, including corn, soybeans, ethanol, pork, beef, and dairy products. The trade war with China during the first Trump administration had a significant impact on the commodity prices of soybeans, pork, and other agricultural products. Farm groups are also hopeful that the new administration and leadership in Congress can negotiate new bi-lateral trade agreements with other countries, in addition to normalizing relations with China, Canada and Mexico.
• RENEWABLE FUELS AND ENERGY --- The next Administration and Congress will need to decide what direction the U.S. takes toward further development of renewa-ble fuels industry through the renewable fuels standards (RFS), year-round E-15 blends, sustainable aviation fuel (SAF) and other incentives for renewable fuels, such as tax credits, etc. Ethanol and renewable diesel production have a major economic impact for farm operators, as well as for the overall rural economy in the Upper Mid-west. Many ag leaders point to sustainable aviation fuel (SAF) as a key growth opportunity for both the ethanol and renewable diesel industries in the future. However, federal agencies have set up very stringent farm-level practices that farmers must follow in order to be eligible to sell their corn and soybeans to processing plants for SAF production. Due to the restrictions being placed on U.S. farmers and the processing plants, some of the current feedstock for SAF production, such as used cooking oil, is being imported from other countries.
• IMMIGRATION REFORM --- We are likely to see some significant changes in U.S. immigration policy by the new Administration and Congress; however, many indus-tries, including the agriculture industry, could be significantly impacted by some of the potential immigration reform policies. Both production agriculture and the ag processing industry rely heavily on an immigrant workforce, so major changes in getting needed workers into portions of the U.S. could greatly affect the rural economy in some locations. What is really needed is for Congress and the Administration to develop an immigration policy that secures the U.S. border, but also allows needed immigration to satisfy labor shortages in some segments of the economy.
The new Farm Bill, the struggling rural economy, ag trade agreements, and the future of renewable energy are only a few of the issues affecting farm families and rural businesses. There are many other issues and programs that affect rural families, businesses, and communities in a variety of ways. These include family health care ac-cess and costs, expansion of broadband coverage in portions of rural areas, infrastructure needs, assistance for beginning farmers, and other issues affecting agriculture and rural communities. The next few months should be interesting as the policy initiatives of the new Administration and Congress are unveiled.
Note - For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone - (507) 381-7960; E-mail - [email protected]

The highly contentious 2024 Election is now history, and we are now moving rapidly forward with a new Administration and several new members of Congress. There will be new leadership in the U.S. Senate and some changes in lead roles on the Congressional Agriculture Committees. There are many key issues and possible policy changes that potentially could affect the agriculture industry, which will likely be addressed by Congress and the White House in the next couple years. However, there are also some concerns and questions with some of these policy initiatives as we move forward.
It appears that Brooke Rollins of Texas will be appointed to lead USDA and serve as the next Secretary of Agriculture. Other nominees by President-Elect Trump that could play a key role in ag and energy policy development include Lee Zeldin, former New York Congressman, as Director of the Environmental Protection Agency (EPA), North Dakota Governor Doug Burgum as Secretary of the Interior, Chris Wright to lead the Department of Energy, Jamieson Greer as US Trade Representative, and Tom Horman as the Border Czar. These nominees for leadership roles in the new administration must now be approved by the U.S. Senate after January 1, 2025. The leadership of Federal Departments can have a big impact on how various agriculture, energy, and environmental policies are implemented and administered.
The leadership of key Congressional Committees, such as the House and Senate Agriculture Committees, will have a major influence on future agriculture and energy issues. Republican Senator John Thune from South Dakota, who has strong ties to agriculture and energy policy, will now be the leader of the U.S. Senate. Arkansas Senator John Bozeman will be Chair of the U.S. Senate Ag Committee and Minnesota Senator Amy Klobuchar will be in the Democratic leadership role on the Ag Committee. Republican Congressman G.T. Thompson will continue the Chair the U.S. House Agriculture committee and Minnesota Second District Congresswoman Angie Craig will be the new lead Democrat on the Ag Committee. Both Senator Klobuchar and Congresswoman Craig are well respected by the Minnesota agriculture industry and have a history of working across party lines on ag policy issues. Minnesota Senator Tina Smith (D) will continue to serve on the Senate Ag Committee and First District Congressman Brad Finstad (R) will continue to serve on the House Ag Committee.
Following is some perspective on some of the key agriculture and energy policy issues that are likely to be under consideration during the next session of Congress, or by executive action from the Administration:
• FINALIZING A NEW FARM BILL - The 2018 Farm Bill originally expired on September 30, 2023 and was extended for one year; however, it has now expired again and will likely be extended for an additional year until September 30, 2025. The U.S. House Agriculture Committee passed its version of a new Farm Bill in the Spring of 2024; however, the bill has not been voted on by the entire U.S. House of Representatives. Senator Debbie Stabenow (D), current Chair of the Senate Agriculture Committee, released a version of a new Farm Bill after the 2024 Election; however, it was not acted on by Congress.
Some members of Congress and many agriculture leaders have proposed increasing crop reference prices, enhancing crop insurance options, and improving risk protection opportunities for livestock producers and farmers that raise specialty crops. There has also considerable discussion regarding the importance of conservation programs and how those programs can enhance ongoing carbon sequestration efforts. Most members of both political parties agree that the nutrition title of the Farm Bill, which accounts for over 80 percent of the annual Farm Bill spending, should not be separated from the Farm Bill; however, there are some differences on specific provisions in the nutrition title. There are also many other important programs and provisions that are part of the existing titles in the Farm Bill, including rural development, ag research and extension, trade promotion, livestock disease mitigation, and beginning farmer loans.
• DOWNTURN IN THE FARM ECONOMY - Profit margins in crop production have worsened considerably in the past two years, which could put some farm operations at the brink of financial disaster. Crop production expenses and land rental rates increased substantially in 2023 and 2024, while crop prices for corn, soybeans and wheat have remained below breakeven levels, and are now at the lowest levels in several years. For farm operators that experienced crop losses in 2024 due to weather issues, the financial situation is likely even more severe. The struggling profit margins for crop producers are somewhat linked to discussions on the new Farm Bill and the need for improved risk management tools for farmers. Swine producers have also had very low or negative profit margins for much of the time in the past two years. Some dairy and poultry producers have been dealing with the financial impacts of the highly pathogenic avian influenza (H5N1) outbreak in certain areas of the U.S.
• TARIFFS AND TRADE POLICY - Tariffs and trade policy have received a lot of discussion since the recent Presidential Election. President-Elect Trump has threatened to impose large additional tariffs on a variety of goods being imported into the United States from China, Mexico, Canada, and other countries. If the U.S. implements additional tariffs, there is high likelihood that the other countries could impose retaliatory tariffs on products and goods that are exported by the U.S. into these countries. China, Canada and Mexico are the three largest trading partners for U.S. ag exports, including corn, soybeans, ethanol, pork, beef, and dairy products. The trade war with China during the first Trump administration had a significant impact on the commodity prices of soybeans, pork, and other agricultural products. Farm groups are also hopeful that the new administration and leadership in Congress can negotiate new bi-lateral trade agreements with other countries, in addition to normalizing relations with China, Canada and Mexico.
• RENEWABLE FUELS AND ENERGY - The next Administration and Congress will need to decide what direction the U.S. takes toward further development of renewable fuels industry through the renewable fuels standards (RFS), year-round E-15 blends, sustainable aviation fuel (SAF) and other incentives for renewable fuels, such as tax credits, etc. Ethanol and renewable diesel production have a major economic impact for farm operators, as well as for the overall rural economy in the Upper Midwest. Many ag leaders point to sustainable aviation fuel (SAF) as a key growth opportunity for both the ethanol and renewable diesel industries in the future. However, federal agencies have set up very stringent farm-level practices that farmers must follow in order to be eligible to sell their corn and soybeans to processing plants for SAF production. Due to the restrictions being placed on U.S. farmers and the processing plants, some of the current feedstock for SAF production, such as used cooking oil, is being imported from other countries.
• IMMIGRATION REFORM --- We are likely to see some significant changes in U.S. immigration policy by the new Administration and Congress; however, many industries, including the agriculture industry, could be significantly impacted by some of the potential immigration reform policies. Both production agriculture and the ag processing industry rely heavily on an immigrant workforce, so major changes in getting needed workers into portions of the U.S. could greatly affect the rural economy in some locations. What is really needed is for Congress and the Administration to develop an immigration policy that secures the U.S. border, but also allows needed immigration to satisfy labor shortages in some segments of the economy.
The new Farm Bill, the struggling rural economy, ag trade agreements, and the future of renewable energy are only a few of the issues affecting farm families and rural businesses. There are many other issues and programs that affect rural families, businesses, and communities in a variety of ways. These include family health care access and costs, expansion of broadband coverage in portions of rural areas, infrastructure needs, assistance for beginning farmers, and other issues affecting agriculture and rural communities. The next few months should be interesting as the policy initiatives of the new Administration and Congress are unveiled.
Note - For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone - (507) 381-7960; E-mail - [email protected]

At the end of every year, various publications, websites, etc. have their “Top 10” or “Top 5” list for that year. In this issue of “FOCUS ON AG”, I am highlighting my “Top 5 Ag Topics” for 2024, based on issues that were discussed in the columns throughout the year. Following are my “Top 5 Ag Topics” for 2024:
1. LOW GRAIN PRICES AND TIGHT PROFIT MARGINS IN 2024
As in most years, where farmers were positioned in the grain market and the grain marketing decisions that were made by farm operators will have a big impact on the profit levels for their crop enterprise in 2024. The “basis” level between Chicago Board of Trade (CBOT) prices and local corn and soybean prices has remained fairly tight in many areas of the Upper Midwest due to tight grain supplies, which enhanced grain marketing opportunities for the 2023 crop that was still in storage. Most crop input costs either increased or were steady in 2024 compared to expense levels in previous year; however, fertilizer, fuel, and chemical costs did modify somewhat in 2024. In many areas, land rental rates increased significantly in recent years and remained quite high in 2024, adding to the tighter profit margins. The U.S. Federal Reserve initiated a slight decrease in the prime interest rate this past Fall; however, short-term interest rates for fam operating loans are still above a few years ago. The higher interest rates, together with the need for more operating capital, has resulted in significantly higher interest costs for many farm operators.
The “new crop” corn prices in the upper Midwest did not offer many marketing opportunities during 2024. The “new crop” corn prices in Southern Minnesota started the year near $4.50 per bushel and spent most of the year below that level, ending the year near $4.40 per bushel. Many crop producers likely had breakeven costs of $5.00-$5.50 per bushel for 2024 at average corn yields on cash rented land. As a result, many farmers have not “locked-in” a forward price on very much of their 2024 corn crop and are hoping for stronger market prices in early 2025. The 2024 “new crop” soybean price in the region started the year near $11.50 per bushel, before dipping below $10.00 per bushel by July, and ending the year slightly above $9.50 per bushel. Similar to corn, there have been very few pricing opportunities for the 2024 soybean crop, as soybean breakeven costs are near $10.50-$11.00 per bushel for many producers.
2. RECORD RAINFALL AND VARIABLE CROP YIELDS
“Mother nature” was not kind to producers in the areas of the Upper Midwest that were heavily impacted by the excessive rainfall from late May until early July. Portions of Sothern Minnesota and extreme Northern Iowa were especially hard hit. In some cases, the same areas of southern Minnesota and northwest Iowa that had near-record rainfall during June also experienced near-record dryness from mid-August until early October. This impacted final yields for both corn and soybeans in numerous areas. Differing corn yields in many portions of the Upper Midwest were dependent on corn hybrid selection, planting dates, amount of tile drainage, and the level of excessive rainfall early the growing season. One piece of good news for producers regarding the 2024 corn harvest was the harvest moisture of the corn coming out of the field, which was a cost saving for many farmers.
Generally, the reported corn and soybean yields in most areas of the Upper Midwest were highly variable, mainly due to excessive rainfall in some locations early in the growing season and limited rainfall late in the growing season in portions of the region. The 2024 corn and soybean yields in large segments of southern and western Minnesota were not nearly as consistent as the past few years. Corn and soybean yields in 2024 were better and more consistent in much of Iowa, Illinois, Indiana, and other areas of the Eastern Corn Belt that benefitted from more favorable growing conditions.
3. NO NEW FARM BILL IN 2024
Once again, Congress failed to pass a new Farm Bill in 2024, after the current Farm Bill Extension expired on September 30, 2024. The U.S. House and Senate will likely pass a continuing resolution to provide additional federal funding to avoid a government shutdown at the federal level, which will also likely extend the current Farm Bill for an additional year year through September 30, 2025. This means that the current farm program and crop insurance provisions will remain in place through the 2025 crop year. It also will keep other important federal programs such as the Dairy Margin Coverage (DMC) program, Conservation Reserve Program (CRP), Environmental Quality Incentives Program (EQIP), and other popular USDA programs in place for at least another year. The extension will also keep the current Nutrition Title of the Farm Bill in place for another year.
An extension of the 2018 Farm Bill means that the “price loss coverage” (PLC) and “ag risk coverage” (ARC) farm program options for eligible crops will remain in place for the 2025 crop year and will be similar to PLC and ARC programs for the 2019 to 2024 crop years. The good news for producers for the 2025 crop year is that both reference prices for the PLC program and benchmark prices for the ARC-CO program will increase under provisions of the current Farm Bill. Once a Farm Bill Extension is finalized, the USDA Farm Service Agency (FSA) will provide details regarding 2025 farm program enrollment.
4. RESULTS OF THE 2024 ELECTION
2024 was a major election year nationally, as well as in Minnesota. The Presidential election dominated the national news, with added interest in Minnesota due to Governor Tim Walz being the Democratic Vice Presidential nominee with current Vice President Harris. Of Course, former President Donald Trump, the Republican candidate, was elected President in November, with J.D. Vance as Vice President. The Republican Party also gained a majority in the U.S. Senate for 2025, and maintained a small majority in the U.S. House. The primary focus since the election has been on the Trump nominees to lead various federal departments and agencies for the next four years, as well as what potential policies might be brought forward by the Trump Administration and Congress. The agriculture industry is paying particular attention to passage of a New Farm Bill, energy policy, trade and tariffs, and immigration policy.
The Fall election in Minnesota also ended in a surprise, with the Minnesota House of Representatives now with 67 Democrats and 67 Republicans heading into the 2025 Legislative Session. The “tie-situation” has only occurred once before in Minnesota history, following the 1978 election. The tie means that all the committees in the MN House that hear legislative proposals will have joint chairs. It should be interesting to follow how this situation unfolds in the first few months of 2025. The MN Senate remains at 34 Democrats and 33 Republicans, with Governor Tim Walz continuing in office.
5. SPREAD OF THE H5N1 VIRUS INTO DAIRY CATTLE
The U.S. and Minnesota poultry and turkey industry have dealt with the H5N1 virus (avian flu) for several years, which has resulted in millions of dollars in economic loss to producers. Early in 2025, the avian flu virus re-appeared in poultry and turkey flocks in Minnesota and other States; however, this time around the H5N1 virus also impacted dairy cattle. Since the H5N1 virus was first detected early in March this year, there have been 720 confirmed cases of the virus in dairy cattle in 15 States across the U.S. Fortunately, the H5N1 virus has not impacted on the Minnesota dairy industry as seriously as in some other States. Due to the continued spread of the virus, USDA recently issued a federal order to require nationwide testing of the U.S. milk supply for the H5N1 virus. USDA will be collaborating with State agencies to test raw milk for the virus and to track the movement of infected dairy cattle, in order to slow the spread of the virus. It should be pointed out that pasteurized milk and all processed dairy products are not impacted by the virus and are safe for consumers to eat, drink, and enjoy.
Note - For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone - (507) 381-7960; E-mail - [email protected]

Ask a farmer what their profit levels from crop farming were in 2024, and many of the answers in the Upper Midwest will likely be something like “worse than anticipated” to “disappointing” to “right down terrible”. Any of those answers could be correct, depending on where the farmer is located and how the heavy rains early in the growing season and the dry weather later in the growing season affected crop production in the area. The other big factor in farm profitability in 2024 was where farmers were positioned in the grain markets during the year, as well as the type and level of crop insurance coverage that was in place on the 2024 crop. Following is a brief overview of how some of these major factors will likely affect final farm profitability in 2024:
• 2024 CROP YIELDS - “Mother nature” was not kind to producers in the areas of the Upper Midwest that were heavily impacted by the excessive rainfall from late May until early July. Portions of Sothern Minnesota and extreme Northern Iowa were especially hard hit. In some cases, the same areas of southern Minnesota and northwest Iowa that had near-record rainfall during June also experienced near-record dryness from mid-August until early October. This impacted final yields for both corn and soybeans in numerous areas. One piece of good news for producers regarding the 2024 corn harvest was the harvest moisture of the corn coming out of the field, which was a cost saving for many farmers. Most of the corn harvested this Fall was under 18 percent moisture, which meant that a large portion of the corn crop could go directly in the bin for storage, without the need for additional drying.
Generally, the reported corn and soybean yields in most areas of the Upper Midwest were highly variable, mainly due to excessive rainfall in some locations early in the growing season and limited rainfall late in the growing season in portions of the region. The 2024 corn and soybean yields in large segments of southern and western Minnesota were not nearly as consistent as the past few years. Corn and soybean yields in 2024 were better and more consistent in much of Iowa, Illinois, Indiana, and other areas of the Eastern Corn Belt that benefitted from more favorable growing conditions.
Differing corn yields in many portions of the Upper Midwest were dependent on corn hybrid selection, planting dates, amount of tile drainage, and the level of excessive rainfall early the growing season. There were some “whole field” corn yield reports of 200 bushels per acre or higher in southern Minnesota and northern Iowa; however, there were also yield reports below 100 bushels per acre at some locations in south central and southwest Minnesota. Overall, many farmers in that region had final 2024 corn yields that were 10-20 percent or more below their crop insurance APH (average) yields.
• GRAIN MARKETING DECISIONS - The “new crop” 2024 corn prices in the upper Midwest did not offer many marketing opportunities, with very little movement during the year. The 2024 “new crop” corn prices in Southern Minnesota started the year near $4.50 per bushel and spent much the first six months between $4.20 and $4.40 per bushel, before dipping below $4.00 per bushel by harvest time. Many crop producers likely had breakeven costs of $5.00-$5.50 per bushel for 2024 at average corn yields on cash rented land. As a result, most farmers were not able to “lock-in” a forward price at a profitable level on their 2024 corn crop. They are now hoping for some post-harvest rallies in the corn market in early 2025. Due to higher interest rates than in recent years, storing grain in 2024-25 is more costly than a few years ago. USDA is currently estimating an average “on-farm” corn price of $4.10 per bushel for the 2024-25 marketing year, which ends on August 31, 2025.
The 2024 “new crop” soybean price in the region started the year near $11.50 per bushel, before dropping throughout the year and ending the year near $9.50 per bushel, with even lower prices at some locations. Following some favorable pricing opportunities for the 2024 soybean crop early in the year, market prices remained below the cost of production for most producers during the second half of 2024. The 2024 cost of production for soybeans on cash rented land is likely near $10.50 to $11.00 per bushel at average yields for many producers. Farmers that took advantage of soybean pricing opportunities early in the year were much more likely to show a small profit for 2024. USDA is currently estimating an average “on-farm” soybean price of $10.80 per bushel for the 2024-25 marketing year; however, prices in the past several weeks have trailed that level.
• 2024 CROP INSURANCE COVERAGE - The crop insurance harvest prices for corn and soybeans were well below the Spring base price levels. The base price is used to determine crop insurance guarantee per acre, while the harvest price is used to determine the harvest value. The lower harvest prices meant that farmers with 85 percent or higher insurance coverage on corn could start collecting 2024 crop insurance indemnity payments at yield levels slightly their average (APH) farm yields for corn and very near APH yields for soybeans. The level and type of crop insurance coverage that a producer carried for the 2024 crop year will impact farm profitability, especially in the areas that had greatly reduced crop yields for the year.
Corn and soybean producers had the option of selecting revenue protection (RP) crop insurance policies ranging from 60% to 95% coverage levels, which can result in some producers receiving large crop insurance indemnity payments others receiving very little or no indemnity payments at the same APH yield and final yields. The 2024 final harvest price for corn was $4.16 per bushel, compared to the Spring base price of $4.66 per bushel. If two farmers both had a 200 bushel per acre APH yield and a 170 bushel per acre actual 2024 corn yield, a farmer with an 85% RP policy would receive an indemnity payment of approximately $85 per acre, while a farmer with a 75% RP policy would receive no indemnity payment.
Corn and soybean producers also had the option of utilizing “enterprise units” or “optional units” for their 2024 crop insurance coverage. Enterprise units usually have a lower premium cost for the same coverage level and combine all acres of a crop in a given county into one crop insurance unit. By comparison, optional units allow producers to insure crops separately in each township section, which can be a big advantage in a year with variable yields, such as 2024. Some farm operators also had buy-up crop insurance coverage for 2024, which may have been beneficial in various locations this past year.
BOTTOM LINE
Corn and soybean producers with average yields could still have a negative profit year in 2024, depending on their level of crop expenses and their grain marketing decisions. Producers with below average to very low crop yields in 2024 will likely have reduced to disastrous profit levels for the year, depending on their crop insurance coverage and grain marketing decisions. Farm operators that are facing serious year-end cash flow shortages are encouraged to consult their farm management advisors and ag lenders sooner than later to look at ways to address the situation. Farmers that will receive large crop insurance indemnity payments for the 2024 crop year should be aware of tax implications and potential audits related to those payments. Many crop producers are now waiting to see if Congress passes a disaster and financial assistance bill that provides some financial relief to offset the losses in 2024.
Note - For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone - (507) 381-7960; E-mail - [email protected]
 
 
 
 

Many farm families may be facing a deadline that they are not even aware of. It is estimated that approximately 230,000 farms are required to file “Benefit Ownership Information (BOI) with the U.S. Department of the Treasury, as part of the Corporate Transparency Act (CTA) that was passed by Congress in 2021. The CTA act was passed to combat money laundering and illegal funding by organized crime. Farmers with certain types of business structures are required to file a BOI by January 1, 2025. Failure to comply with this requirement could result in significant fines and even jail time. As of late October, it was estimated that less than 15 percent of the farm operations that are required to complete a BOI had done so.
 
The Corporate Transparency Act requires any business, including certain types of farm business structures, to list any “beneficial owner” in a company with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The BOI filing requirement now applies to all small businesses of all sizes that have filed an incorporating document with their State government, including S-corporations, limited liability corporations (LLC’s), and partnerships. The new BOI requirement will now include many family farm operations that utilize these type of business structures. A “beneficial owner” includes anyone with significant stake in the company or farm’s business and management, which can include having shares, equity, or having a significant role in management decisions.
 
Based on the 2022 U.S. Census of Agriculture, 85 percent of all farms in the U.S. are operated as “sole proprietorships and would likely be exempt from filing a BOI. However, 12 percent of farm operations of all sizes have business structures that now fall under fall under CTA requirements requiring a BOI filing. Besides farming operations, many other agriculture related businesses such as seed and chemical dealers, feed and supply stores, repair shops, etc., with those type of business structures will also fall under the CTA requirements. As mentioned, failure to comply with the BOI filing requirement can result in fines and felony charges. 
 
Farmers and other small businesses can find out more details on compliance with CTA requirements and can file a BOI online by going U.S. Treasury Department BOI filing website at:  https://www.fincen.gov/boi. A possible resource for more information on the CTA law and BOI requirements is the CPA or tax accountant that prepares the taxes for the farm business each year and is familiar with the farm’s business structure. Another possible resource is the ag lender for the businesses, as many banks and financial institutions are very familiar with FinCEN regulations and BOI requirements.
Finalizing 2024 Farm Machinery Custom Rates
Many farm operators provide some type of custom work or use of farm machinery to other farmers during the growing season, and payment is usually made following the completion of the harvest season. Sometimes, it can be difficult to determine a fair custom rate for certain farming practices, or for the use of various pieces of machinery. This could be the case in a year such as 2024, when the cost of machinery operation for diesel fuel, repairs, and labor may have changed from the beginning of the year until year-end.
 
One of the best resources for average custom rates is the annual “Iowa Farm Custom Rate Survey” that is coordinated and analyzed by Iowa State University. Each year in January, custom operators and farm managers are sampled regarding the expected farm custom rates for various farm operations. The custom rate summary, which is usually released in late February, lists the average custom rate, as well as a range in custom rates, for various tillage, planting, fertilizer and chemical application, grain harvesting, and forage harvesting functions on the farm. The Iowa Custom Rate Survey is probably the most widely used custom rate information that is available in the Upper Midwest. The complete 2024 “Iowa Farm Custom Rate Survey” is available on-line at the following Iowa State University web site: https://www.extension.iastate.edu/agdm/crops/html/a3-10.html
The average custom rates for farm operations in most areas of the Upper Midwest tend to be very close to the average Iowa custom rates. All listed custom rates in the Iowa survey results include fuel and labor, unless listed as rental rates or otherwise specified. These average rates are only meant to be a guide for custom rates, as actual custom rates charged may vary depending on increases in fuel costs, availability of custom operators, timeliness, field size, etc.
 
Based on the Iowa State data, most average custom rates for tillage, planting, and harvest operations in 2024 were fairly steady compared to the rates for similar operations in 2023. The 2024 custom farming rates for corn and soybean production are also expected to remain steady compared to a year earlier, following an increase of nearly 20 percent in the previous five years. The cost for new and used machinery has stabilized in 2024; however, fuel costs, repair costs, labor charges, and interest rates remain quite high. Any changes in these factors during the year may result in custom operators adjusting their final custom rates by year-end.
 
All listed custom rates in the Iowa Survey results include fuel, labor, repairs, depreciation, insurance, and interest, unless listed as rental rates or otherwise specified. The average price for diesel fuel was assumed to be $3.92 per gallon. A fuel price increase of $.50 per gallon would cause most custom rates to increase by approximately five percent. These average or median rates are only meant to be a guide for custom rates, as actual custom rates charged may vary depending on changes in fuel costs, availability of custom operators, timeliness, field size, etc. There are also many other specific situations among farmers and family members that share farm machinery that could lead to adjustments in final custom rates.
 
Custom Farming Agreements
Some farm operators hire custom work for specific farm operations with another farm operator, such as planting or combining, while other operators hire the typical crop field work through a custom farming agreement. The Iowa State Custom Rate Survey includes the average custom farming rates for corn, soybeans, and small grain. Custom farming agreements usually include tillage, planting, basic weed control, harvesting, and delivering grain to a specified location. Usually, any other additional or necessary farm practices that are performed during the year are paid outside of the custom farming agreement. Many farm operators negotiate these types of custom farming arrangements in the Spring of the year, while others wait until harvest is completed.
 
A good custom farming agreement includes a written contract that specifies the typical cropping practices to be performed and the amount of payment per acre to be paid to the custom operator by the landowner, and all other pertinent details for the custom farming arrangement. The average custom farming rates for corn and soybean production for 2024 are listed on the Iowa State Custom Rate Sheet; however, similar to the other custom rates, higher rates may be justified to cover increased costs of fuel, labor, etc. For more details on custom farming agreements, please refer to the Iowa State University “Ag Decision Maker” web site at: https://www.extension.iastate.edu/agdm/crops/html/a3-15.html
 
Calculating Farm Machinery Costs
The University of Minnesota periodically releases a publication titled: “Machinery Cost Estimates”, which was last updated earlier this year. This summary looks at the use-related (operating) cost of farm machinery, as well as the overhead (ownership) costs of the machinery, including fuel, repairs and maintenance, labor, depreciation, interest, insurance, and housing. This publication can help serve as a good guide to estimate the “true cost” of farm machinery ownership. The U of M publication and other resources on farm machinery ownership costs are available at: https://wlazarus.cfans.umn.edu/william-f-lazarus-farm-machinery-management. Another good resource for estimating the costs of farm machinery ownership is a publication from Iowa State University titled: “Estimating Farm Machinery Costs”, which includes a worksheet to calculate farm machinery costs. This publication is available at: https://www.extension.iastate.edu/agdm/crops/html/a3-29.html
Note - For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions
Phone - (507) 381-7960; E-mail - [email protected]