Low commodity prices, high input costs, and trade market uncertainty have placed significant financial strain on many row crop producers throughout the U.S. In response, the U.S. Department of Agriculture developed the Farmer Bridge Assistance (FBA) program (USDA-FSA, 2025a). The FBA program aims to deliver one-time commodity-specific payments ($/acre) to row crop producers to serve as a financial bridge until the benefits of the One Big Beautiful Bill Act (OBBBA) become available in October 2026 (USDA-FSA, 2025b). Payments will be made to eligible producers based on 2025 planted acres reported to the FSA. Farmers who qualify for the FBA program can expect payments to be released by February 28, 2026 (USDA-FSA, 2025a). On December 31, 2025, the USDA released details on the per-acre payment rates for all eligible row crop commodities (USDA-FSA, 2025b). Rice farmers who qualify for the FBA program will receive a payment rate of $132.89/acre.&nbsp;



This article evaluates the impact of the FBA Program on rice returns to operating and total (operating plus fixed) costs in the southern U.S. The analysis is based on average rice production costs and average expected rice yields obtained from 2025 Cooperative Extension rice enterprise budgets from Arkansas, Louisiana, Mississippi, Missouri, and Texas. Seven southern U.S. rice regions are evaluated (Eastern Arkansas, Mississippi Delta, Southeast Missouri, Northeast Louisiana, Southwest Louisiana, Texas Gulf East, and Texas Gulf West). Results for Southwest Louisiana and Texas Gulf West are evaluated for the first crop and for the first crop plus a ratoon crop. Average rice yields, costs, and returns per acre for the analysis are presented below in the accompanying table.



Figure 1 presents budgeted rice returns to both operating costs and total costs by southern U.S. rice region without assistance from the FBA program. Budgeted returns to both operating costs and total costs are negative for all regions except those located in Louisiana. Operating costs in the Louisiana rice regions are lower due to lower herbicide, fertilizer, and seed costs.&nbsp;



Figure 2 presents rice returns to both operating costs and total costs by southern U.S. rice region when assistance from the FBA program is included. Returns to total costs by region are still largely negative except for the Louisiana regions. However, returns to operating costs are either positive or close to breakeven for many of the remaining southern rice regions.&nbsp;



It is important to note that these results are from pre-season budget estimates not actual 2025 observations, but they do provide an estimated scope of the FBA program impact in rice.&nbsp;&nbsp;Results indicate the FBA program may not help with covering total costs in most instances, but would aid in covering most or all of rice operating costs. Thus, the FBA program could help many rice producers obtain operating loans for production inputs, thus allowing them to get a rice crop planted for the 2026 crop year.



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="756" height="485" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.04.1-1.png" alt="" class="wp-image-43296"/></figure>



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="756" height="485" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.04.1-2.png" alt="" class="wp-image-43297"/></figure>



Table 1. Average Rice Yields, Costs, and Returns by Southern U.S. Rice Region based on State Cooperative Extension Rice Enterprise Budgets, 2025



<figure class="wp-block-table aligncenter has-small-font-size"><table><tbody><tr><td>Region</td><td class="has-text-align-center" data-align="center">Yield (cwt/acre)</td><td class="has-text-align-center" data-align="center">Operating Costs ($/acre)</td><td class="has-text-align-center" data-align="center">Total Costs ($/acre)</td><td class="has-text-align-center" data-align="center">Gross Returns ($/acre)&nbsp;</td><td class="has-text-align-center" data-align="center">Returns Above Operating Costs ($/acre)</td><td class="has-text-align-center" data-align="center">Returns Above Total Costs ($/acre)</td></tr><tr><td>Eastern AR</td><td class="has-text-align-center" data-align="center">81</td><td class="has-text-align-center" data-align="center">947</td><td class="has-text-align-center" data-align="center">1121</td><td class="has-text-align-center" data-align="center">905</td><td class="has-text-align-center" data-align="center">-42</td><td class="has-text-align-center" data-align="center">-216</td></tr><tr><td>MS Delta</td><td class="has-text-align-center" data-align="center">76</td><td class="has-text-align-center" data-align="center">1006</td><td class="has-text-align-center" data-align="center">1195</td><td class="has-text-align-center" data-align="center">851</td><td class="has-text-align-center" data-align="center">-155</td><td class="has-text-align-center" data-align="center">-344</td></tr><tr><td>SE MO</td><td class="has-text-align-center" data-align="center">78</td><td class="has-text-align-center" data-align="center">953</td><td class="has-text-align-center" data-align="center">1286</td><td class="has-text-align-center" data-align="center">865</td><td class="has-text-align-center" data-align="center">-87</td><td class="has-text-align-center" data-align="center">-420</td></tr><tr><td>NE LA</td><td class="has-text-align-center" data-align="center">73</td><td class="has-text-align-center" data-align="center">597</td><td class="has-text-align-center" data-align="center">710</td><td class="has-text-align-center" data-align="center">810</td><td class="has-text-align-center" data-align="center">213</td><td class="has-text-align-center" data-align="center">100</td></tr><tr><td>SW LA, First Crop</td><td class="has-text-align-center" data-align="center">72</td><td class="has-text-align-center" data-align="center">701</td><td class="has-text-align-center" data-align="center">845</td><td class="has-text-align-center" data-align="center">804</td><td class="has-text-align-center" data-align="center">103</td><td class="has-text-align-center" data-align="center">-41</td></tr><tr><td>SW LA, First + Ratoon</td><td class="has-text-align-center" data-align="center">98</td><td class="has-text-align-center" data-align="center">859</td><td class="has-text-align-center" data-align="center">1034</td><td class="has-text-align-center" data-align="center">1089</td><td class="has-text-align-center" data-align="center">230</td><td class="has-text-align-center" data-align="center">55</td></tr><tr><td>TX Gulf, East</td><td class="has-text-align-center" data-align="center">55</td><td class="has-text-align-center" data-align="center">813</td><td class="has-text-align-center" data-align="center">918</td><td class="has-text-align-center" data-align="center">614</td><td class="has-text-align-center" data-align="center">-199</td><td class="has-text-align-center" data-align="center">-304</td></tr><tr><td>TX Gulf West, First Crop</td><td class="has-text-align-center" data-align="center">70</td><td class="has-text-align-center" data-align="center">1054</td><td class="has-text-align-center" data-align="center">1129</td><td class="has-text-align-center" data-align="center">782</td><td class="has-text-align-center" data-align="center">-272</td><td class="has-text-align-center" data-align="center">-347</td></tr><tr><td>TX Gulf West, First + Ratoon</td><td class="has-text-align-center" data-align="center">86</td><td class="has-text-align-center" data-align="center">1241</td><td class="has-text-align-center" data-align="center">1341</td><td class="has-text-align-center" data-align="center">960</td><td class="has-text-align-center" data-align="center">-280</td><td class="has-text-align-center" data-align="center">-381</td></tr><tr><td colspan="7">Note: Gross returns calculated assuming an average long grain rice price of $11.17/cwt for the months of August – October 2025 (USDA, NASS, 2026). Total costs are calculated as operating plus fixed costs and exclude charges for land and management.&nbsp;&nbsp;</td></tr></tbody></table></figure>



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References and Resources



Louisiana State University AgCenter. LSU College of Agriculture. Enterprise Budgets.&nbsp;<a href="https://www.lsuagcenter.com/portals/our_offices/research_stations/deanlee/features/enterprise-budgets">https://www.lsuagcenter.com/portals/our_offices/research_stations/deanlee/features/enterprise-budgets</a>



Mississippi State University, Department of Agricultural Economics. Budgets.&nbsp;<a href="https://www.agecon.msstate.edu/whatwedo/budgets.php">https://www.agecon.msstate.edu/whatwedo/budgets.php</a>



Texas A&amp;M Agrilife Extension, Extension Agricultural Economics. Texas Crop and Livestock Budgets.&nbsp;<a href="https://agecoext.tamu.edu/resources/crop-livestock-budgets/">https://agecoext.tamu.edu/resources/crop-livestock-budgets/</a>



University of Arkansas System Division of Agriculture, Cooperative Extension Service. Crop Enterprise Budgets for Arkansas.&nbsp;<a href="https://uaex.uada.edu/farm-ranch/economics-marketing/farm-planning/budgets/crop-budgets.aspx">https://uaex.uada.edu/farm-ranch/economics-marketing/farm-planning/budgets/crop-budgets.aspx</a>



University of Missouri Extension. Missouri Crop and Livestock Enterprise Budgets.&nbsp;<a href="https://extension.missouri.edu/programs/agricultural-business-and-policy-extension/missouri-crop-and-livestock-enterprise-budgets">https://extension.missouri.edu/programs/agricultural-business-and-policy-extension/missouri-crop-and-livestock-enterprise-budgets</a>



USDA-FSA, 2025a. Farmer Bridge Assistance (FBA) Program.&nbsp;<a href="https://www.fsa.usda.gov/tools/informational/fact-sheets/farmer-bridge-assistance-program">https://www.fsa.usda.gov/tools/informational/fact-sheets/farmer-bridge-assistance-program</a>



USDA-FSA, 2025b. USDA Announces Commodity Payment Rates for Farmer Bridge Assistance Program. December 31, 2025.&nbsp;&nbsp;<a href="https://www.fsa.usda.gov/news-events/news/12-31-2025/usda-announces-commodity-payment-rates-farmer-bridge-assistance-program">https://www.fsa.usda.gov/news-events/news/12-31-2025/usda-announces-commodity-payment-rates-farmer-bridge-assistance-program</a>



USDA-NASS (2026). United States Department of Agriculture, Quick-Stats.&nbsp;<a href="https://quickstats.nass.usda.gov/">https://quickstats.nass.usda.gov/</a>



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Watkins, Brad. &#8220;<a href="https://southernagtoday.org/2026/01/08/potential-impact-of-the-farmer-bridge-assistance-program-on-southern-u-s-rice/">Potential Impact of the Farmer Bridge Assistance Program on Southern U.S. Rice.</a>&#8220; Southern Ag Today 6(4.1). January 19, 2026. <a href="https://southernagtoday.org/2026/01/08/potential-impact-of-the-farmer-bridge-assistance-program-on-southern-u-s-rice/">Permalink</a>

Potential Impact of the Farmer Bridge Assistance Program on Southern U.S. Rice

By: National Agricultural Law Center Attorney Staff



Agricultural law in 2025 was marked by developments with lasting implications for producers, agribusinesses, and rural communities. Attorneys at the National Agricultural Law Center have identified the following major trends that shaped the year.



<ul class="wp-block-list">
<li>State restrictions on foreign ownership of farmland continued to expand. Six states amended existing laws and four enacted new restrictions, at the same time courts considered constitutional challenges. Recent cases involving Florida and Texas laws were dismissed on standing grounds, leaving the broader legal questions unresolved.</li>



<li>Federal agencies proposed sweeping changes to environmental law. In November, EPA and the U.S. Army Corps of Engineers released a proposed revision to the definition of “waters of the United States” under the Clean Water Act, aligning it with the Supreme Court’s 2023 decision limiting jurisdiction to “relatively permanent” waters with a continuous surface connection. Meanwhile, the Fish and Wildlife Service and National Marine Fisheries Service issued four proposed rules revising Endangered Species Act implementation, including species listing, critical habitat designation, interagency consultation, and elimination of FWS’s blanket 4(d) rule for threatened species.</li>



<li>Congress also reshaped hemp regulation through appropriations legislation that closed the “hemp loophole” created by the 2018 Farm Bill. The law redefined hemp based on total THC content and excluded synthesized cannabinoids such as delta-8 and delta-10, significantly affecting an industry largely focused on cannabinoid production when the changes take effect in November 2026.</li>



<li>Food policy gained attention through the Make America Healthy Again (MAHA) movement, led federally by HHS and echoed by states. Legislative efforts included new food labeling requirements, restrictions on ingredients in school meals, bans on synthetic food dyes, and proposals to limit SNAP-eligible foods through USDA waivers.</li>



<li>Pesticide litigation remained a major issue, particularly whether the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) preempts state “failure to warn” tort claims. While manufacturers argue federal label approval preempts liability, plaintiffs contend FIFRA requires adequate health warnings. The Supreme Court may resolve the issue in Monsanto Co. v. Durnell, with the Solicitor General urging review and preemption.</li>



<li>Trade policy also shifted as the Trump Administration increased tariffs using the International Emergency Economic Powers Act (IEEPA). This unprecedented use of IEEPA authority was challenged in V.O.S. Selections, Inc. v. Trump, argued before the Supreme Court in November, while potential trade agreements remain preliminary.</li>



<li>Labor issues intensified with changes to the H-2A foreign agricultural worker program. A court vacated the 2023 Adverse Effect Wage Rate rule, prompting reversion to an older formula and subsequent issuance of a new interim final rule, now subject to legal challenge.</li>



<li>EPA actions on pesticide registration and labeling continued, including issuance of its Insecticide Strategy, proposed dicamba label revisions, and litigation over herbicides and neonicotinoids that could affect future availability.</li>



<li>Competition concerns spanned the agricultural supply chain. DOJ and USDA investigated meatpacker conduct, while scrutiny expanded to seed, chemical, and fertilizer markets. In December, President Trump ordered agencies to investigate anticompetitive behavior across food industries.</li>



<li>H.R.1—the One Big Beautiful Bill Act—reauthorized key farm bill programs, increased reference prices and payment limits, strengthened crop insurance, and made major tax provisions permanent, including an inflation-indexed increase to the estate tax exemption.</li>
</ul>



Looking ahead to 2026, many of the top issues from this past year will continue to develop. Additional areas to watch are&nbsp;challenges to Prop 12 and related statutes on issues of preemption,&nbsp;interest in state legislatures around the labeling and sale of cell-cultured proteins, and&nbsp;updates to the Colorado River operating plan.&nbsp; We also expect to see issues related to&nbsp;financial distress in the farm economy&nbsp;and state level responses, such as amending or creating&nbsp;grain indemnity laws&nbsp;and financial assistance programs.&nbsp;&nbsp;A link with more information about each of these stories is available at&nbsp;<a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fbit.ly%2F48SRX0p&amp;data=05%7C02%7Cerumley%40uark.edu%7C3b96840ec54e4555949708de38e7ce03%7C79c742c4e61c4fa5be89a3cb566a80d1%7C0%7C0%7C639010765596554701%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=qdBWDkg3srkHcakhycSZXCvrPDdUczzxIV4dUZG9WzA%3D&amp;reserved=0">https://bit.ly/48SRX0p</a>.&nbsp;

Uncertainty is the Name of the Game for U.S. Agricultural Trade in 2026

On Monday, January 12, 2026, the USDA World Agricultural Supply and Demand Estimates (WASDE) report was released with some unexpected projections.&nbsp;&nbsp;A record corn crop is even larger than expected, now projected at 17 billion bushels, up 269 million bushels from the prior month.&nbsp;&nbsp;This is a result of a record yield of 186.5 bushels per acre on a record 91.3 million harvested acres.&nbsp;&nbsp;While total use was also increased to 16.4 billion bushels, the stocks-to-use ratio is projected to be 13.6%, up from 12.5% a month earlier, and up from 10.3% compared to 2024/25.&nbsp;&nbsp;



It’s been well documented in previous Southern Ag Today articles that the stocks-to-use ratio is a good predictor of corn marketing year average prices.&nbsp;&nbsp;Thus, the increase in the ratio is expected to result in a decrease in price.&nbsp;&nbsp;In fact, the corn futures market responded with an immediate sharp decline on Monday.&nbsp;&nbsp;The pre-report price of the March corn futures was $4.474/bu, which by close ended the day down 26 cents at $4.214/bu.&nbsp;&nbsp;As a result, most of the gains that had accrued in this contract since the low price of $4.122 was projected on August 12, 2025, have since been returned.&nbsp;&nbsp;The USDA did raise the marketing year price projections for 2025/26 to $4.10, although this is still down 14 cents from the 2024/25 price of $4.24.



Soybean prices were also affected by the WASDE release, with March soybean futures falling 20.2 cents from a pre-WASDE release price of $10.692/bu to $10.49/bu at close.&nbsp;&nbsp;This was on news that soybean supply for 2025/26 is 17 million bushels higher than estimated in December.&nbsp;&nbsp;Yield remained at a record 53 bushels per acre, but harvested acres increased to 80.4 million, resulting in about 9 million bushels of additional production.&nbsp;&nbsp;Beginning stocks for 2025/26 were also adjusted up about 9 million bushels since the prior month estimates.&nbsp;&nbsp;On top of supply increases, total use dropped 43 million bushels, driven largely by a 60 million bushel drop in exports due to higher production and competition from Brazil.&nbsp;&nbsp;The resulting stocks-to-use ratio increased to 8.2% for 2025/26, up from the 6.7% projected in December.&nbsp;&nbsp;The USDA also adjusted the 2025/26 marketing year average price estimate down 30 cents to $10.20/bu.



All was not completely bearish for southern agriculture, though, as Cotton markets remained stable with March futures contracts staying just under $0.65/lb.  The WASDE report showed a lower expected yield of 856 lbs/acre on 7.8 million harvested acres.  This reduced production estimates to 13.92 million bales.  Meanwhile, total use was stable at 13.8 million bales.  The USDA now projects the 2025/26 marketing year average price for upland cotton at $0.61/lb.  The challenge for producers is that this report does not make planting decisions and marketing for 2026 any easier.  With a solid marketing plan, it’s best to avoid reactionary decisions to market movers like this and focus on executing the existing plan (see <a href="https://southernagtoday.org/2026/01/07/a-new-year-a-better-marketing-plan-for-the-farm/">https://southernagtoday.org/2026/01/07/a-new-year-a-better-marketing-plan-for-the-farm/</a>), which should account for the ups and downs in commodity markets.  



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Rabinowitz, Adam. &#8220;<a href="https://southernagtoday.org/2026/01/08/surprise-january-wasde-report-moves-corn-and-soybeans-lower-cotton-flat/">Surprise! January WASDE Report Moves Corn and Soybeans Lower – Cotton Flat.</a>&#8221; Southern Ag Today 6(3.3). January 14, 2026. <a href="https://southernagtoday.org/2026/01/08/surprise-january-wasde-report-moves-corn-and-soybeans-lower-cotton-flat/">Permalink</a>

Surprise!  January WASDE Report Moves Corn and Soybeans Lower – Cotton Flat

Cull cow prices normally decline in the Fall as supplies rise and the weather turns past grilling season.&nbsp;&nbsp;This past Fall, even though total cow slaughter increased from summertime lows, cow prices showed little seasonal decline.&nbsp;&nbsp;The market is starting 2026 much like it finished 2025, with high prices, but will prices be able to increase into mid-year like usual?



Southern Plains auction prices for 85-90 percent lean cows finished the year at $163 per cwt, about where they had been since June.&nbsp;&nbsp;Nationally, cutter quality cows did experience a little seasonal decline, dropping as low as $124 after peaking over $135, but much of that decline was regained during December.&nbsp;&nbsp;Live cow prices bucked the meat market trend, however.&nbsp;&nbsp;The cow beef cutout and 90 percent lean beef both declined a little over 9 percent from September through the end of the year.&nbsp;&nbsp;



Both beef cow and dairy cow slaughter increased from summer lows; the most dramatic increase came from the dairy side.&nbsp;&nbsp;The number of dairy cows in the U.S. increased to more than 9.5 million head, the most since the early 1990s, leading to slightly increased dairy cow culling in the second half of 2025.&nbsp;&nbsp;In the first half of the year, dairy cow culling was down 7.3 percent from the same period in 2024; it was 1.2 percent higher during the second half of the year compared to the previous year.&nbsp;&nbsp;That small increase is reflective of a growing herd with more animals available to be culled.&nbsp;&nbsp;Herd growth has been fueled by earlier profitable milk prices and by the high price of calves, especially those beef and dairy crossbred calves.&nbsp;&nbsp;



Beef cow culling remained very low, down over 17 percent for the year, even though it increased seasonally late in 2025.&nbsp;&nbsp;Beef cow slaughter is likely to remain low in the coming months because of the overall smaller herd and efforts to increase cow numbers.&nbsp;&nbsp;



How much of a seasonal rally from January into June might we expect this year?&nbsp;&nbsp;It’s likely that we’ll have a seasonal rally because beef demand remains good and supplies of lean beef for grinding remain tight.&nbsp;&nbsp;Any significant increase in cow culling will come from the dairy side as very low milk prices hit bottom lines.&nbsp;&nbsp;Beef imports, the majority of which are lean beef trimmings, should remain historically large this year.&nbsp;&nbsp;Although it’s worth noting that imports were slightly lower than the previous year during the August-October period.&nbsp;&nbsp;On balance, cull cow prices should remain in record high territory.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1440" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-1.png" alt="" class="wp-image-43272" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-1.png 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-1-1024x768.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-1-768x576.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-1-1536x1152.png 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1440" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-2.png" alt="" class="wp-image-43273" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-2.png 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-2-1024x768.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-2-768x576.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-2-1536x1152.png 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1440" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-3.png" alt="" class="wp-image-43274" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-3.png 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-3-1024x768.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-3-768x576.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-3-1536x1152.png 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1440" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-4.png" alt="" class="wp-image-43275" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-4.png 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-4-1024x768.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-4-768x576.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/01/6.03.2-4-1536x1152.png 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /></figure>



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Anderson, David. &#8220;<a href="https://southernagtoday.org/2026/01/08/will-cull-cow-prices-increase-this-year/">Will Cull Cow Prices Increase This Year?</a>&#8221; Southern Ag Today 6(3.2). January 13, 2026. <a href="https://southernagtoday.org/2026/01/08/will-cull-cow-prices-increase-this-year/">Permalink</a>

Will Cull Cow Prices Increase This Year?

Knowing how much it costs to produce your product is one of the most important pieces of information for a farmer, rancher, or agribusiness manager. The cost of production provides the foundation for calculating breakeven prices, which impact marketing plans and sales decisions. One effective tool for these calculations is the enterprise budget.



Enterprise budgets are detailed plans that estimate the costs of producing a specific agricultural product or service. An enterprise budget can be created for each crop, livestock, or service that a grower plans to produce during the year. Examples include corn, cotton, peanuts, feeder calves, hay, blueberries, tomatoes, cabbage, and many others. An enterprise budget is typically created on a per-acre, per-head, per-pound, or per-service basis. They are also created for one growing season or production cycle.



One of the first steps in creating an enterprise budget is to estimate costs. There are two types of costs, variable and fixed. Variable costs are use-related and will vary based on the level of production and the amount of input a grower plans to use. Variable costs can include seed, fertilizer, fuel, repairs &amp; maintenance on machinery, labor, pesticides, or feed, depending upon the enterprise being evaluated. Fixed costs are time-based and do not change regardless of the production level. Fixed costs include land ownership costs, interest, depreciation on machinery and equipment, insurance, and taxes.



Once variable and fixed costs are estimated, a grower can calculate their breakeven price. The breakeven price is the price at which costs are covered, and profit is zero. Breakeven price equals total cost (variable + fixed costs) divided by expected yield, as shown in the equation below. The expected yield tends to come from historical data for that farm. Growers can also calculate a breakeven price that covers only their variable costs, the only difference being that you would use variable cost in the equation below instead of total cost..&nbsp;



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Growers who estimate their breakeven price know the minimum price they need to get for their product to cover their costs. It is advised that growers lock in prices above breakeven as part of their marketing plan and sales decisions to give them a higher chance of making a profit.



The land-grant universities throughout our coverage area have enterprise budgets that can be used as a template for growers. These enterprise budgets are representative of the region where they were developed, and individual farm numbers will vary. Producers are highly encouraged to use the budgets as a template and adjust the numbers to reflect their production plans for the upcoming season. This will provide a more accurate estimate of their own cost of production and breakeven prices.



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Smith, Amanda. &#8220;<a href="https://southernagtoday.org/2026/01/08/estimating-cost-of-production-and-breakeven-prices-with-enterprise-budgets/">Estimating Cost of Production and Breakeven Prices with Enterprise Budgets</a>.&#8221; Southern Ag Today 6(3.1). January 12, 2026. <a href="https://southernagtoday.org/2026/01/08/estimating-cost-of-production-and-breakeven-prices-with-enterprise-budgets/">Permalink</a>

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