With planting season underway across much of the South, and soon across the Corn Belt, one of the major questions that will impact price direction is planted acreage.&nbsp;&nbsp;At the Agricultural Outlook Forum (AOF) in late February, USDA projected corn area planted at 94.0 million acres, up from 90.6 million in 2024 (Figure 1). The increase in acres from 2024 to 2025 was not a surprise given recent strength in corn prices relative to that of soybeans. But, the magnitude of the increase relative to trade expectations can have an impact on futures prices.&nbsp;



Additional information on farmer planting intentions will be released in the March 31&nbsp;Prospective Plantingsreport. This survey is administered by the National Agricultural Statistics Service (NASS) during the first two weeks in March. The next official report of planted acres is the&nbsp;Acreage&nbsp;report of June 30, an additional farmer survey of actual crop acres planted (and remaining intended).&nbsp;



Acres planted is a fluid variable with estimates moving from USDA’s model-based projections (February Outlook) to late-winter farmer intentions (March&nbsp;Prospective Plantings) to area actually planted (June&nbsp;Acreage).&nbsp;&nbsp;Shifts in futures prices as we move from winter to spring offer some indication of what to expect in forthcoming reports.&nbsp;



First, is the relationship between the numbers of the Outlook forum and the prospective plantings survey. In the 29 years since 1996 (the Freedom to Farm era, which moved away from acreage restrictions to greater flexibility in farmer planting decisions), farmer planting intentions were lower than the acreage number presented at the Outlook Forum 17 times (59%); while 12 years were higher (41%). The average for all years is 184,000 acres less of actual planted acreage compared to the Outlook forecast. Balanced against trade expectations, this would generally be seen as bullish for corn prices.&nbsp;



Second, do changes in futures prices affect farmer planting decisions as we move from late winter to spring? Using monthly average inflation adjusted prices of the December corn contract, there is a positive relationship between price changes and acres planted (Figure 2). Years in which the December futures contract increased from February to April tend to be correlated with an increase in acres planted relative to intended. A decline in prices from February to April is associated with fewer acres planted than intended. A rough estimate of that relationship is that a one-cent change in price changes area planted by about 9,000 acres.<a href="applewebdata://0F11893C-89CE-4723-AF4B-DB897A41C1EC#_ftn1">[1]</a>



How does this information position us for the release of 2025 acreage numbers? First, the greatest likelihood is for corn acres intended to come in lower than the projections of the Outlook Forum (bullish). Next, at the time of this writing, the average 2025 December corn futures closing price in March is 451.77 compared to 469.67 in February. If this relationship holds, that is, if the average price in April is still below the February price, that suggests a further reduction in acres from intended to actual (bullish).&nbsp;



Of course, a multitude of other supply and demand variables will ultimately influence the harvest price of corn. Extremes in the change in corn acres planted in response to price came in years of dramatic shifts in demand: 2007 (+2.4 million acres at the beginning of the biofuel era) and 2020 (-5.0 million acres, Covid). Developments related to tariffs and trade may be the catalyst for magnified response in the dynamics of price and acreage in 2025.&nbsp;&nbsp;



Figure 1. U.S. Corn Acres: Agricultural Outlook Forum (AOF),&nbsp;Prospective Plantings&nbsp;(PP), and&nbsp;Acreage



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Figure 2. Corn planted acres in response to a change in price



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="746" height="421" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.13.3-2.png" alt="" class="wp-image-41635"/></figure>



<a href="applewebdata://0F11893C-89CE-4723-AF4B-DB897A41C1EC#_ftnref1">[1]</a>&nbsp;For more on farmers’ response to price shocks on planting decisions, see “Estimating Supply Elasticities for Corn in the United States: Accounting for Prospective Plantings”, Raghav Goyal, Michael K. Adjemian, and William Secor, AAEA, 2022.



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References:



USDA, NASS,&nbsp;Acreage.&nbsp;Available online at&nbsp;<a href="https://usda.library.cornell.edu/concern/publications/j098zb09z">https://usda.library.cornell.edu/concern/publications/j098zb09z</a>.



USDA, Agricultural Outlook Forum. Available online at&nbsp;<a href="https://www.usda.gov/about-usda/general-information/staff-offices/office-chief-economist/agricultural-outlook-forum">https://www.usda.gov/about-usda/general-information/staff-offices/office-chief-economist/agricultural-outlook-forum</a>



USDA, NASS,&nbsp;Prospective Plantings. Available online at&nbsp;<a href="https://usda.library.cornell.edu/concern/publications/x633f100h">https://usda.library.cornell.edu/concern/publications/x633f100h</a>



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Welch, J. Mark. &#8220;<a href="https://southernagtoday.org/2025/03/25/estimating-corn-planted-acres-for-2025/">Estimating Corn Planted Acres for 2025.</a>&#8221; Southern Ag Today 5(13.3). March 26, 2025. <a href="http://estimating-corn-planted-acres-for-2025">Permalink</a>

Estimating Corn Planted Acres for 2025

While some of us might be tired of reading (and writing) about eggs, there is some new data out that sheds some more light on the pace of production recovery.&nbsp;&nbsp;USDA released its Chickens and Eggs report on Friday, March 21st.&nbsp;&nbsp;For eggs, two of the most important numbers in the report are: the number of table egg layers and the number of pullets on March 1st.&nbsp;&nbsp;These numbers tell us where we are currently in short term supplies and where we are headed in flock rebuilding.



The report indicated that there were 285.1 million table egg layers on March 1.&nbsp;&nbsp;That was down 8.7 million from February 1 and down 28.3 million from last March.&nbsp;&nbsp;It was the fewest table egg layers for any month since October 2015 and the fewest for March 1 since 2011.&nbsp;&nbsp;HPAI continued in full swing during February, far outstripping the ability to replace lost birds.&nbsp;&nbsp;



The number of pullets, young hens heading to egg production, of all types was up 6.8 million or 5.5 percent over March of 2024.&nbsp;&nbsp;About 500,000 more were available than in February.&nbsp;&nbsp;While pullet production facilities have not been immune from HPAI occurrences, their numbers are growing as the industry responds to high prices and short supplies.&nbsp;&nbsp;Beyond the increased number of pullets, more eggs in incubators and eggs per 100 layers running ahead of a year ago indicate some more growing supplies.&nbsp;&nbsp;



On the price side of eggs, many have noted in the last couple of weeks falling wholesale egg prices.&nbsp;&nbsp;For the week of March 22nd&nbsp;USDA-AMS reported egg prices delivered to warehouses of $3.96 per dozen.&nbsp;&nbsp;That is down from the peak of $8.51 per dozen for the first week of March.&nbsp;&nbsp;Egg prices tend to be highly volatile and this data highlights that.&nbsp;&nbsp;Based on data from the chickens and eggs report, it does not appear that growing supplies are driving lower prices.&nbsp;&nbsp;The most likely factor is demand economics.&nbsp;&nbsp;For almost all goods, people buy fewer quantities of an item when its price goes up.&nbsp;&nbsp;It appears that consumers are reacting to record high prices by purchasing fewer eggs which results in lower prices.&nbsp;



The bottom line is that while there are fewer table egg layers currently, increased egg production appears to the on the way.&nbsp;&nbsp;While egg prices are volatile, increased supplies, given a respite from HPAI caused chicken losses, will keep prices trending lower.



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="468" height="351" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.13.2-1.png" alt="" class="wp-image-41625"/></figure>



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Anderson, David. &#8220;<a href="https://southernagtoday.org/2025/02/07/chickens-before-eggs/">Chickens Before Eggs.</a>&#8221; Southern Ag Today 5(13.2). March 25, 2025. Permalink

Chickens Before Eggs

Timely planting is crucial for crop insurance coverage, ensuring producers remain eligible for their selected yield or revenue guarantee. Producers should monitor three key crop insurance planting dates: Earliest Planting Date, Final Planting Date, and End of Late Planting Period Date. These dates determine coverage eligibility and can impact insurance claims. While crop insurance planting dates typically remain consistent from year to year, they may occasionally be reviewed and adjusted by the U.S. Department of Agriculture &#8211; Risk Management Agency when necessary. Any changes to these crop insurance planting dates involve a thorough process, including stakeholder input and consultation with Extension specialists and experts.



Earliest Planting Date&nbsp;is the earliest date producers may plant an insured agricultural commodity (e.g., rice, corn, soybeans, and peanuts) and qualify for a replanting payment if the crop is damaged by an insurable cause of loss and such payment is available for the crop. However, cotton does not have a designated Earliest Planting Date. Since cotton planting depends on soil moisture and temperature, which vary annually, a fixed Earliest Planting Date is impractical. Additionally, because the cotton crop insurance program does not include replant payment coverage, an Earliest Planting Date is unnecessary for determining replant eligibility.



Final Planting Date&nbsp;is the deadline by which acres must be planted to receive the full production guarantee selected by the producer. Acres planted after this date will have a reduced guarantee for crop insurance products with a Late Planting Period. Any unplanted acres as of this date must be reported to the insurance agent within three days.&nbsp;



Late Planting Period&nbsp;for cotton crop insurance begins the day after the Final Planting Date and lasts for 5, 7, 10, or 15 days, depending on the location. Late Planting Period ends on the&nbsp;End of Late Planting Period Date. This period applies only to cotton crop insurance products that include a Late Planting Period. The specific length of the late planting period varies by location:



<ul class="wp-block-list">
<li>15 days: Counties in Arizona, Arkansas, California, Kansas, Louisiana, Missouri, and Tennessee.</li>



<li>10 days: Counties in Alabama, Georgia, and South Carolina.</li>



<li>7 days: Counties in New Mexico, Oklahoma, and Texas.</li>



<li>5 days: Counties in North Carolina and Virginia.</li>



<li>For Florida, only Nassau County has a 10-day late planting period, while all other counties have 15 days.</li>



<li>For Mississippi, 10 counties in the southern part of the state have a 10-day late planting period, while the rest of the counties have 15 days.</li>
</ul>



For acreage planted during the Late Planting Period, the crop insurance guarantee decreases by 1% for each day after the Final Planting Date until the End of Late Planting Period Date, while the producer’s insurance premium remains unchanged. Acres planted after the End of Late Planting Period Date are generally uninsurable, except in cases where prevented planting coverage applies.



Our previous&nbsp;<a href="https://southernagtoday.org/2023/12/20/exploring-diverse-crop-insurance-options-for-cotton-producers/">article</a>&nbsp;in Southern Ag Today provided a detailed overview of all crop insurance products available to cotton producers. Cotton insured under Yield Protection (YP) or Revenue Protection (RP) plans, with related Supplemental Coverage Option (SCO), Enhanced Coverage Option (ECO), and Hurricane Insurance Protection &#8211; Wind Index (HIP-WI) options and endorsements, all follow the same Final Planting Dates, Late Planting Periods, and End of Late Planting Period Dates. The Final Planting Dates for these plans are illustrated in Figure 1.



Cotton insured under Area Risk Protection Insurance (ARPI) and Stacked Income Protection (STAX) does not have a Late Planting Period, thus no End of Late Planting Period Date. Additionally, even though ARPI and STAX policies have the Final Planting Dates, they differ from those of other crop insurance plans. This distinction exists because STAX and ARPI are area-based plans, where coverage and indemnities are determined by county-wide expected and final yields/revenue rather than individual producer’s farm yields or revenue. Since a producer’s specific planting date has a minimal impact on county-wide yield/revenue risk, late planting does not lead to a reduction in coverage under these plans. As a result, the Final Plant Dates for STAX and ARPI align with the End of Late Planting Period Date used for other crop insurance plans.



If planting by these deadlines is not possible, farmers should keep detailed records documenting the cause. If farmers anticipate being unable to complete planting by the Final Planting Date or during the Late Planting Period, they should contact their crop insurance agent as soon as possible to discuss their options.



Figure 1. Regional Variations in Final Planting Dates for Cotton Crop Insurance: YP, RP, SCO, ECO, and HIP-WI Policies



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Reference:&nbsp;



Chong, Fayu, Yangxuan Liu, and Hunter Biram. “Exploring Diverse Crop Insurance Options for Cotton Producers.” Southern Ag Today 3(51.3). December 20, 2023.&nbsp;



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Yangxaun, Liu, Hunter Biram, and Faygu Chong. &#8220;<a href="https://southernagtoday.org/2025/02/07/cotton-crop-insurance-navigating-planting-dates-deadline-variations-across-regions/">Cotton Crop Insurance: Navigating Planting Dates Deadline Variations Across Regions.</a>&#8221; Southern Ag Today 5(13.1). March 24, 2025. <a href="http://cotton-crop-insurance-navigating-planting-dates-deadline-variations-across-regions">Permalink</a>

Cotton Crop Insurance: Navigating Planting Dates Deadline Variations Across Regions

Over the span of two centuries, the economic structure of the United States has evolved from a predominantly agrarian base to an industrial and, more recently, a service-oriented economy. As these transitions happened, many urban and suburban residents in the U.S. became increasingly disconnected from agriculture, as employment in the agricultural sector declined from approximately 8 million in 1950 to about 2.3 million at the end of 2024 (U.S. Bureau of Labor Statistics, 2025). According to the 2020 census, about 80% of the U.S. population live in urban areas, a slight decrease from 2010. Yet, despite this urban shift, the public’s interest in understanding where food comes from remains strong given the growth in farm participation in agritourism over the years and the revenue generated from these activities. The development and expansion of agritourism, creates opportunities for individuals to engage with farms and experience agriculture firsthand. Agritourism encompasses a range of farm-based activities, including educational tours, U-pick operations, farm-to-table events, and guided visits to crop and livestock farms, such as petting zoos.&nbsp;



Agritourism has been an important segment of the agricultural economy in the U.S., contributing $1.26 billion in agricultural revenues in 2022, and is expected to grow in the coming years (USDA NASS, 2025). This growth, while expected nationwide, is also evident in southern United States, where agritourism is gaining traction. The southern region contributed about 35% of the total U.S. agritourism and recreational services income (Table 1). Moreover, over 40% of the farms indicate this level of income activity is from the southern region. To emphasize the importance of agritourism on the economy, recent studies have undertaken economic impact assessments for states like Tennessee and Georgia. In Tennessee, Dhungana and Khanal (2023) estimated a total industry output of approximately $119 million, driven by $65 million in direct spending on agritourism farms. Georgia’s agritourism-related activities were estimated to have generated a total economic impact of $109.8 million in 2022, increasing from $88.2 million in 2021 (Kane, 2024).&nbsp;



Most southern states experienced an increase in agritourism and recreational income and farm participation between 2017 and 2022 (Table 1). Louisiana and Tennessee had the highest increases in farm participation of 23.3% and 11.0%, respectively. Unsurprisingly, the bulk of farm participation occurred in Texas with 4,816 farms in 2022, down from 5,723 in 2017. Despite this decline in farm participation in Texas, the state saw an 18% increase in revenue to about $192 million in 2022. All states, except Kentucky, recognized increases in income, with South Carolina (125.6%), Mississippi (99.6%), Oklahoma (70.7%), and Tennessee (68.4%) showing increases above sixty percent. Despite a 9.2% increase in farm participation in Kentucky, its income decreased by 15.5% to $14.4 million.



Beyond its broader economic contributions, agritourism serves as a critical farm diversification strategy, allowing producers to generate additional revenue streams while mitigating enterprise risks associated with a non-diversified income stream, such as market price fluctuations. As consumer demand for local foods continues to rise, the willingness to pay price premiums for these products will create ongoing opportunities for farms engaged in direct sales. Agritourism also fosters economic development through indirect channels, including job creation in hospitality and food retail sectors that support local foods and agricultural sectors. Additionally, visitor spending in agricultural communities bolsters rural economies, enhancing their economic resilience. Beyond economic impacts, agritourism strengthens cultural heritage and reinforces rural identities. Educational components of agritourism facilitate partnerships between farmers, local organizations, and schools, fostering deeper community engagement. As agritourism continues to expand, its role in supporting both agricultural viability and rural economic development will remain significant.



Table 1. Agritourism and Recreational Income for Southern U.S.



<figure class="wp-block-table has-small-font-size"><table class="has-fixed-layout"><tbody><tr><td class="has-text-align-left" data-align="left" rowspan="2">State/Region</td><td colspan="2">No. of Farms</td><td colspan="2">Income ($000)</td></tr><tr><td class="has-text-align-left" data-align="left">2017</td><td>2022</td><td>2017</td><td>2022</td></tr><tr><td class="has-text-align-left" data-align="left">AL</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;481&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;507&nbsp;</td><td>$6,793</td><td>$9,848</td></tr><tr><td class="has-text-align-left" data-align="left">AR</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;295&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;316&nbsp;</td><td>$4,705</td><td>$6,000</td></tr><tr><td class="has-text-align-left" data-align="left">FL</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;761&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;784&nbsp;</td><td>$27,047</td><td>$39,924</td></tr><tr><td class="has-text-align-left" data-align="left">GA</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;736&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;742&nbsp;</td><td>$28,058</td><td>$31,052</td></tr><tr><td class="has-text-align-left" data-align="left">KY</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;651&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;711&nbsp;</td><td>$17,013</td><td>$14,372</td></tr><tr><td class="has-text-align-left" data-align="left">LA</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;215&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;265&nbsp;</td><td>$2,567</td><td>$3,058</td></tr><tr><td class="has-text-align-left" data-align="left">MS</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;321&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;346&nbsp;</td><td>$6,564</td><td>$13,104</td></tr><tr><td class="has-text-align-left" data-align="left">NC</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;995&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;982&nbsp;</td><td>$23,785</td><td>$30,399</td></tr><tr><td class="has-text-align-left" data-align="left">OK</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;761&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;736&nbsp;</td><td>$6,525</td><td>$11,139</td></tr><tr><td class="has-text-align-left" data-align="left">SC</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;505&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;516&nbsp;</td><td>$6,219</td><td>$14,032</td></tr><tr><td class="has-text-align-left" data-align="left">TN</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;644&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;715&nbsp;</td><td>$14,519</td><td>$24,457</td></tr><tr><td class="has-text-align-left" data-align="left">TX</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,723&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,816&nbsp;</td><td>$162,567</td><td>$191,793</td></tr><tr><td class="has-text-align-left" data-align="left">VA</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;863&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;833&nbsp;</td><td>$40,933</td><td>$52,047</td></tr><tr><td class="has-text-align-left" data-align="left">United States</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,575&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,617&nbsp;</td><td>$949,323</td><td>$1,259,261</td></tr><tr><td class="has-text-align-left" data-align="left">Southern Region</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,951&nbsp;</td><td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,269&nbsp;</td><td>$347,295</td><td>$441,225</td></tr><tr><td class="has-text-align-left" data-align="left">Southern Region&nbsp; (% of U.S. Total)</td><td>45.3</td><td>42.9</td><td>36.6</td><td>35.0</td></tr></tbody></table><figcaption class="wp-element-caption">Source: USDA NASS 2022 Census of Agriculture Note: Income is not adjusted for inflation.</figcaption></figure>



References



Dhungana, P., and A. Khanal. 2023. “Spending on farms ripples into the region: agritourism impacts.”&nbsp;Frontiers in Environmental Economics&nbsp;2.&nbsp;<a href="https://doi.org/10.3389/frevc.2023.1219245">https://doi.org/10.3389/frevc.2023.1219245</a>.



Kane, S. 2024. “2024 Ag Snapshot.”&nbsp;Center for Agribusiness and Economic Development,&nbsp;University of Georgia Extension.&nbsp;<a href="https://extension.uga.edu/publications/detail.html?number=AP129-2&amp;title=2024-ag-snapshots">https://extension.uga.edu/publications/detail.html?number=AP129-2&amp;title=2024-ag-snapshots</a>.



U.S. Bureau of Labor Statistics. 2025.&nbsp;<a href="https://www.bls.gov/">https://www.bls.gov/</a>&nbsp;(Accessed March 17, 2025).



USDA, National Agricultural Statistics Service (NASS). 2025. “2022 Census of Agriculture.” https://www.nass.usda.gov/Publications/AgCensus/2022/.



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Britwum, Kofi, and Chrystol Thomas. &#8220;<a href="https://southernagtoday.org/2025/03/19/developing-rural-economic-opportunities-through-agritourism/">Developing Rural Economic Opportunities Through Agritourism.</a>&#8221; Southern Ag Today 5(12.5). March 21, 2025. <a href="http://developing-rural-economic-opportunities-through-agritourism">Permalink</a>

Developing Rural Economic Opportunities Through Agritourism

To say that international trade has dominated the news in recent weeks would be an understatement. Last month, President Trump followed through on his promise to impose 25% tariffs on Canada and Mexico, and an additional 10% on China. While Mexico—and to a lesser extent, Canada—received another temporary reprieve, the threat of tariffs still looms.



It is crucial to understand the potential impacts of these tariffs on U.S. agriculture. In his recent State of the Union Address, as well as in subsequent social media posts, President Trump claimed that the new round of tariffs would result in increased domestic agricultural sales. There is an element of truth to this claim. According to economic theory, tariffs can lead to a rise in domestic sales—if the imported product directly competes with a similar domestic product. However, this does not apply to commodities like soybeans or cotton, as the U.S. exports far more of these products than can be consumed domestically. For example, more than 70% of U.S. cotton production is exported. In fact, these sectors are particularly vulnerable because they are often the target of retaliatory tariffs. Also, any increase in domestic sales resulting from tariffs has less to do with firms facing less competition and more to do with the fact that tariffs lead to higher domestic prices. These higher prices, in turn, encourage more domestic producers to sell their products. While this benefits producers, it unfortunately disadvantages importing firms and consumers, with the disadvantages far outweighing any gains.&nbsp;



Imports should not be regarded solely as competition to American production. This perspective neglects the essential role imports play in meeting demands that exceed domestic capabilities. International trade is far more complex than the simplistic notion that “exports are good, imports are bad.”



Tequila, an agricultural product imported entirely from Mexico and cannot be produced elsewhere, serves as a prime example for examining the harmful impacts of proposed tariffs. U.S. imports of distilled spirits have soared by over 300% since 2000, largely driven by the extraordinary growth in tequila imports. Between 2000 and 2024, tequila imports skyrocketed by 1,400%, rising from $350 million to $5.4 billion (Figure 1). In 2024, U.S. agricultural exports totaled $176 billion, while imports reached $214 billion, resulting in an agricultural trade deficit of $38 billion. Remarkably, tequila alone accounts for over 14% of this deficit, despite being a single, highly differentiated product. Over the past decade, our growing taste for tequila has driven a more than five-fold surge in demand and imports. Imagine the outrage if tequila imports were banned simply to address the agricultural trade deficit.



I recently conducted research on the impact of a 25% tariff on Mexico and Canada on U.S. imports of distilled spirits (<a href="https://doi.org/10.1002/agr.22034">https://doi.org/10.1002/agr.22034</a>). My findings indicate that such a tariff would reduce imports by over $1 billion, far outweighing any potential tariff revenue gains. This overall decline is primarily driven by a significant drop in tequila imports, though imports of other spirits would also decrease due to complementarities in importing.



It could be argued that these losses would primarily impact the exporting country—Mexican tequila companies. However, this perspective overlooks the fact that U.S. tequila consumption also supports American bars, retailers, wholesalers, and distributors. When factoring in the downstream economic impact, the losses become even more substantial. Clearly, it would be difficult to prove that American largess is enriching Mexican agave farmers at the expense of U.S. agricultural producers.



Figure 1.&nbsp;U.S. Imports of Tequila and Other Spirits: 2000 – 2024



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1155" height="625" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.12.4.jpg" alt="" class="wp-image-41592" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.12.4.jpg 1155w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.12.4-1024x554.jpg 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.12.4-768x416.jpg 768w" sizes="auto, (max-width: 1155px) 100vw, 1155px" /><figcaption class="wp-element-caption">Source: U.S. Department of Agriculture, Foreign Agricultural Service (2025)</figcaption></figure>



For more information:



Muhammad, A. (2025), Trump Tariffs 2.0: Assessing the Impacts on US Distilled Spirits Imports. Agribusiness.&nbsp;<a href="https://doi.org/10.1002/agr.22034">https://doi.org/10.1002/agr.22034</a>



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Muhammad, Andrew. &#8220;<a href="https://southernagtoday.org/2025/02/07/estimating-the-impact-of-low-mississippi-river-levels-on-soybean-basis-in-the-midsouth/">Rethinking Tariffs: Tequila Shows There’s More to Imports Than Competition.</a>&#8221; Southern Ag Today 5(12.4). March 20, 2025. <a href="http://rethinking-tariffs-tequila-shows-theres-more-to-imports-than-competition">Permalink</a>

Rethinking Tariffs: Tequila Shows There’s More to Imports Than Competition

Extreme weather events, like drought, jointly impact agricultural production and rural infrastructure, including transportation infrastructure. An important part of this transportation infrastructure is the Mississippi River. It serves as one of the most critical networks for moving agricultural commodities from production to consumption areas, including export markets. In 2020, U.S. agricultural exports totaled $146 billion, increasing 7 percent year over year (U.S. Department of Agriculture’s Foreign Agricultural Service, 2021). Approximately 46 percent of grain exports were moved by barge in 2020. Soybeans, the leading U.S. agricultural export, rely heavily on barge transportation, with 53 percent of exports and 28 percent of total supplies moved by barge in 2020.



Despite this reliance on barges for moving U.S. grain, little is known about the link between extreme weather, rural transportation infrastructure, and crop prices. In 2022 and 2023, the Lower Mississippi River reached historic lows. In October, the U.S. Geological Survey (USGS) Memphis stream gauge read -12.0 feet and -10.8 feet in 2023 and 2022, respectively. The previous record was set in 1988 when the USGS Memphis stream gauge read -10.7 feet. These record-low water levels increased transportation costs and barge freight rates as documented by previous Southern Ag Today articles (Biram, et al., 2022; Gardner, Biram, and Mitchell, 2023; Biram, Mitchell, and Stiles, 2024). Higher transportation costs are transmitted to row crop producers through lower cash bids or a weakening of local crop basis (calculated as the cash price minus the futures price). Historic lows in Mississippi River levels during the fall harvest of the last three years have highlighted the need to measure the impact of these low river levels on rural infrastructure and communities.



Mitchell and Biram (2025) measure the impact of low water levels on the Mississippi River using Arkansas soybean basis data across 12 regional grain markets from USDA’s Agricultural Marketing Service and stream gauge data from USGS. They use a “low river” status measure that affects a grain market once the river gauge height falls below negative five feet and is weighted by the distance between a grain elevator and the closest public Mississippi River port.&nbsp;&nbsp;They find that when the river stream gauge in Memphis, Tennessee reads -5 feet, Arkansas soybean basis weakens (widens) by $0.58 per bushel, $0.29 per bushel, and $0.12 per bushel for grain markets that are 5 miles, 10 miles, and 25 miles from the closest Mississippi River port, respectively. Similarly, they find that Mississippi soybean basis weakens (widens) by $0.55 per bushel, $0.28 per bushel, and $0.11 per bushel for the same distances to grain markets. Figure 1 below shows the degree of the impact of low river levels on soybean basis in Arkansas with markets near the river experiencing weaker basis than of those further from the river.



Figure 1. Impact of Low Mississippi River Levels on Soybean Basis in Dollars per Bushel in Arkansas



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="1466" height="1466" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.12.3-1.png" alt="" class="wp-image-41584" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.12.3-1.png 1466w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.12.3-1-1024x1024.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.12.3-1-150x150.png 150w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/03/5.12.3-1-768x768.png 768w" sizes="auto, (max-width: 1466px) 100vw, 1466px" /><figcaption class="wp-element-caption">Note: Each line represents a different stream gage height threshold. The term &#8220;marginal effect&#8221; denotes the change in Arkansas soybean basis, measured in dollars per bushel, for every additional mile between a grain market and a river port.</figcaption></figure>



References



Biram, Hunter, John Anderson, Scott Stiles, and Andrew McKenzie. “<a href="https://southernagtoday.org/2022/10/low-water-levels-in-the-mississippi-river-result-in-abnormally-weak-soybean-basis/">Low Water Levels in the Mississippi River Result in Abnormally Weak Soybean Basis</a>“.&nbsp;Southern Ag Today&nbsp;2(45.1). October 31, 2022.&nbsp;<a href="http://low-water-levels-in-the-mississippi-river-result-in-abnormally-weak-soybean-basis/">Permalink</a>



Biram, Hunter, James L. Mitchell, and H. Scott Stiles. “<a href="https://southernagtoday.org/2024/09/12/low-river-levels-on-the-mississippi-river-not-the-three-peat-we-want/">Low Rivers Levels on the Mississippi River: Not the Three-Peat We Want</a>.” Southern Ag Today 4(39.3). September 25, 2024.&nbsp;<a href="http://low-river-levels-on-the-mississippi-river-not-the-three-peat-we-want/">Permalink</a>



Gardner, Grant, Hunter Biram, and James Mitchell. “Low River Levels, Barge Freight, and Widening Basis.”&nbsp;Southern Ag Today&nbsp;3(39.1). September 25, 2023.&nbsp;<a href="http://low-river-levels-barge-freight-and-widening-basis/">Permalink</a>



Mitchell, J. L., &amp; Biram, H. D. (2025).&nbsp;<a href="https://onlinelibrary.wiley.com/doi/full/10.1002/aepp.13511?campaign=wolearlyview">The effects of extreme weather on rural transportation infrastructure and crop prices along the Lower Mississippi River.</a>&nbsp;Applied Economic Perspectives and Policy.



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Biram, Hunter, and James L. Mitchell. &#8220;<a href="https://southernagtoday.org/2025/02/07/estimating-the-impact-of-low-mississippi-river-levels-on-soybean-basis-in-the-midsouth/">Estimating the Impact of Low Mississippi River Levels on Soybean Basis in the Midsouth</a>.&#8221; Southern Ag Today 5(12.3). March 19, 2025. <a href="http://estimating-the-impact-of-low-mississippi-river-levels-on-soybean-basis-in-the-midsouth">Permalink</a>

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