Many farm operations are coming off the second relatively poor profit year in 2025, especially crop producers in several areas. Some farmers had very small profit levels last year, while other producers had very poor results in 2025. In all cases, most farm operators continue to face very tight profit margins for crop production as we head into 2026. 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 review 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 2025 year-end farm balance sheet (as of 12-31-25 or 1-01-26).
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 12-31-25, 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 2025, as well as potential Farmer Bridge Assistance payments, SDRP payments, etc.
• List of accounts payable as of 12-31-25, listing who the money is owed to, the dollar amount, and when payment will be due. Be sure to include any items listed as current assets where payment is still due, as well as final 2025 land rental payments that were still due as 12-31-25.
• List of 2026 prepaid expenses for both crops and livestock as of 12-31-25, 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 12-31-25. 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. 
• Marketing Assistance Loans (MAL’s) on 2025 grain that were taken prior to 1-01-26, listing the bushel amount, MAL loan rate, MAL interest rate, MAL loan maturity date, and sales plans for MAL 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 2025. Farm machinery values should be adjusted to represent current market values.
• Add any land or other long-term assets that were added in 2025 and adjust asset values as necessary (may want to review this with an ag lender).
• List of all other loans and creditors as of 12-31-25, listing the principal balance, interest rate, payment amount, and payment dates. Be sure to include short-term creditors for crop and livestock inputs, loans with family members, and MAL loans through FSA offices.
 
Prepare a 2025 year-end income and expense statement as of 12-31-25.
The year-end income statement from the previous year should be based on actual sales of grain and livestock during 2025, which will likely include some 2024 inventory that existed at the beginning of the year, as well as any 2025 grain or livestock that was sold during the year. The 2025 expenses would include any accounts payable from the beginning of the year balance sheet that were paid in 2025 and any 2026 prepaid expenses that were paid in 2025, in addition to the other crop and livestock expenses that were paid throughout the year. A preliminary 2025 federal tax return is a good resource to prepare an income statement. 
 
Prepare a budget-to-actual summary for the previous year (as of 12-31-25).
Once the 2025 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 needed for 2026.
 
Prepare a preliminary 2026 budget and cash flow analysis.
Preparing an accurate and complete budget and cash flow analysis for 2026 is a very important part of the loan renewal process and can assist with grain marketing decisions for the 2026 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 2026 production.
• 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 2026, including the contracted or planned price of the inputs and when the expense will be incurred.
• A detailed list of rented farm land for 2026, 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 payment of expenses for the listed 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 2026 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 2026 farm program choice with your ag lender.
• Include any planned changes or adjustments in the farming operation for 2026 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.
• Include likely Farmer Bridge Assistance payments expected for late February, as well as potential “top-up” 2023 and 2024 SDRP payments likely to occur later this year. Potential 2025 PLC or ARC-CO payment estimates for corn, soybeans, or wheat could also be included; however, be sure to use realistic market year average (MYA) price estimates, and make sure that you are using the correct payment calculation formula for accurate projections.  
 
It is best to include all partners and family members that are part of the farm operation with the preparation of relevant financial information and in the renewal process with an ag lender. It is important for all key players to be “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 developing farm business strategies, 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. 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] 

At the end of December, USDA announced the payment rates for the various crops that are included in the “Farmer Bridge Assistance” (FBA) program. A total of $12 billion was allocated for the FBA program to provide economic assistance payments to producers of certain crops to offset low prices and poor profit margins for the 2025 crop year, as well as the market price impacts from tariffs on export markets for certain crops in the past year. Of that total, $11 billion of the payments will be paid to producers of traditional farm program Title I crops, which includes corn, soybeans, wheat, cotton, and rice. The remaining $1 billion will be held back for economic assistance for specialty crop producers.
 
FBA payments will be based on the 2025 planted acres of eligible crops, as reported to local Farm Service Agency (FSA) offices on or before December 19, 2025. Any prevent plant acres in 2025 are not eligible for the FBA payments. The payment amounts for each crop were based on the national average yield times the projected 2025-26 market year average (MYA) price in the December 9, 2025 WASDE report, minus the 2025 average production cost for a commodity, based on USDA Economic Research Service (ERS) data. The MYA prices in the December WASDE report were $4.00 per bushel for corn, $10.50 per bushel for soybeans, and $5.50 per bushel for wheat.
 
Following are the FBA economic assistance payment rates that were announced foe some of the most common crops:

• Corn - $44.36 per acre 
• Soybeans -  $30.88 per acre
• Wheat - $39.35 per acre
• Oats - $81.75 per acre      
• Barley - $20.51 per acre
• Peas - $19.60 per acre
• Sorghum - $48.11 per acre
• Cotton - $117.35 per acre
• Rice - $132.89 per acre
• Peanuts - $55.65per acre

FBA payment rates were also announced for canola, chickpeas, flax, mustard, safflower, sesame, and sunflower. No details have been released on how the $1 billion in specialty crop funds will be allocated.
 
Applications for the FBA program will be made through local Farm Service Agency (FSA) offices. FSA will provide a pre-filled FBA application form to producers that will list the 2025 crop acreage and other pertinent information. Producers will then need verify the information and sign the application form. The pre-filled application forms should be available at FSA offices by the week of February 23. Distribution of the FBA payments is expected to begin by February 28.
 
The payment limit for the FBA payments will be $155,000 per eligible person or legal entity. There will not be higher payment limits based on having 75 percent of taxable income received from farming enterprises, similar to some previous FSA programs. Entities such as corporations, LLC’s, S corporations, and trusts will be limited to one payment limit of $155,000. Any person or legal entity with an adjusted gross income (AGI) exceeding $900,000, based on FSA criteria, will not be eligible to receive any FBA payments.
 
Farmers seeking more information on the “Farmer Bridge Payments” can contact their local FSA office. For more information on the FBA program requirements and payment rates can go to the USDA FBA website at:
https://www.fsa.usda.gov/resources/programs/farmer-bridge-assistance-fba-program
Following are some common questions regarding the Farmer Bridge Assistance (FBA) Payments:
Why are the FBA payments needed ?
Depending on the final 2025 crop yield, the typical Midwest crop producer probably has a breakeven market price of $4.50 to $5.25 per bushel for the 2025 corn crop to cover all production expenses (not including any profit). The 2025 breakeven price for most farmers is likely $10.50 to $11.50 per bushel for soybeans, and over $6.00 per bushel for wheat. As was mentioned earlier, USDA is currently estimating the 2025-26 MYA prices at $4.00 per bushel for corn, $10.50 per bushel for soybeans, and $5.00 per bushel for wheat, which are all well below breakeven levels for many producers. The USDA Economic Research Service (ERS) is estimating that based on the average crop revenue (est. national average yield x projected MYA price) minus the average 2025 cost of production (farm input and overhead expenses), the average farmer will have the following estimated negative profit margins for 2025:

• Corn - Minus ($169) per acre
• Soybeans - Minus ($114) per acre
• Wheat - Minus ($112) per acre

 
Based on these estimates and the listed FBA payment rates, the FBA payments will cover approximately 26 percent of the estimated shortfall for corn, 27 percent of the estimated shortfall for soybeans, and 35 percent of the estimated shortfall for wheat.
 
Are the payment amounts for the various crops equitable ?
Some Midwest crop producers have questioned the rather high per acre payment amounts for some of the crops typically raised in Southern States, such as FBA payment rates of $132.89 per acre for rice, $117.35 per acre for cotton, and $55.65 per acre for peanuts. Based on the USDA ERS economic data referenced earlier, the estimated 2025 negative profit margins are minus ($379) per acre for cotton, minus ($173) per acre for peanuts, and minus ($154) per acre for rice. Based on these estimates, the FBA payment rates account for approximately 31 percent of the shortfall for cotton and 32 percent of the shortfall for peanuts, which is similar to the percentage for wheat; however, the FBA payment rate for rice would cover about 86 percent of the projected profit margin shortfall. It should be noted that one of the largest negative profit margins per acre in the Upper Midwest in 2025 was on sugar beets, which are not covered by the initial round of FBA payments.
 
It is estimated that $4.3 billion or 39 percent of the $11 billion total for FBA payments will be allocated for corn payments. Other estimated total payment amounts for various commodities include soybeans at just under $2.5 billion (22.5%), wheat at $1.9 billion (17.2%), cotton at $942 million (8.5%), and rice at $368 million (3.3%). The Midwest and Corn Belt States are projected to receive approximately $6.9 billion (64%) in total FBA payments, while Southern and Southwest States are projected to receive about $2.8 billion (26%), with the balance going to California and the Western States, as well as to the Northeastern States.
 
How many acres will be required to reach the $155,000 FBA payment limit ?
Following are examples of the estimated acres required to reach the $155,000 payment limit with various crop mixtures:

• 100% Corn ($44.36/A.)  = 3,494 acre
• 100% Soybeans ($30.88/A.)  = 5,019 acres
• 100% Wheat ($39.35/A.)  = 3,939 acres
• 2/3 Corn; 1/3 Soybeans (ave. $39.86/A.)  = 3,889 acres
• 1/2 Corn; 1/2 Soybeans (ave. $37.62/A.)  = 4,120 acres
• 1/3 Corn; 1/3 Soybeans; 1/3 Wheat (ave. $38.20/A.)  = 4,058 acres

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

We have nearly completed the first year of the second Trump Administration, as well as having new leadership in the U.S. Senate, along with some changes in lead roles on the Congressional Agriculture Committees. In 2025, we saw the passage of a large reconciliation bill, the so-called “One Big Beautiful Bill”, the initiation of several ad-hoc farm program payments, and the lengthy shutdown of the federal government in October and early November. We also had several actions implemented by the Trump Administration in 2025 that had an impact on farmers and the agriculture industry. As we look ahead to 2026, there are many key issues and possible policy initiatives that could potentially affect the agriculture industry. There is not total agreement among ag leaders and members of Congress regarding some of the policy initiatives that are being considered.
The leadership of the U.S. Senate and House of Representatives, as well as 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, is the current leader of the U.S. Senate. Arkansas Senator John Bozeman is the Chair of the U.S. Senate Ag Committee, and Minnesota Senator Amy Klobuchar is in the Democratic leadership role as the Ranking Member on the Ag Committee. Republican Congressman G.T. Thompson from Georgia will continue the Chair the U.S. House Agriculture committee, and Minnesota Second District Congresswoman Angie Craig will likely continue as the lead Democrat on the Ag Committee. There are many other Senators and members of the U.S. House from the Upper Midwest that are seated on key Congressional committees that have an impact on the ag industry.
Following is some perspective on a few of the key agriculture and energy policy issues that may be under consideration during the next session of Congress, or by executive action from the Administration:
· TARIFFS AND TRADE POLICY --- During the first year of his second term, President Trump has shown the willingness to impose large additional tariffs on a variety of goods being imported into the United States from China, Mexico, Canada, and other countries. The administration later eased up on some of those tariffs, especially on certain goods and services used by the ag industry; however, the cost of many farm inputs and expenses increased in 2025 due to impacts that resulted from the added tariffs. Canada, Mexico, and China are the three largest trading partners for U.S. ag exports, including corn, soybeans, ethanol, pork, beef, and dairy products. The “United States-Mexico-Canada” (USMCA) trade agreement negotiated during the first Trump administration will be up for renewal in 2026. Farm groups and ag leaders are also hopeful that the administration can negotiate new trade agreements with other countries, in addition to the China trade deal that was negotiated this past Fall. Expanding U.S. exports is seen as a key component to improving farm profitability for many ag commodities.
· RENEWABLE FUELS AND ENERGY --- Many farm organizations are hoping that the Trump administration and Congress will take a stronger stance on further development of the renewable energy industry in the U.S. through implementation of year-round E-15 fuel blends, development of sustainable aviation fuel (SAF) and other incentives for renewable fuels. 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 the development of SAF as a key growth opportunity for both the ethanol and renewable diesel industries in the future. However, the federal government has been somewhat slow to develop policies, as well as to provide the research and development funding, for the production of SAF fuel. U.S. farmers and the renewable fuel processing plants have remained somewhat confused regarding the policy direction for SAF fuel, along with the research and development of SAF fuel, as well as the overall future for the renewable energy industry in the U.S.
· FARM AND RURAL ECONOMY STRUGGLES CONTINUE --- Profit margins from crop production for many farmers were negative for the third year in a row in 2025, and profit prospects do not appear to be much better for 2026. The continued long-term weak farm profitability could put some farm operations on the brink of financial disaster. Crop production input costs and other farm expenses are expected increase in 2026, while land rental rates are expected to stay at fairly high levels in the coming year. Crop prices for corn, soybeans and wheat have remained below breakeven levels, and remain the lowest levels in the several years. For farm operators that experienced crop losses in either 2024 or 2025 due to weather issues, the financial situation is likely even more severe. Farmers have become quite dependent on short-term ad hoc government payments to offset the negative profit margins. During 2025, most crop producers received Economic Commodity Assistance Program (ECAP) payments, and some farmers also received Supplemental Disaster Relief Program (SDRP) payments for 2024 crop yield losses. Looking ahead to 2026, most crop producers will be receiving the recently announced Farmer Bridge Assistance (FBA) payments in late February, and there will likely be a “top-off” SDRP payment for 2023 and 2024 crop yield losses. There has been no announcement of any disaster assistance for 2025 crop yield reductions.
· IMPLEMENTATION OF THE “ONE BIG BEAUTIFUL ACT” (OBBA) --- The so-called “One Big Beautiful Bill” that Congress passed in 2025 contained many provisions that will improve the “safety net” for many Midwest crop producers, which began with the 2025 crop year. This included enhancements to the reference prices and crop insurance provisions that would normally be addressed in a Farm Bill. Most of the farm “safety net” provisions that were updated in the OBBA have been in place since the 2014 Farm Bill was enacted, and were continued through the 2024 year. The 2018 Farm Bill originally expired on September 30, 2023, and was extended last Fall for a second year in a row, with a new expiration date of September 30, 2026. In addition to the improvements in some crop “safety net” provisions, the OBBA also made some adjustments to the Nutrition Title of the Farm Bill (SNAP program, etc.). However, the OBBA did not address other Farm Bill Titles such as Conservation, Rural Development, Ag Research, or Trade Promotion.
· IMMIGRATION POLICIES --- Both production agriculture and the ag processing industry rely heavily on immigrant labor to maintain an adequate workforce, so actions in many parts of the U.S. by the federal Immigration and Customs Enforcement (ICE) agency has put some segments of the industry on edge in many communities. In the meantime, there has been very little action by either Congress or the Administration to address the workforce shortage that exists in portions of the agriculture industry. What is really needed is the development of an immigration policy that both secures the U.S. border and also allows needed immigration to satisfy labor shortages in some segments of the ag industry.
· IMPLICATIONS OF “MAKE AMERICA HEALTHY AGAIN” (MAHA) --- U.S. Secretary of Health and Human Services (HHS), Robert F. Kennedy, stirred some concern during 2025 with some potential proposals that were in the initial MAHA reports. While many of the recommendations in the report related to the agriculture industry were delayed, many farm and ag industry leaders are wondering what the impacts of MAHA might be in 2026 and beyond. Some of these recommendations could have a major impact on future farm production practices, as well as on the ag processing industry.
These are only a few of the potential ag policy issues that could affect farm families and rural businesses in 2026. There are also issues such as family health care access and costs, infrastructure needs in rural areas, assistance for beginning farmers, and other issues affecting rural families and communities. It will be interesting if Congress or the Administration addresses any of these issues in the coming year, which will feature the important nationwide Midterm Elections in November, 2026.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- [email protected]
​

Tariffs and the China Trade Deal
If there was a “2025 word of the year” in agriculture it would probably be “tariff”. A tariff is typically a tax paid at the border on products that are being imported from another country. This could be for products that are sold directly to consumers or manufacturing companies, or are products that are processed into other products for sale. Generally, the added cost of the tariffs gets added on to prices that businesses or consumers pay for the end products, or it increases the cost of materials and inputs for manufacturers and farmers. Tariffs placed by other countries on products being exported from the United States increases the cost of those products by purchasers in the foreign countries; however, it does not usually change the original price that the farmer or producer of the product receives. If foreign tariffs are too high, it can discourage foreign buyers from purchasing U.S. products.
Earlier this year, President Trump announced increased tariffs on a variety of goods being imported into the U.S. from Canada, Mexico, and China; however, those added tariffs have been reduced or delayed on some products, following some trade concessions by the three countries. Three of the primary U.S. agriculture export products that could be impacted by retaliatory tariffs are soybeans, corn, and pork. This means that a potential trade war with China, Mexico, Canada, and other countries involving retaliatory tariffs on U.S. ag products could have major impact on farmers and the ag industry in the Midwest, where most of these products are raised. In recent years, slightly over 40 percent of U.S. soybeans have been exported, along with about 20 percent of the corn and 25 percent pork produced in the U.S.
After months of uncertainty, a new U.S. trade deal with China announced in late October provided some stability and certainty to the soybean market. Soybean market prices had struggled for most of 2025 due to a lack of soybean export sales commitments to China and other countries, as well as a fairly large 2025 U.S. soybean crop being projected by USDA. China committed to purchase 12 million metric tons, or 441 million bushels, of U.S. soybeans in the current 2025-26 marketing year, as well as a minimum of 918 million bushels annually for the following three years. The proposed three-year Chinese soybean purchases would bring the export level of nearly back to the 2023-24 U.S. soybean exports to China of 992 million bushels. USDA also announced commitments of soybean sales totaling of almost 700 million bushels, of U.S. soybeans to other countries in the coming year, mainly to countries from southeast Asia.
 
Low grain prices and tight profit margins in 2025
For the third year in a row, most Midwest crop producers struggled with low grain prices and poor profit margins. The 2025 “new crop” corn prices in the upper Midwest have not offered many marketing opportunities during the entire year. The “new crop” corn prices in Southern Minnesota started the year near $4.10 per bushel and spent much the first six months between $4.00 and $4.25 per bushel. Since mid-Summer, local corn prices have remained below $4,00 per bushel at most local grain markets, with basis levels near $.50 per bushel below Chicago Board of Trade (CBOT) prices. Basis levels in North and South Dakota, as well as in western Minnesota, have been wider yet, resulting in even lower local corn price levels. Many crop producers likely had corn breakeven costs of $4.75-$5.25 per bushel for the 2025 crop year at average corn yields on cash rented land. As a result, most farmers have not able to “lock-in” a forward price at a profitable level on their 2025 corn crop. USDA is currently estimating an average “on-farm” corn price of $4.00 per bushel for the 2025-26 marketing year, which ends on August 31, 2026.
The 2025 “new crop” soybean price in southern Minnesota started the year near $9.50 per bushel, and spent most of the year between $9.25 to $9.75 per bushel, until late October. Soybean prices have improved by about $1.00 per bushel following the announcement of the new trade agreement with China, but have declined again by early December. Some farmers were not able to benefit from the improved soybean prices, as a result of having already sold their 2025 soybean crop following harvest for needed cash flow purposes. The 2025 cost of production for soybeans on cash rented land is likely near $10.75 to $11.50 per bushel at average yields for many producers. USDA is currently estimating an average “on-farm” soybean price of $10.50 per bushel for the 2025-26 marketing year; however, local soybean prices in many portions of the Upper Midwest have trailed that level in the past few weeks.
 
High Level of ad-hoc government farm program payments in 2025
Government farm program payments played a significant role in cash receipt levels for many crop producers in 2025. USDA estimates that approximately $40.5 billion in direct government payments will be paid to farmers in 2025, which would be an increase of 300 percent from $9.6 billion in 2024. The 2025 estimated government payments would represent nearly 25 percent of the projected total U.S. net farm income for the year. The 2025 payment level would be the second highest level in the past few decades, trailing only the $46 billion that was paid out in 2020. The large federal government farm program payments in 2025 were the result of one-time 2024 economic assistance (ECAP) payments, 2023 and 2024 disaster assistance (SDRP) payments, and large 2024 regular farm program payments (ARC-CO) for corn and soybeans in some areas due to very low crop yields in 2024. There were also the regular CRP, dairy margin coverage, and other traditional government payments that some farmers received. Recently, USDA announced an additional $12 billion in payments that will be allocated through the “Farmer Bridge assistance” program to offset low profit margins for crop production in 2025.
 
Passage of the “One Big Beautiful Bill”
The so-called “One Big Beautiful Bill” that Congress passed this past Summer contained some provisions that will enhance the “safety net” for many Midwest crop producers, beginning with the current 2025 crop year. This included updates to many of the reference price and crop insurance provisions that are normally addressed when a new Farm Bill is written. Most of the farm “safety net” provisions that were updated in the legislation have been in place since the 2014 Farm Bill and were continued in the 2018 Farm Bill until this year. For 2025 and the next five years, the statutory or minimum reference prices that determine potential farm program payments were increased from $3.70 to $4.10 per bushel for corn, from $8.40 to $10.00 per bushel for soybeans, and from $5.50 to $6.35 per bushel for wheat, with the ability to be increased on a year-to-year basis. For the 2025 and 2026 crop years, the reference prices are $4.42 per bushel for corn, $10.71 per bushel for soybeans, and $6.35 per bushel for wheat. For the current 2025 crop year only, eligible producers will receive the higher of any potential PLC or ARC-CO payments, regardless of which program they were enrolled in. Any potential payments will be paid in October, 2026.
                   
Record beef cattle prices in 2025
From a profitability standpoint, 2025 was more kind to livestock producers than it was to crop producers. Together with the large level of government farm program payments in 2025, the total cash receipts from livestock production in 2025 was largely responsible for the improved 2025 overall U.S. farm income projections released by USDA. Total 2025 livestock receipts in the U.S. are estimated at near $239.8 billion and are expected to increase by $30.6 billion or 11.2 percent from a year earlier. Receipts from cattle sales in 2025 showed the largest increase, with total receipts expected to increase by $17.5 billion or 16 percent, compared to a year earlier, reflecting the record cattle prices this year. Other 2025 increases in cash receipts compared to 2024 included hogs with an increase of $2.6 billion or 9.5 percent, turkeys at $1.1 billion, and chicken and eggs at $10 billion. Receipts from milk and dairy products is expected to decline slightly in 2025 compared to a year earlier.
 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group
Phone - (507) 381-7960; E-mail - [email protected] 

On December 8, U.S. Secretary of Agriculture Brooke Rollins announced that $12 billion will be made available for the initiation of the long anticipated “Farmer Bridge Assistance” (FBA) program. The FBA program will provide economic assistance payments to producers of certain crops to offset low prices and poor profit margins for the 2025 crop year, as well as the market price impacts from tariffs on export markets for certain crops in the past year. Full details of the FBA payment calculations have not yet been announced by USDA; however, it appears that many aspects of the FBA payments will be very similar to the Economic Community Assistance Program (ECAP) that was implemented earlier this year for losses from the 2024 crop year. 
Following is a brief summary of some of the known details and potential calculations for the likely FBA 
economic assistance payments: 
• Eligible commodities - Of the $12 billion in total, $11 billion of the payments will be paid to the traditional farm program commodities, which includes corn, soybeans, wheat, grain sorghum, barley, oats, cotton, dry peas, large chickpeas, peanuts, rice small chickpeas, and other oilseeds. The remaining $1 billion will be held back for economic assistance for specialty crop producers. No details have been released on how the specialty crop funds will be allocated. 
• Eligible acres - FBA payments will be based on the 2025 planted acres of eligible crops, as reported to local Farm Service Agency (FSA) offices. Farmers that have not reported their 2025 crop acres to their FSA office need to do so by December 19 in order to be eligible for the FBA payments. 
• Payment timing - The specific payment details, including the payment levels for each crop, will be announced by late December of 2025, with program enrollment at FSA offices to follow. The FBA payments are expected to be distributed by late February of 2026. 
• Payment formula - The exact payment formula has not been announced; however, it was stated that the FBA payments will be calculated using a uniform formula that is based on 2025 planted acres of eligible crops. This sounds very similar to the formula for the ECAP payments, which was based on 2024 planted acres. ECAP payments were calculated by taking the projected revenue, which was the 10-year average yield times the projected 2024-25 market year average (MYA) price in the December WASDE report, minus the 2024 average production cost for a commodity, based on USDA Economic Research Service (ERS) data. The recent WASDE Report on December 9 listed the 2025 expected MYA prices at $4.00/bu. for corn ($4.10/bu. In 2024); $10.50/bu. for soybeans ($10.20/bu. In 2024); and $5.50/bu. for wheat ($5.60/bu. In 2024). The maximum ECAP payments for 2024 were $42.91 per acre for corn, $29.86 per acre for soybeans, and $30.69 per acre for wheat. Some analysts expect the 2025 FBA payments to be slightly higher than those levels. 
• Payment limits - The payment limit for the FBA payments will be $155,000 per eligible person or entity. There will not be higher payment limits based on having 75 percent of taxable income received from farming enterprises. 
Many farmers and ag lenders are currently beginning their crop budgets and cash flow planning for the 2026 crop year, and as a result are wondering what level of FBA payments to safely include as estimated income in 2026. While we will not know the exact FBA payment formula until late December, it appears that a safe FBA payment estimate for crop producers with corn, soybean, and wheat acres is probably near $25 to $30 per acre for acres planted to those crops in 2025. Farmers seeking more information on the “Farmer Bridge Payments” can contact their local FSA office. Any updates on the FBA requirements or payment rates will likely be announced on the USDA FSA website at: https://www.fsa.usda.gov/ 

Very Little Change In The December WASDE Report 
The monthly USDA WASDE report released on December 9 offered very few changes from the November WASDE report. The biggest change was a projected increase in corn export levels for the 2025-26 marketing year, which continues until August 31, 2026, along with a corresponding reduction in the estimated corn ending stocks for the year. There was no change from the November report in the 2025 corn and soybean production estimates, or in the soybean export and carryover levels for 2025-26. Overall, there was very little reaction to corn and soybean market prices on the Chicago Board of Trade (CBOT) following the release of the WASDE report. 
The December WASDE report maintained the 2025 national average corn yield of 186 bushels per acre and the 2025 U.S. harvested corn acreage of 90 million acres, resulting in an estimated record total U.S. corn production of 16.75 billion bushels for 2025. This compares to 14.89 billion bushels in 2024, the previous record of 15.34 billion bushels in 2023, and just under 13.7 billion bushels in 2022. Total corn usage for the 2025-26 marketing year is now estimated at 16.28 billion bushels, which is up 7.5 percent from 15.14 billion bushels in 2024-25. USDA is now projecting an increase of 342 million bushels in corn exports in 2025-26 compared to a year earlier, along with slight increases in the amount of corn used for feed and ethanol in the current marketing year, 
USDA updated the estimated 2025-2026 U.S. corn ending stocks to just under 2.03 billion bushels, which was lowered by 125 million bushels from the November estimate. This is still an increase of 32 percent from the carryover level of 1.53 billion bushels in 2024-25, and compares to 1.76 billion bushels in 2023-24, and 1.36 billion bushels in 2022-23. Based on current estimates, the corn stocks-to-use ratio would be at 12.5 percent for 2025-26, which compares to previous levels of 10.1 percent for 2024-25, 11.8 percent for 2023-24, and 9.9 percent for 2022-23. The continued higher level of corn supply could keep local basis levels fairly wide for future corn marketing opportunities in many portions of the Midwest. 
Even with the higher export projection, USDA left the estimated the U.S average on-farm cash corn price for the 2025-2026 marketing year at $4.00 per bushel, which was the same as the November report. The USDA marketing year average price estimate is the expected average farm-level price for the 2025 crop year from September 1, 2025, to August 31, 2026; however, this does not represent estimated prices for either the 2025 or 2026 calendar year. The projected 2025-26 average corn price of $4.00 per bushel would be the lowest since the 2019-20 price of $3.56 per bushel, and compares to other recent final average corn prices of $4.24 per bushel in 2024-25, $4.55 per bushel in 2023-24, and $6.54 per bushel in 2022-23. 
Total U.S. soybean production for 2025 is estimated at just over 4.25 billion bushels, which was the same as the November estimate. The anticipated production is based on harvested soybean acreage of 80.3 million acres and a final yield of 53 bushels per acre. Total soybean demand for 2025-26 is projected at 4.3 billion bushels, which represents a decrease from the usage level of just under 4.43 billion bushels in 2024-25. The projected soybean export level for 2025-26 is 1.63 billion bushels, which would be a decline of 240 million bushels compared to a year earlier. Interestingly, there was no change in projected total soybean exports from the November WASDE report, even with the recent China trade deal that detailed potential soybean exports in the coming year. 
The U.S. soybean ending stocks for 2025-26 are estimated at 290 million bushels, which was unchanged from the November WASDE report. This compares to recent soybean carryout levels of 316 million bushels in 2024-25, 342 million bushels in 2023-24, and 264 million bushels in 2022-23. The projected 2025-26 carryout level is still well below the very high ending stocks of 523 million bushels in 2019-20 and 913 million bushels in 2018-19. The soybean stocks-to-use ratio for 2025-26 is estimated at 6.7 percent, which is down from a ratio of 7.1 percent in 2024-25 and 7.3 percent in 2023-24, and is far lower than the ratio of 23 percent in 2018-19. The projected U.S. average farm-level soybean price for the 2025-26 marketing year is $10.50 per bushel, which is the same as the November estimate. The projected 2025-26 average price compares to recent price levels of $10.00 per bushel on 2024-25, $12.40 per bushel in 2023-24, and $14.20 per bushel in 2022-23. 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- [email protected]

USDA initiated sign-up for “Stage 2” of the Supplemental Disaster Relief Program (SDRP) at local Farm Service Agency (FSA) offices on November 24, with sign-up to continue until April 30, 2026; however, there are still a lot of questions about SDRP Stage 2. The sign-up process for Stage 2 of the SDRP program is a bit more complicated than the fairly straight forward sign-up process in Stage 1. Similar to Stage 1, SDRP Stage 2 will cover losses from eligible crops for both the 2023 and 2024 crop years. The crop losses will be calculated separately for each year, so eligible producers could receive a payment for each year. Also similar to Stage 1 of the SDRP program, to qualify for Stage 2 farmers must have incurred a loss from a qualifying disaster event in 2023 or 2024. Qualifying disasters include floods, wildfires, hurricanes, freezes, excessive moisture, heat, or a qualifying drought.
The application process for potential Stage 2 SDRP payments will require farmers to apply in person at local FSA offices. The SDRP Stage 2 application process for those with “shallow losses” will be relatively easy, using pre-filled RMA crop insurance or NAP data on the application form at their FSA office. They will then just need to designate the type of disaster that caused the crop loss, verify the data, and sign the form to initiate SDRP payments. SDRP applications must be signed by all parties that share in the crop value. The sign-up process for “uncovered crop losses” and “quality losses” under “Stage 2” of SDRP may be a bit more complicated, as it will require the utilization of alternate criteria other than RMA and NAP yield data.
Following are some common questions that have been received regarding the Stage 2 SDRP payments:
 
What Is The Primary Focus Of Potential SDRP Stage 2 Payments?
Stage 2 of the SDRP program includes assistance for losses from uncovered crop losses, shallow crop losses, and crop quality losses. Here are more specific details on the types of losses that are covered by Stage 2 SDRP:
• Shallow crop losses - This would be for 2023 and 2024 crop losses that did not meet the threshold requirements for Stage 1 SDRP payments. The type of eligible losses and the payment formulas and calculations are different from calculations for Stage 1 payments. The calculations will be based off 2023 and 2024 Risk Management Agency (RMA) crop insurance data or NAP data. This is the category that most eligible Midwest corn, soybean, and wheat producers will fall under.
• Uncovered crop losses - This category will provide Stage 2 SDRP assistance for eligible crops that are not covered by federal crop insurance or the NAP program. Crop losses in this category will be factored to 70 percent of the intended revenue for a crop, compared to 75-95 percent for insured crops. This could include certain fruit and vegetable crops, tree farms, etc.
• Quality Losses - This would cover losses that resulted in quality discounts in a crop that were not covered by crop insurance, such as may have occurred from severe storms and flooding. Forage crops that had reduced nutritional value may also be eligible under Stage 2 of SDRP.
 
What Are Some Indicators That A Farmer Is Likely To Qualify For A “Shallow Loss” Stage 2 SDRP Payment?
To qualify for a “shallow loss”, farmers with 80% or 85% crop insurance policy for 2023 or 2024 would need to have at least a 5 percent yield reduction below their APH yield, but likely above the threshold yield where crop insurance would have been initiated for a given crop in either year. For example, a producer that had an 80% insurance policy on corn in 2023, with a final yield above 80 percent of the APH yield, but below 95 percent of the APH yield, might be eligible for a Stage 2 SDRP payment. If that producer had 70% insurance coverage in 2023, then the Stage 2 payment eligibility would occur above 70 percent of the APH yield, but below 90 percent of the APH yield, so producers would need a 10 percent yield reduction below the APH yield. Producers that already received a Stage 1 SDRP payment on a particular crop on a farm unit in a given year are not eligible to receive a Stage 2 SDRP payment on the same crop and same farm. The payment formulas for Stage 1 and Stage 2 SDRP payments are different, which make these calculations harder to analyze
 
What Are Some Situations Where Farmers That Were Not Eligible For A Stage 1 SDRP Payment Might Be Eligible For A Stage 2 Payment?
• A farmer that received a Stage 1 payment for corn in 2024, but also had a shallow loss on corn in 2023. That farmer could now be eligible to apply for a Stage 2 SDRP payment for corn in 2023.
• A farmer that received a 2024 Stage 1 payment for corn, but also had a shallow loss on soybeans in 2024. That farmer could now be eligible to apply for a Stage 2 SDRP payment for soybeans.
• A farmer has three different farm units and received Stage 1 SDRP payments on two farms, but had a shallow loss on the third farm. That farmer could now be eligible to apply for Stage 2 on the third farm.
 
Will the Stage 2 SDRP Payments Be Factored By 35 Percent?
Similar to Stage 1, the initial Stage 2 payments will be paid at a rate of 35 percent (.35) of the total calculated SDRP payment amount. For example, if the calculated Stage 2 SDRP payment is $100 per acre, the initial SDRP payment amount would be $35 per acre.
 
What Are The Payment Limits For The SDRP Payments?
The payment limit for total SDRP payments is $125,000 per eligible individual or entity. This increases to $250,000 if at least 75 percent of the reported adjusted gross income is derived from eligible farm-related operations, based on a 3-year average on Federal tax returns. There are also potential higher payment limits for certain specialty crops. Any SDRP payments received from both Stage 1 and Stage 2 of the program for the same year will be added together for payment limit purposes. There will be a separate payment limit for the 2023 and 2024 crop years.
 
If I Am Eligible For A Stage 2 SDRP Payment, Do I Need To Receive That Payment In 2025?
The Stage 2 SDRP payments will be processed after the application has been received and reviewed by the FSA office. The easiest way to receive the SDRP payment in 2026 is the wait until January 2 or later to apply for the program. Remember, the deadline for Stage 2 SDRP application is April 30, 2026.
 
Could There Be An Additional SDRP Payments Beyond The Initial 35 Percent Payment Rate?
Once all the payments for SDRP Stage 1 and Stage 2 have been calculated, there could possibly be an additional “top-up” payment. The additional round of SDRP payments would occur if the total Stage 1 and Stage 2 SDRP payment amount in the U.S. is lower than the $16 billion originally allocated for the program. Most analysts feel that it is highly likely that we could see an additional “top-up” SDRP payment after April 30, 2026; however, that payment will likely be at a lower percentage than the initial Stage 1 and Stage 2 SDRP payment percentage of 35%.
 
Where Can Farmers Get More Assistance With The Stage 2 SDRP Payments And Application Process?
• USDA has an excellent SDRP website on potential SDRP payments and the application procedures at: https://www.fsa.usda.gov/resources/programs/supplemental-disaster-relief-program-sdrp.
• Kent Thiesse has prepared a SDRP Stage 2 information sheet, which includes SDRP Stage 2 payment examples for corn and soybeans for 2023 and 2024. To receive a free copy of the information sheet, send a request email to: [email protected]
• Farmers with additional questions on the Stage 2 SDRP payments should contact their local FSA office.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone - (507) 381-7960; E-mail - [email protected]

Profit levels from crop farming across the Midwest will likely be highly variable in 2025, depending on final crop yields, grain marketing decisions, and crop expenses. There were very few opportunities to market corn and soybeans at profitable prices during 2025, and sugar beet producers had one of their worst profit years in dec-ades. Added government farm program payments provided some additional farm income in 2025; however, this did not offset the negative profit margins that many crop farmers have faced. Diversified farm operations that include livestock enterprises, especially beef cattle, have been able to better withstand the financial challenges in crop production. 
According to economic analysis from the American Farm Bureau Federation (AFBF) for corn production in 2025, the average farmer would lose over $150 per acre at the estimated national average corn yield of 186 bushels per acre and the projected USDA 2025 market year average (MYA) price of $4.00 per bushel, excluding any traditional or added farm program payments. Based AFBF estimates, the calculated loss for soybeans in 2025 is over $80 per acre, based on the estimated national average soybean yield of 52 bushels per acre and the projected 2025 MYA price of $10.50 per bushel. Sugar beet industry experts are projecting losses of $150-$200 per acre for many sugar beet growers in Minnesota and North Dakota. 
Following is a brief overview of how some of the major factors will likely affect final farm profitability in 2025: 
· 2025 CROP YIELDS 
The reported 2025 corn and soybean yields in most areas of the Upper Midwest were highly variable. This was mainly due to excessive rainfall in some locations early in the growing season and limited rainfall late in some portions of the region later in the year, as well as a significant amount of late-season disease pressure in many areas. Even with that variability, USDA is projecting a record U.S. average corn yield of 186 bushels per acre in 2025, based on the USDA Crop Production Report re-leased on November 14. This surpasses the previous record average corn yield of 179.3 bushels per acre in 2023. USDA is also projecting a record national average U.S. soybean yield of 53 bushels per acre in 2025, which surpasses the previous record yield of 52.0 bushels per acre in 2016. 
Iowa, Illinois, Indiana, South Dakota, and Wisconsin were all projected to have record average corn yields in 2025, while anticipated corn yields in Minnesota and Ne-braska were just shy of previous record levels. Many farmers in Southern Minnesota and Eastern South Dakota reported some of their best corn yields ever in 2025. Disease pressure from tar spot, southern rust, and other corn diseases limited corn yields for some producers in the central and eastern Corn Belt. Some analysts feel that USDA may lower the 2025 average corn yields in some States in future months, due to the severe yield impacts from these diseases. Soybean yields across the Midwest were quite variable in many areas due to weather issues, as well as some disease pressure. 
· HIGH INPUT COSTS 
Total U.S. farm expenses are estimated at $467.5 billion in 2025, which is an increase $11.9 billion or 2.6 percent from 2024. This follows an increase of $16.7 billion in 2024 as compared to a year earlier. Most 2025 farm expenses for crop inputs, land rent, and operating interest were fairly stable with 2024 expense levels; however, these basic farm expenses are significantly higher than a few years earlier. There have been significant increases in farm expense levels for farm machinery, repairs, supplies, and farm labor in the past couple of years. The continued higher level of crop input costs, together with lower commodity prices, points to the negative profit margins facing crop producers in 2025. It appears that the crop input expense for fertilizer could be considerably higher for the 2026 crop year, along with modest in-creases in seed and chemical costs next year as well. 
· LACK OF GRAIN MARKETING OPPORTUNITIES 
The “new crop” 2025 corn prices in the upper Midwest have not offered many marketing opportunities, with very little movement during the year. The 2025 “new crop” corn prices in Southern Minnesota started the year near $4.10 per bushel and spent much the first six months between $4.00 and $4.25 per bushel, never top-ping $4.40 per bushel. Since early July, local corn prices have remained below $4,00 per bushel at most local grain markets, with local basis levels near $.50 per bush-el below Chicago Board of Trade (CBOT) prices, which is at the widest level in recent years. Basis levels in North and South Dakota, as well as in western Minnesota, have been wider yet, resulting in even lower local corn price levels. Many crop producers likely had corn breakeven costs of $4.75-$5.25 per bushel for the 2025 crop year at average corn yields on cash rented land. As a result, most farmers have not able to “lock-in” a forward price at a profitable level on their 2025 corn crop. USDA is currently estimating an average “on-farm” corn price of $4.00 per bushel for the 2025-26 marketing year, which ends on August 31, 2026. 
The 2025 “new crop” soybean price in southern Minnesota started the year near $9.50 per bushel, and spent most of the year between $9.25 to $9.75 per bushel, until late October. Soybean prices have improved by $.75 to $1.00 per bushel since late October following the announcement of the new trade agreement with China. How-ever, some farmers were not able to benefit from the improved soybean prices, as a result of having already sold their 2025 soybean crop following harvest for needed cash flow purposes or due to a lack of grain storage. The 2025 cost of production for soybeans on cash rented land is likely near $10.75 to $11.50 per bushel at average yields for many producers. USDA is currently estimating an average “on-farm” soybean price of $10.50 per bushel for the 2025-26 marketing year; however, local soybean prices in many portions of the Upper Midwest have trailed that level in the past few weeks. 
· ADDITIONAL FARM PROGRAM PAYMENTS 
Government farm program payments will play a significant role in cash receipt levels for many crop producers in 2025. USDA estimates that approximately $40.5 bil-lion in direct government payments will be paid to farmers in 2025, which would be an increase of 300 percent from $9.6 billion in 2024. The 2025 government farm payments would represent nearly 25 percent of the projected total U.S. net farm income for the year. The 2025 payment level would be the second highest level in the past few decades, trailing only the $46 billion that was paid out in 2020, resulting from large ad hoc support payments due to COVID and the first China trade war in 2018 and 2019 The large federal government farm program payments in 2025 were the result of one-time 2024 economic assistance (ECAP) payments, 2023 and 2024 disaster assistance (SDRP) payments, and large 2024 regular farm program payments (ARC-CO) for corn and soybeans in some areas due to very low crop yields in 2024. There were also the regular CRP, dairy margin coverage, and other traditional government payments that some farmers received. The projected gov-ernment payments did not include 2025 crop insurance indemnity payments; however, those payments will likely be much lower for most farmers in 2025 due to re-duced guarantees and improved crop yields. 
BOTTOM LINE 
It is likely that many corn and soybean producers will have negative profit margins in 2025, even some farmers that had above average crop yields this year. Producers with below average crop yields in 2025 will likely have very poor profit levels for the year, depending on their crop insurance coverage. As usual, there will be a wide variation in farm profitability, not only as the result of the crop yields, but also based on crop and farm expense levels, grain marketing decisions, and the amount of farm debt that needs to be serviced. 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. The very tight or negative profit margins from crop production in 2025 reinforces the need for additional financial assistance for crop producers from the federal government in the coming months. 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- [email protected]

USDA initiated sign-up for Stage 2 the Supplemental Disaster Relief Program (SDRP) at local Farm Service Agency (FSA) offices on November 24. The sign-up period will continue until April 30, 2026. Stage 1 of the SDRP program began on July 10, 2025, and many farmers that were eligible for Stage 1 have already signed up and have received their SDRP payment. A total of just over 16 billion dollars was allocated by Congress for the SDRP program. As of November 21, a total of just over $5.7 billion has been paid out under Stage 1 of the program, with over 381,000 farmers in the U.S. receiving benefits. Thus far, farmers in Minnesota have received the highest amount of Stage 1 payments, with a total of just $667 million going to over 36,000 farmers. Iowa farmers have received just under $539 million in SDRP payments going to nearly 38,000 farmers.
“Stage 1” of SDRP focused on farmers with crops in 2023 and 2024 that had a federal crop insurance policy in place, or had crops that were enrolled in the Noninsured Disaster Assistance Program (NAP) in 2023 and 2024. To qualify for “Stage 1”, farmers had to receive a crop insurance indemnity payment or a NAP payment tied to a qualifying disaster in 2023 or 2024. Qualifying disasters include floods, wildfires, hurricanes, freezes, excessive moisture, heat, and qualifying drought. Eligibility for drought losses was restricted to counties that experienced a drought level of “D3” or higher at in 2023 or 2024, or in counties that were at a “D2” drought level for eight or more consecutive weeks, based on the weekly U.S. Drought Monitor. A county needed to be listed as eligible for the SDRP due to drought, in order for individual farmers to qualify for SDRP payments due to drought.
“Stage 2” of the SDRP program includes assistance for losses from uncovered crop losses, shallow crop losses, and crop quality losses. Here are more specific details on the types of losses that are covered by “Stage 2” SDRP:
• Shallow crop losses - This would be for 2023 and 2024 crop losses that did not meet the threshold requirements for Stage 1 SDRP payments. The type of eligible losses and the payment formulas and calculations will be very similar to Stage 1 of SDRP. The calculations will be based off 2023 and 2024 Risk Management Agency (RMA) crop insurance data or NAP data. This is the category that most Midwest corn, soybean, and wheat producers will fall under.
• Uncovered crop losses - This category will provide Stage 2 SDRP assistance for eligible crops that are not covered by federal crop insurance or the NAP program. Crop losses in this category will be factored to 70 percent of the intended revenue for a crop, compared to 75-90 percent for insured crops. This could include certain fruit and vegetable crops, tree farms, etc.
• Quality Losses - This would cover losses that resulted in quality discounts in a crop that were not covered by crop insurance, such as may have occurred from flooding. Forage crops that had reduced nutritional value may also be eligible under Stage 2 of SDRP. Farmers should check with their local FSA office for potential eligibility of quality losses.
The application process for “Stage 2” SDRP losses will require farmers to apply at their local FSA office. The application process for those with “shallow losses” will be very similar to the relatively easy sign-up process for “Stage 1” payments, using a pre-filled “Stage 2” SDRP application at their FSA office with the 2023 or 2024 crop insurance (RMA) or NAP yield data already entered. They will then just need to designate the type of disaster that caused the crop loss, verify the data, and sign the form to initiate SDRP payments. SDRP applications must be signed by all parties that share in the crop value. Farmers will need to report any discrepancies in the data to both the FSA office and their crop insurance agent. Farmers will also need to have all other required FSA forms on file at their local FSA office, which are typically already on file if the farmer regularly receives government farm program payments. The sign-up process for “uncovered crop losses” and “quality losses” under “Stage 2” of SDRP may be a bit more complicated, as it will require the utilization of alternate criteria other than RMA and NAP yield data.
Eligible “shallow loss” Stage 2 SDRP payments occur in situations where there was a documented loss of at least 5 percent below the federal crop insurance crop revenue (APH yield x the 2023 or 2024 Spring price), and the final revenue (final 2023 or 2024 crop yield x the harvest price) was above the threshold (60-85 percent of the crop insurance revenue) to receive a crop insurance indemnity payment for 2023 or 2024. For example, a 2023 or 2024 75% revenue protection (RP) crop insurance policy on corn that had a final revenue between 75-95 percent would result in eligibility for a Stage 2 SDRP payment. If that producer had carried 85% RP insurance coverage, then the Stage 2 payment eligibility would occur at 85-95 percent of the original crop insurance revenue for the year.
SDRP will cover losses from eligible crops for both the 2023 and 2024 crop years. The crop losses will be calculated separately for each year, so eligible producers could receive a payment for each year. Producers are not eligible to receive a Stage 1 SDRP payment and a Stage 2 payment on the same crop on the same farm unit in a given year. However, following are situations where farmers that were not eligible for a Stage 1 SDRP payment might be eligible for a Stage 2 payment:
• A farmer received a Stage 1 payment for corn in 2024; however, had a shallow loss on corn in 2023. That farmer is now eligible for a Stage 2 SDRP payment for corn in 2023.
• A farmer received a 2024 Stage 1 payment for corn; however, he had a shallow loss on soybeans in 2024. That farmer is now eligible for a Stage 2 SDRP payment for soybeans.
• A farmer has three different farm units and received Stage 1 SDRP payments on two farm units’ however, had a shallow loss on the third farm. That farmer is now eligible for a Stage 2 payment on the third farm.
Similar to Stage 1, the initial Stage 2 payments will be paid at a rate of 35 percent of the total calculated SDRP payment amount. Once all the payments for Stage 1 and Stage 2 in the U.S. have been calculated, after April 30, 2026. The additional round of SDRP payments would occur if the total Stage 1 and Stage 2 SDRP payment amount in the U.S. is lower than $6 billion. Most analysts feel that it is highly likely that we could see an additional “top-up” SDRP payment after April 30, 2026; however, that payment will likely be at a lower percentage than the initial Stage 1 and Stage 2 SDRP payment percentage (35%).
Standard FSA payment limits will apply to all SDRP payments. The payment limit for SDRP payments is $125,000 per eligible individual or entity; however, the payment limit increases to $250,000 if at least 75 percent of the reported gross income on the tax returns are derived from eligible farm-related operations. There is potential for even higher payment limits for certain specialty crops. There will be a separate payment limit for both 2023 and 2024. Farmers that receive SDRP payments will be required to maintain at least 60 percent federal crop insurance coverage for at least the next two years. Failure to comply with this requirement would require full repayment of the SDRP payment plus interest.
Any farmers with questions or needing clarifications on Stage 2 SDRP payments should contact their local FSA office for more information. The SDRP payments are certainly helpful to farmers that have faced financial hardship following significant crop loss in 2023 and 2024 due to drought and other natural disasters. It should be pointed out that the 35 percent payment factor only accounts for a small portion of the losses that were incurred by the farmers that were affected. These SDRP payments also do not account for the continued low commodity prices and poor profit margins that farmers are incurring with the 2025 crop and will likely face in the 2026 crop year.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- [email protected] 

The highly anticipated November USDA World Supply and Demand Estimates (WASDE) Report was released on November 14. This was the first WASDE report to be released since September 12, as there was no monthly WASFE report in October due to the shutdown of the federal government for 43 days that started on October 1. The USDA National Agriculture Statistics Service (NASS) also released the November Crop Production Report on November 14, which included updated 2025 crop yield projections for corn, soybeans, and other crops. This was the first update in U.S. crop yield estimates since the September report. USDA did modestly adjust the expected 2025 corn and soybean yields downward, but not nearly to the reduction levels that many farmers and grain marketing analysts were anticipating. The immediate grain market reaction following the release of the USDA reports was negative on the Chicago Board of Trade (CBOT); however, corn and soybean prices have shown an overall positive trend in recent weeks.
 
 
USDA Slightly Decreases 2025 Corn And Soybean Yield Projections
Based on the USDA Crop Production Report released on November 14, the projected U.S. average corn yield for 2025 will be a record at 186 bushels per acre, surpassing the previous record average yield of 179.3 bushels per acre in 2023. The 2024 estimated average yield also compares to other recent U.S. corn yields of 177.3 in 2023, 173.4 bushels per acre in 2022, 177 bushels per acre in 2021, and 172 bushels per acre in 2020. The estimated U.S. average yield was slightly lowered from the September estimate of 186.7 bushels per acre. This is higher than the average grain trade estimate of 183.5 bushels per acre. A year ago, USDA projected the 2024 U.S. corn yield at 183.1 bushels per acre in the November report; however, it was lowered to final yield of 179.3 bushels per acre in later USDA reports. Some experts feel this scenario may occur again in future months before we arrive at a final 2025 average corn yield.
Minnesota is projected to have a 2025 yield of 193 bushels per acre, compared to 174 bushels per acre in 2024 and just below the record yield of 195 bushels per acre in 2022. Iowa is projected to have a record corn yield of 216 bushels per acre in 2025, compared to 211 bushels per acre in 2024. Other projected state average corn yields for 2025 compared to 2024 yields are Illinois at 221 bushels per acre (record), compared to 217 bushels per acre; Indiana at 206 bushels per acre (record), compared to 198 bushels per acre; Ohio at 194 bushels per acre, compared to 177 bushels per acre; Nebraska at 191 bushels per acre, compared to 188 bushels per acre; Wisconsin at 183 bushels per acre (record), compared to 174 bushels per acre; South Dakota at 173 bushels per acre (record), compared to 164 bushels per acre; and North Dakota at 146 bushels per acre, compared to 149 bushels per acre.
USDA is projecting a record U.S. soybean yield of 53 bushels per acre in 2025, which is a decrease of 0.5 bushels from the September estimate. The projected 2025 average soybean yield compares to recent average yields of 50.7 bushels per acre in 2024, 50.6 bushels per acre in 2023, 49.6 bushels per acre in 2022, 51.4 bushels per acre in 2021,50.2 bushels per acre in 2020, the previous record U.S. soybean yield was 52.0 bushels per acre in 2016.
USDA is estimating the 2025 Minnesota soybean yield at 51 bushels per acre, which is up from 45 bushels per acre in 2024, 48 bushels per acre in 2023 and 50 bushels per acre in 2022, but slightly below than the record yield of 52 bushels per acre in 2016. Iowa is projected to have a 2025 soybean yield of 65 bushels per acre (record), compared to 60 bushels per acre in 2024 and the previous record yield of 63 bushels per acre in 2021. Estimated 2025 soybean yields in other States compared to 2024 yields include Illinois at 65 bushels per acre (record), compared to 64 bushels per acre; Indiana at 59 bushels per acre, same as 2024; Ohio at 53 bushels per acre, compared to 50 bushels per acre; Nebraska at 64 bushels per acre, compared to 57.5 bushels per acre; Wisconsin at 55 bushels per acre, compared to 48 bushels per acre; South Dakota at 48 bushels per acre, compared to 43 bushels per acre; and North Dakota at 34 bushels per acre, compared to 37.5 bushels per acre.
 
 
Highlights From The November WASDE Report
The November WASDE report slightly lowered 2025 corn and soybean production estimates, based on reductions in the expected final U.S. crop yields for 2025, as well as adjusting the 2025-26 beginning grain socks to match the September 30 USDA grain stocks data. There were some adjustments to corn and soybean usage levels from previous reports. Overall, there was minor changes in the projected 2025-26 corn and soybean carryover amount by the end of the current marketing year on August 31, 2026. Futures prices on the CBOT decreased following the WASDE report; however, by Nov. 17 the CBOT futures prices had rebounded quickly.
The November WASDE report included the updated 2025 national average corn yield of 186 bushels per acre and the 2025 U.S. harvested corn acreage of 90 million acres, resulting in an estimated record total U.S. corn production of 16.75 billion bushels for 2025. This compares to 14.89 billion bushels in 2024, the previous record of 15.34 billion bushels in 2023, and just under 13.7 billion bushels in 2022. Total corn usage for the 2025-26 marketing year is now estimated at just over 16.15 billion bushels, which is up 6.7 percent from 15.14 billion bushels in 2024-25. USDA is projecting slight increases in the amount of corn used for feed and ethanol in the current marketing year, along with an increase of 245 million bushels in corn exports compared to a year earlier.
USDA is now estimating 2025-2026 U.S. corn ending stocks at just over 2.15 billion bushels, which was up by 44 million bushels from the September estimate. This compares to previous carryout levels of an estimated 1.53 billion bushels in 2024-25, 1.76 billion bushels in 2023-24, 1.36 billion bushels in 2022-23, and nearly 1.34 billion bushels in 2021-22. Based on current estimates, the U.S. corn stocks-to-use ratio would be at 13.3 percent for 2025-26, which compares to previous levels of 10.1 percent for 2024-25, 11.8 percent for 2023-24, 9.9 percent for 2022-23, and 9.2 percent for 2021-22. The increased level of corn supply could keep local basis levels fairly wide for future corn marketing opportunities in many portions of the Upper Midwest.
Based on the November WASDE report, USDA is currently estimating the U.S average on-farm cash corn price for the 2025-2026 marketing year at $4.00 per bushel, which was up $.10 from the September report. The USDA marketing year average price estimates are the expected average farm-level prices for the 2025 crop year from September 1, 2025, to August 31, 2026; however, this does not represent estimated prices for either the 2025 or 2026 calendar year. The projected 2025-26 national average corn price of $4.00 per bushel would be the lowest since the 2019-20 price of $3.56 per bushel, and compares to final average corn prices of $4.24 per bushel in 2024-25, $4.55 per bushel in 2023-24, and $6.54 per bushel in 2022-23.
Total U.S. soybean production for 2025 is now estimated at just over 4.25 billion bushels, which was reduced slightly from the September estimate. The anticipated production is based on harvested soybean acreage of 80.3 million acres and a final yield of 53 bushels per acre. Total soybean demand for 2025-26 is projected at 4.3 billion bushels, which represents a decrease from the usage level of just under 4.43 billion bushels in 2024-25. The most notable change was a projected reduction of 240 million bushels in soybean export levels compared to a year ago; however, it is not known if the recent China trade deal was factored into these export estimates.
The U.S. soybean ending stocks for 2025-26 are estimated at 290 million bushels, which was a decrease of 10 million bushels from the September WASDE report and compares to recent soybean carryout levels of 316 million bushels in 2024-25, 342 million bushels in 2023-24, and 264 million bushels in 2022-23. The projected 2025-26 carryout level is still below the very high ending stocks of 523 million bushels in 2019-20 and 913 million bushels in 2018-19. The soybean stocks-to-use ratio for 2025-26 is estimated at 6.7 percent, which is down from 7.1 percent in 2024-25 and 7.3 percent in 2023-24, and is far lower than the ratio of 23 percent in 2018-19. USDA raised the projected U.S. average farm-level soybean price for the 2025-26 marketing year to $10.50 per bushel, which was up $.50 per bushel from the September estimate. The projected 2025-26 average price compares to recent price levels of $10.00 per bushel on 2024-25, $12.40 per bushel in 2023-24, $14.20 per bushel in 2022-23, and $13.30 per bushel in 2021-22.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone - (507) 381-7960; E-mail - [email protected]

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 2025, when the cost of machinery operation for diesel fuel, repairs, and labor may have changed from the beginning of the year until year-end. 
Due to the high cost of investment in farm machinery, an ever-increasing number of farm operators are hiring other farm operators to provide some or all of the needed machinery resources for their farm operation. This is especially true with new and younger farm operators, as well as with children that decide to start farming with their parents. In addition, some land investors are choosing to operate a farm themselves rather than cash renting the land to another farm operator, and thus they are hiring a farm operator under a custom farming agreement. 
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, which also includes many miscellaneous farming practices and a formula for calculating rental rates. is probably the most widely used custom rate information that is available in the Upper Midwest. The complete 2025 “Iowa Farm Custom Rate Survey” for all farming practices is available on-line at the following Iowa State University web site: https://www.extension.iastate.edu/agdm/crops/html/a3-10.html 
The custom rate sheet lists an “average” and a “median” custom rate. The “average” is the average of all reported custom rates for a specific faming practice, while the “median” rate means that half of the reported custom rates were higher and half were lower. The average or median 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 or median 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, average custom rates for tillage, planting, and harvest operations in 2025 are about 15-25 percent higher than rates for similar operations 3 or 4 years earlier. The cost for new and used machinery has increased significantly in the past few years, which together with higher expenses for fuel, repairs, labor charges and interest rates, accounts for the increases in the custom rates. Some of these factors may vary during the year, which may result in final custom rates needing to be adjusted at year-end, compared to the negotiated rates prior to the growing season. Good communications between the custom operators and farmers are very important in finalizing fair custom rates. 
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 in the survey was assumed to be $3.66 per gallon; however current prices for diesel fuel may vary from that price. A fuel price increase of $.50 per gallon would cause most custom rates to increase by approximately five percent. These average rates are only meant to be a guide for custom rates, as actual custom rates charged may vary depending on continued increase in fuel costs, availability of custom operators, timeliness, field size, etc. and could be adjusted later in the year due to changes in economic factors. 
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. The average custom farming rates for corn and soybean production in 2025 increased by about 9 percent compared to a year earlier. 
Following are the listed 2025 custom farming rates in the Iowa Custom Rate Survey: 
· Corn production rate -------- Ave. rate = $167.75 per acre; Median rate = $150.00 per acre 
· Soybean production rate --- Ave. rate = $154.50 per acre; Median rate = $140.00 per acre 
Although the concept of a custom farming agreement seems simple, close communication between the custom operator and the landowner is essential to a solid plan. 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. 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 in April of 2024. This summary looks at the use-related (operating) cost of farm machinery, as well as the overhead (ownership) costs of the machinery. The use-related expenses include fuel, repairs and maintenance, labor, and depreciation. Overhead costs include interest, insurance, and housing, which are calculated based on pre-set formulas. 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 
CHECK GRAIN BINS
    Most crop producers across the Midwest completed the 2025 harvest season somewhat early and may need to pay close attention to grain that is stored in on-farm grain bins for potential storage problems. Due to deferred grain sales and the potential for higher corn and soybean prices in the coming months, a large amount of corn and soybeans are likely being stored on the farm following harvest in 2025. Most of the crop was placed into grain bins at a variety of outside temperatures, some at fairly warm temperatures and other grain at much cooler temperatures. The grain temperature difference, along with fluctuations in recent outside temperatures, can result in wide temperature variations in the final grain temperature within grain bins. This can lead to moisture migration in the bin, which could potentially result in significant grain spoilage if the situation is not properly addressed. 
Farm operators should run aeration fans periodically to equalize the grain bin temperatures, which will help prevent this situation from occurring. It is also very important to check grain bins on a regular basis for any potential storage issues, and to address those issues promptly. Otherwise, there can be considerable damage to grain that is in storage, which can result in a significant financial loss. North Dakota State University has some very good resources costs available on stored grain management at: https://www.ag.ndsu.edu/graindrying 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- [email protected]