In May, the USDA Economic Research Service (ERS) released commodity cost and return estimates for crop and livestock products grown in the United States. These estimates are published twice a year and offer insights into the costs faced by the “average” producer at the national and regional levels across the United States. Additionally, on June 18, ERS released cost-of-production forecasts for the 2025 and 2026 production years. This article uses the ERS data to examine changes in operating costs<a href="applewebdata://1B08DC14-9E49-49EA-BF26-41CA53F143CC#_ftn1">[1]</a>&nbsp;for producers in southern states since 2022, when farm operating costs peaked, and to estimate future cost trends.



Figure 1 compares operating costs for selected crops in 2022, 2023, and 2024 based on ERS data. Note that ERS divides states into farm resource regions for their estimates. The Prairie Gateway includes most of Texas, parts of New Mexico, Oklahoma, Colorado, and Nebraska, as well as all of Kansas. The Southern Seaboard consists of the easternmost counties of Texas, the northwestern counties of Louisiana, the southeastern counties of Mississippi, and most of Alabama, Georgia, South Carolina, North Carolina, and Virginia. Finally, the Mississippi portal covers the eastern parts of Arkansas and Louisiana, along with the western parts of Tennessee and Mississippi.



The data show that operating costs in the southern United States have decreased from their recent highs in 2022; however, they are still significantly above their 10-year averages. The only exception is cotton in the Prairie Gateway states, where increases in ginning costs (due to higher production in 2023 and 2024) and interest costs were enough to offset reductions in other expenses. Table 1 outlines the changes in specific operating costs from 2022 to 2024, explaining why overall costs have decreased since 2022. Unsurprisingly, reductions in operating expenses are mainly due to lower costs for fertilizer, chemicals, and fuel over the past two years.&nbsp;&nbsp;



Unfortunately for producers, the recent decline in operating costs is likely to be temporary. Table 2 presents the ERS forecasts for corn, cotton, peanuts, and soybeans&#8217; operating expenses in 2025 and 2026, alongside the 2024 cost estimates for comparison. The forecasts indicate that operating expenses will remain close to their 2024 level this year and are expected to rise slightly in 2026. Note that the commodity cost forecasts are reported at the national level rather than the regional level. However, regional and national trends are highly correlated in the ERS cost estimates. Therefore, it is reasonable that regional cost forecasts would resemble the national forecast provided by ERS.



Figure 1. Operating Costs ($/ac) for Selected Crops in Southern Regions, 2022-2024 and 10-Year Average



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="972" height="466" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/07/5.28.1-1.png" alt="" class="wp-image-42204" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/07/5.28.1-1.png 972w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/07/5.28.1-1-768x368.png 768w" sizes="auto, (max-width: 972px) 100vw, 972px" /></figure>



Table 1. Change in Operating Costs ($/ac), 2022-2024&nbsp;



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="468" height="128" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/07/5.28.1-2.png" alt="" class="wp-image-42205"/></figure>



&nbsp;Table 2. Estimated and Forecasted Operating Costs, 2024-2026



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="468" height="108" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/07/5.28.1-3.png" alt="" class="wp-image-42206"/></figure>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<a href="applewebdata://1B08DC14-9E49-49EA-BF26-41CA53F143CC#_ftnref1">[1]</a>&nbsp;Operating costs for all crops include seed, fertilizer, chemicals, custom services, fuel/lube/electricity, repairs, purchased irrigation water, and interest on operating inputs. In addition, cotton operating costs includes ginning, and peanut operating costs includes commercial drying.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



<hr class="wp-block-separator has-alpha-channel-opacity"/>



References and Resources



U.S. Department of Agriculture, Economic Research Service. Commodity Costs and Returns data.&nbsp;<a href="https://www.ers.usda.gov/data-products/commodity-costs-and-returns/documentation">https://www.ers.usda.gov/data-products/commodity-costs-and-returns/documentation</a>&nbsp;&nbsp;&nbsp;&nbsp;



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Wright, Andrew. &#8220;<a href="https://southernagtoday.org/2025/06/17/recent-trends-in-farm-operating-costs/">Recent Trends in Farm Operating Costs.</a>&#8221; Southern Ag Today 5(28.1). July 7, 2025. <a href="https://sat-wp.afpc.tamu.edu/?p=42193">Permalink</a>

Recent Trends in Farm Operating Costs

On April 22, 2025, Department of Health and Human Services (HHS) Secretary Robert Kennedy, Jr.&nbsp;<a href="https://www.hhs.gov/press-room/hhs-fda-food-dyes-food.html">announced</a>&nbsp;the agency’s plan to “phase out” petroleum-based synthetic color additives. Though the announcement did not include any formal rulemaking or industry guidance documents, the agency described it as “a significant milestone in the administration’s broader initiative to Make America Healthy Again.” This article will assess where the phase out plan sits roughly two months after its announcement.&nbsp;



Background on synthetic dyes



Color additives are&nbsp;<a href="https://www.fda.gov/food/food-ingredients-packaging/color-additives-information-consumers">defined</a>&nbsp;by the Food and Drug Administration (FDA) as “a dye, pigment or other substance, which is capable of imparting color when added or applied to a food, drug, cosmetic or to the human body.” Color additives are distinguished from food additives by the Federal Food, Drug and Cosmetic Act (FDCA) and require pre-approval from the FDA before they can be used in food. Specifically, there are two types of color additives – naturally occurring and synthetic. Synthetic dyes are manmade, and the FDA requires that each batch of synthetic dye must be certified as safe for its approved purpose. Thus, all food in the US food supply that contains synthetic dyes has been certified by the FDA that the synthetic dye is safe at its approved level for its approved purpose. Synthetic dyes, which are the color additives targeted by this initiative, are typically petroleum-based. There are currently nine synthetic dyes that might be found in food today, and this initiative aims to phase all nine out of the food supply by the end of 2026.



FDA’s stated actions



Specifically, the phase out plan outlined six measures that the FDA will take:



<ul class="wp-block-list">
<li>Establishing a national standard and timeline for the food industry to transition from petrochemical-based dyes to natural alternatives.</li>



<li>Initiating the process to revoke authorization for two synthetic food colorings – Citrus Red No. 2 and Orange B – within the coming months.</li>



<li>Working with industry to eliminate six remaining synthetic dyes – FD&amp;C Green No. 3, FD&amp;C Red No. 40, FD&amp;C Yellow No. 5, FD&amp;C Yellow No. 6, FD&amp;C Blue No. 1, and FD&amp;C Blue No. 2 – from the food supply by the end of next year.</li>



<li>Authorizing four new natural color additives in the coming weeks, while also accelerating the review and approval of others.</li>



<li>Partnering with the National Institutes of Health (NIH) to conduct comprehensive research on how food additives impact children’s health and development.</li>



<li>Requesting food companies to remove FD&amp;C Red No. 3 sooner than the 2027-2028 deadline previously required.</li>
</ul>



Industry “phase out”&nbsp;



The third prong of FDA’s six-pronged phase out plan was to work with industry to eliminate six synthetic dyes – FD&amp;C Green No. 3, FD&amp;C Red No. 40, FD&amp;C Yellow No. 5, FD&amp;C Yellow No. 6, FD&amp;C Blue No. 1, and FD&amp;C Blue No. 2 – from the food supply by the end of 2026. While many were skeptical of the voluntary nature of this plan, in the two months since the announcement, several food companies have announced their intentions to remove synthetic dyes from their food portfolios. For example,&nbsp;<a href="https://news.kraftheinzcompany.com/press-releases-details/2025/Kraft-Heinz-Commits-to-Remove-FDC-Colors-From-Its-U-S--Portfolio-Before-the-End-of-2027-and-Will-Not-Launch-New-Products-in-the-U-S--With-FDC-Colors-Effective-Immediately/default.aspx">Kraft&nbsp;Heinz</a>,&nbsp;<a href="https://www.generalmills.com/news/press-releases/general-mills-announces-plans-to-remove-certified-colors">General Mills</a>,&nbsp;<a href="https://www.conagrabrands.com/news-room/news-conagra-brands-to-achieve-multi-year-modernization-milestone-in-frozen-portfolio-by-end-of-2025-prn-122927">Conagra Brands</a>,&nbsp;<a href="https://www.nestleusa.com/media/pressreleases/eliminate-use-fdc-colors">Nestle USA</a>, PepsiCo, and Tyson Foods have all announced their commitment to removing synthetic dyes from their products.&nbsp;



Part of the reason for the skepticism was that though HHS Secretary Kennedy stated that there was an “understanding” between FDA and food manufacturers at the phase out plan’s&nbsp;<a href="https://www.youtube.com/watch?v=0chZOSIs21Q">press conference</a>, no formal agreement was published, nor was any food industry representative present at the event. Part of the willingness of food industry might have something to do with the movement of this issue on a state level.&nbsp;<a href="https://legiscan.com/CA/text/AB418/id/2839554">California</a>&nbsp;and&nbsp;<a href="https://legiscan.com/WV/text/HB2354/id/3177443">West Virginia</a>&nbsp;have banned foods containing certain food additives from being sold in their state. Additionally,&nbsp;<a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB2316">California</a>,&nbsp;<a href="https://legis.delaware.gov/BillDetail?LegislationId=141908">Delaware</a>,&nbsp;<a href="https://legis.la.gov/legis/BillInfo.aspx?i=247976">Louisiana</a>,&nbsp;<a href="https://wapp.capitol.tn.gov/apps/BillInfo/default.aspx?BillNumber=HB0134&amp;GA=114">Tennessee</a>,&nbsp;<a href="https://legiscan.com/WV/text/HB2354/id/3177443">West Virginia</a>,&nbsp;<a href="https://lis.blob.core.windows.net/files/1038323.PDF">Virginia</a>, and&nbsp;<a href="https://le.utah.gov/~2025/bills/static/HB0402.html">Utah</a>&nbsp;have passed legislation banning school meals from containing certain food additives.&nbsp;<a href="https://legiscan.com/TX/text/SB25/id/3247967">Texas</a>&nbsp;and&nbsp;<a href="https://legis.la.gov/legis/BillInfo.aspx?i=247976">Louisiana</a>&nbsp;have passed legislation requiring disclosure labels on foods containing certain listed food additives – important to note that at the time of writing this article the Louisiana bill has not yet been signed by its governor. This state level inconsistency might have led to a desire by industry for federal movement on the color additive conversation. Specifically, FDA Commissioner Marty Makary, MD, MPH,&nbsp;<a href="https://www.youtube.com/watch?v=0chZOSIs21Q">stated</a>&nbsp;in the press conference that food companies “want to do this,” and that they particularly “don’t want to deal with patchwork of 30 different state plans.”



New Color Additives&nbsp;



The fourth prong of the phase out plan has also seen movement in the past two months. In May, the FDA announced its approval of three new natural color additives. These color additives occur naturally and are not man made, but even natural color additives must be approved as safe for their intended use by the FDA before they can be used in foods.&nbsp;<a href="https://www.law.cornell.edu/uscode/text/21/379e">21 § USC 379e</a>. Here, the FDA has approved Galdieria extract blue, butterfly pea flower extract, and calcium phosphate. Galdieria extract blue produces a blue color and is derived from the unicellular red algae Galdieria sulphuraria. Butterfly pea flower extract is also a blue color and it can be used to produce shades of blue like bright blues, intense purple, and natural greens. Calcium phosphate is a white color approved for use in ready-to-eat chicken products, white candy melts, doughnut sugar, and sugar for coated candies.&nbsp;



Additionally, as part of the six-pronged plan, FDA stated that it would fast track the authorization of four new natural dyes – the three approved here, and gardenia blue. The FDA also said it would accelerate the review and approval of other natural dyes and would issue guidance to industry. So far, the FDA has not published a guidance, nor made any announcements about the approval of gardenia blue or other natural dyes.&nbsp;



Partnership with NIH&nbsp;



The fifth prong in FDA’s phase out plan was to partner with the National Institutes of Health (NIH) to conduct comprehensive research on the effect food additives might have on the health and development of children.&nbsp;<a href="https://www.nih.gov/">NIH</a>&nbsp;is a federal agency housed in the Department of Health and Human Services and is primarily responsible for conducting and supporting federal medical research. On May 9, 2025, the FDA&nbsp;<a href="https://www.fda.gov/news-events/press-announcements/fda-and-nih-announce-innovative-joint-nutrition-regulatory-science-program">announced</a>&nbsp;the creation of a joint research initiative with the NIH, titled the Nutrition Regulatory Science Program. This program will implement a nutrition research agenda that provides “critical information to inform effective food and nutrition policy actions to help make Americans’ food and diets healthier.” Specifically, the initiative highlighted the following questions it will aim to answer:



<ul class="wp-block-list">
<li>How and why can ultra-processed foods harm people’s health?</li>



<li>How might certain food additives affect metabolic health and possibly contribute to chronic disease?</li>



<li>What is the role of maternal and infant dietary exposures on health outcomes across the lifespan, including autoimmune diseases?</li>
</ul>



This joint initiative will mirror the FDA and NIH’s&nbsp;<a href="https://www.fda.gov/tobacco-products/tobacco-science-research/tobacco-regulatory-science-research-program">Tobacco Regulatory Science Program</a>&nbsp;in structure and collaboration with FDA providing expertise in regulatory science and NIH providing the infrastructure for research. FDA states that the initiative will bring together experts in chronic disease, nutrition, toxicology, risk analysis, behavioral science, and chemistry, but is committed to conducting research that is “fair, independent and free of conflicts of interest.”



Remaining prongs



In the past two months, there has been no movement yet on the remaining three prongs of the FDA’s phase out plant. First, the FDA has not published an industry guidance document, promulgated formal rulemaking, nor posted any further documents regarding a national standard and timeline. Second, the FDA has not publicly announced that it has initiated the process for revoking Citrus Red No. 2 or Orange B. Last, though no company who has publicly committed to removing synthetic color additives from its food portfolio specifically mentioned Red Dye 3, it can likely be assumed that it is included under the board definition most are using to describe FD&amp;C dyes.&nbsp;



Conclusion&nbsp;



In only two months, the FDA has moved extraordinarily fast on accomplishing portions of its six-pronged phase-out plan. With an administration that has stated its&nbsp;<a href="https://jamanetwork.com/journals/jama/fullarticle/2835314">commitment</a>&nbsp;to “restor[ing] the focus on the ‘F’ in FDA,” it can be assumed that food-related policies will continue to be a priority.&nbsp;For up-to-date information on FDA announcements, click&nbsp;<a href="https://lp.constantcontactpages.com/su/PDswXKO/TheFeedSignUp">here</a>&nbsp;to subscribe to NALC’s bi-weekly newsletter “The Feed.” &nbsp;To learn more about the phase out plan, click&nbsp;<a href="https://nationalaglawcenter.org/fda-announces-plan-to-phase-out-synthetic-dyes/">here</a>&nbsp;to read NALC article “FDA Announces Plan to ‘Phase Out’ Synthetic Dyes.” To learn more about other FDA updates, click&nbsp;<a href="https://nationalaglawcenter.org/fda-updates-june-2025/">here</a>&nbsp;to read “FDA Updates: June 2025.”&nbsp;



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Stone, Emily. &#8220;<a href="https://southernagtoday.org/2025/06/17/two-months-in-assessing-the-movement-on-fdas-plan-to-phase-out-synthetic-dyes/">Two Months In: Assessing the Movement on FDA’s Plan to “Phase Out” Synthetic Dyes.</a>&#8221; Southern Ag Today 5(27.5). July 4, 2025. <a href="https://sat-wp.afpc.tamu.edu/?p=42184">Permalink</a>

Two Months In: Assessing the Movement on FDA’s Plan to “Phase Out” Synthetic Dyes

As we&nbsp;<a href="https://southernagtoday.org/2024/12/19/congress-poised-to-deliver-vital-aid-to-the-countryside/">noted</a>&nbsp;back in December 2024, the American Relief Act provided $30.78 billion in relief for agricultural producers—$10 billion for economic assistance and $20.78 billion for natural disaster relief.&nbsp;



Signup for the economic assistance—known as the Emergency Commodity Assistance Program (ECAP)—began on March 19, 2025, and runs through August 15, 2025. Initial ECAP payments were factored by 85% to ensure total program payments do not exceed available funding. If all goes as planned, FSA may issue a second payment in August.



USDA has also started rolling out the $20.78 billion in natural disaster assistance. For example, on May 29, 2025, USDA announced that approximately $1 billion in Emergency Livestock Relief Program (ELRP) payments were being issued to affected producers. At this point, anticipation is building for sign-up to begin for the Supplemental Disaster Relief Program (SDRP). SDRP is the successor to the Wildfires and Hurricanes Indemnity Program (WHIP) and the Emergency Relief Program (ERP) summarized in Table 1.



Table 1. Recent History of Natural Disaster Relief for Agricultural Producers



<figure class="wp-block-table aligncenter is-style-stripes has-small-font-size"><table><tbody><tr><td>Program</td><td>Crop Year</td><td>Authorizing Statute</td><td>Enactment Date</td></tr><tr><td>WHIP</td><td>2017</td><td><a href="https://www.congress.gov/115/statute/STATUTE-132/STATUTE-132-Pg64.pdf">P.L. 115-123</a></td><td>2/9/18</td></tr><tr><td>WHIP+</td><td>2018 &amp; 2019</td><td><a href="https://www.congress.gov/116/statute/STATUTE-133/STATUTE-133-Pg871.pdf">P.L. 116-20</a></td><td>6/6/19</td></tr><tr><td>ERP</td><td>2020 &amp; 2021</td><td><a href="https://www.congress.gov/117/plaws/publ43/PLAW-117publ43.pdf">P.L. 117-43</a></td><td>9/30/21</td></tr><tr><td>ERP</td><td>2022</td><td><a href="https://www.congress.gov/117/plaws/publ328/PLAW-117publ328.pdf">P.L. 117-328</a></td><td>12/29/22</td></tr><tr><td>SDRP</td><td>2023 &amp; 2024</td><td><a href="https://www.congress.gov/118/plaws/publ158/PLAW-118publ158.pdf">P.L. 118-158</a></td><td>12/21/24</td></tr></tbody></table><figcaption class="wp-element-caption">Authorizing Statutes are clickable links. </figcaption></figure>



SDRP will provide assistance to producers for necessary expenses related to losses of revenue, quality or production of crops (including milk, on-farm stored commodities, crops prevented from planting, and harvested adulterated wine grapes), trees, bushes, and vines, as a consequence of droughts, wildfires, hurricanes, floods, derechos, excessive heat, tornadoes, winter storms, freeze, including a polar vortex, smoke exposure, and excessive moisture occurring in calendar years 2023 and 2024. While the details will be released by USDA once approved by OMB, following are a few key observations:



<ul class="wp-block-list">
<li>Sign-up Date.&nbsp;USDA has announced a target date of July 7, 2025, for sign-up to begin. While that date may slip a bit as OMB finalizes its review, all indications are that a sign-up announcement is imminent.&nbsp;</li>
</ul>



<ul class="wp-block-list">
<li>Funding.&nbsp;While $20.78 billion was reserved for natural disaster assistance, Congress earmarked $2 billion for livestock (via ELRP), and block grants to states for hurricane relief must also be funded from that total. As a result, the amount available for SDRP will be significantly less than $20.78 billion.&nbsp;&nbsp;</li>
</ul>



<ul class="wp-block-list">
<li>Factoring.&nbsp;When compared against projected losses, there is virtually no question that USDA will have to implement a payment factor.&nbsp;&nbsp;Recall, the Biden Administration noted that—had they implemented a flat payment factor for ERP 2022—it would have been 27%. Their solution at the time was to implement progressive factoring instead, an approach that U.S. Secretary of Agriculture Brooke Rollins has repeatedly rejected. So, while we know there will not be progressive factoring, we do not know what the flat factor will be. Regardless, we’d argue that you shouldn’t get too hung up on the payment factor. Why? USDA will simply estimate projected payments, compare it to available funding, and set the factor accordingly. In other words, if USDA’s approach with SDRP is generous in calculating payments, then it will require a more significant factor to make sure it doesn’t exceed available funding. The most important part to remember is that USDA will be allocating a historic amount of disaster funding in the months ahead…and any payment factor will be applied uniformly to all program applicants.</li>
</ul>



<ul class="wp-block-list">
<li>Sequence.&nbsp;&nbsp;USDA has noted that SDRP sign-up will focus first on those with indemnified losses. USDA is targeting September 15, 2025, to begin sign-up for those with uncovered losses (i.e., shallow losses) including producers without crop insurance, and quality losses.</li>
</ul>



We will provide additional details once SDRP is officially released.



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Fischer, Bart L., and Joe Outlaw. &#8220;S<a href="https://southernagtoday.org/2025/06/17/sign-up-for-natural-disaster-relief-beginning-soon/">ign-up for Natural Disaster Relief Beginning Soon.</a>&#8221; Southern Ag Today 5(27.4). July 3, 2025. <a href="https://sat-wp.afpc.tamu.edu/?p=42189">Permalink</a>

Sign-up for Natural Disaster Relief Beginning Soon

For its first official production estimates of the new crop year, published in the May&nbsp;World Agricultural Supply and Demand Estimates (WASDE), USDA relies on the planted acreage number from the&nbsp;Prospective Plantingssurvey conducted in late February to mid-March and reported at the end of March. Compared to those March survey numbers, the annual&nbsp;Acreage&nbsp;and quarterly&nbsp;Grain Stocks&nbsp;reports released by USDA at the end of June can change those numbers significantly, thus having the potential to be a major market mover.&nbsp;&nbsp;



In the May WASDE (and carried forward unchanged in the June WASDE), USDA estimated 95.3 million acres of corn for 2025 (Table 1) and harvested acres of 87.4 million (91.7% harvest rate).&nbsp;&nbsp;That compares to 90.6 million acres planted in 2024 and 82.9 million harvested (91.5% harvest rate).&nbsp;&nbsp;The average guess by traders ahead of the June Acreage report was 95.2 million corn acres planted.&nbsp;&nbsp;The Acreage report also showed U.S. farmers planted 95.2 million acres of corn for 2025, 100,000 acres below the March survey, but right on the average trade guess.&nbsp;



Also revised in the Acreage report was estimated acres harvested for corn.&nbsp;&nbsp;While acres planted were down only 100,000 from previous estimates, acres harvested were down 600,000. The harvested percentage dropped from 91.7% to 91.1%.&nbsp;&nbsp;



Plugging those numbers into the supply and demand balance sheet from the June WASDE, and leaving all other supply and demand factors unchanged, these new acreage numbers lower corn production for 2025 (and ending stocks) by 114 million bushels (Table 2). With use held steady and a reduction in ending stocks, days of use on hand at the end of the marketing year (a representation of the stocks-to-use ratio) decreases from a 41.3-day supply in the June WASDE down to a relatively tight 38.6-day supply.&nbsp;&nbsp;



June 1 Grain Stocks were estimated at 4.64 billion bushels of corn, 1.01 billion bushels of soybeans, and 851 million bushels of wheat. Corn stocks are down compared to a year ago while soybeans and wheat stocks are higher. Corn disappearance in the period from December 1 to June 1 was a record 7.432 billion bushels, as depicted in Figure 1 as the difference from the December 1 stock to the June 1 stock. Last year, use in that period was 7.174 billion bushels compared to the five-year average 6.937 billion bushels.&nbsp;



Other items in the June USDA reports focused on Soybeans and Wheat.&nbsp;&nbsp;Soybeans came in at 83.4 million acres planted, 100,000 below the March Prospective Plantings and 200,000 below average trader expectations. Soybean acres harvested were revised from 82.7 million to 82.5 million, a 200,000-acre decrease.&nbsp;&nbsp;All wheat at 45.5 million acres was up 100,000 compared to Prospective Plantings and trader expectations.&nbsp;&nbsp;All wheat harvested acres were revised downward by 600,000 acres from 37.2 million to 36.6 million.&nbsp;



Given the numbers reported by USDA in the 2025 Acreage report, production estimates for U.S. corn, soybeans, and wheat will likely be revised lower on fewer harvested acres. However, the Grain Stocks report shows a small decrease in corn carryover and increased carryover of soybeans and wheat relative to trade expectations, implying forthcoming changes in old crop use estimates.&nbsp;&nbsp;Adding old crop ending stock adjustments to new crop production estimates, it looks like the new crop supply numbers got a little tighter for corn and wheat, and a small increase for soybeans.&nbsp;&nbsp;



Table 1. Planted Acreage and Grain Stocks from USDA and Industry Reports



<figure class="wp-block-table is-style-stripes has-small-font-size"><table><tbody><tr><td colspan="6">June 30th&nbsp;Acreage&nbsp;and&nbsp;Grain Stocks</td></tr><tr><td colspan="6">2025 Planted Acres (millions)</td></tr><tr><td>&nbsp;</td><td>Planted</td><td>Average from Experts</td><td>Range&nbsp;from Experts</td><td>March Intentions</td><td>2024</td></tr><tr><td>Corn</td><td>95.2</td><td>95.2</td><td>93.8-96.0</td><td>95.3</td><td>90.6</td></tr><tr><td>Soybeans&nbsp;</td><td>83.4</td><td>83.6</td><td>83.0-85.0</td><td>83.5</td><td>87.1</td></tr><tr><td>All Wheat&nbsp;</td><td>45.5</td><td>45.4</td><td>45.0-46.0</td><td>45.4</td><td>46.1</td></tr><tr><td>Winter Wheat</td><td>33.3</td><td>33.3</td><td>33.0-33.4</td><td>33.3</td><td>33.4</td></tr><tr><td>Spring Wheat&nbsp;</td><td>10.0</td><td>10.1</td><td>9.8-10.2</td><td>10.0</td><td>10.6</td></tr><tr><td>Durum&nbsp;</td><td>2.1</td><td>2.0</td><td>2.0-2.1</td><td>2.0</td><td>2.1</td></tr><tr><td colspan="6">June 1st&nbsp;Grain Stocks (million bushels)</td></tr><tr><td>&nbsp;</td><td>June 1, 2025</td><td>Average From Experts</td><td>Range from Experts</td><td>Mar 1, 2025</td><td>Jun 1, 2024</td></tr><tr><td>Corn</td><td>4,644</td><td>4,648</td><td>4,459-4,955</td><td>8,151</td><td>4,997</td></tr><tr><td>Soybeans</td><td>1,008</td><td>971</td><td>936-1,020</td><td>1,910</td><td>970&nbsp;</td></tr><tr><td>Wheat</td><td>851</td><td>835</td><td>805-852</td><td>1,237</td><td>696</td></tr><tr><td colspan="6">Source: USDA and DTN</td></tr></tbody></table></figure>



Table 2. U.S. Corn Supply and Demand Balance Sheet



<figure class="wp-block-table is-style-stripes has-small-font-size"><table><tbody><tr><td>U.S. Corn</td><td>2024/25</td><td>June WASDE2025/26</td><td>June Acreage2025/26</td></tr><tr><td>Planted Acreage (Mil. Acs.)</td><td>90.6</td><td>95.3</td><td>95.2</td></tr><tr><td>Harvested Acreage (Mil. Acs.)&nbsp;</td><td>82.9</td><td>87.4</td><td>86.8</td></tr><tr><td>Yield (Bushels)</td><td>179.3*</td><td>181.0*</td><td>181.0*</td></tr><tr><td colspan="4">Supply&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#8212;Million Bushels&#8212;</td></tr><tr><td>Beginning Stocks</td><td>1,763</td><td>1,365</td><td>1,365</td></tr><tr><td>Production</td><td>14,867</td><td>15,820*</td><td>15,706*</td></tr><tr><td>Imports</td><td>25</td><td>25</td><td>25</td></tr><tr><td>Total Supply</td><td>16,655</td><td>17,210*</td><td>17,096*</td></tr><tr><td>Disappearance&nbsp;</td><td>&nbsp;</td><td>&nbsp;</td><td>&nbsp;</td></tr><tr><td>Domestic Use</td><td>12,640</td><td>12,785*</td><td>12,785*</td></tr><tr><td>Exports</td><td>2,650</td><td>2,675</td><td>2,675</td></tr><tr><td>Total Use</td><td>15,290*</td><td>15,460*</td><td>15,460*</td></tr><tr><td>Ending Stocks</td><td>1,365</td><td>1,750</td><td>1,636</td></tr><tr><td>Carryover/Use (days on hand)&nbsp;</td><td>32.6</td><td>41.3</td><td>38.6</td></tr><tr><td>Average Farm Price ($/Bu.)</td><td>4.35</td><td>4.20</td><td>4.20</td></tr><tr><td colspan="4">*Record High</td></tr><tr><td colspan="4">Source: USDA World Agricultural Supply and demand Estimates and Acreage 2025</td></tr></tbody></table></figure>



Figure 1. U.S. Corn Stocks, All Positions



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="895" height="604" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/07/5.27.3-F1-1.png" alt="" class="wp-image-42181" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/07/5.27.3-F1-1.png 895w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/07/5.27.3-F1-1-768x518.png 768w" sizes="auto, (max-width: 895px) 100vw, 895px" /></figure>



References:



DTN/Progressive Farmer. “USDA Reports Preview”, June 26, 2025&nbsp;<a href="https://www.dtnpf.com/agriculture/web/ag/news/article/2025/06/26/acreage-stocks-reports-set-tone-us">https://www.dtnpf.com/agriculture/web/ag/news/article/2025/06/26/acreage-stocks-reports-set-tone-us</a>.



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



USDA, NASS.&nbsp;Grain Stocks,&nbsp;<a href="https://usda.library.cornell.edu/concern/publications/xg94hp534">https://usda.library.cornell.edu/concern/publications/xg94hp534</a>.



USDA, Office of the Chief Economist.&nbsp;World Agricultural Supply and Demand Estimates (WASDE),&nbsp;<a href="https://www.usda.gov/about-usda/general-information/staff-offices/office-chief-economist/commodity-markets/wasde-report">https://www.usda.gov/about-usda/general-information/staff-offices/office-chief-economist/commodity-markets/wasde-report</a>.

Market Impact of the June 30 Acreage and Grain Stocks Reports

In recent months, there have been Southern Ag Today articles discussing the impacts of tight fed cattle supplies on prices, cattle on feed, slaughter weights, and total beef production (Anderson 2025a, Anderson 2025b, Maples 2025). Each of the articles mentioned has highlighted the unique and historical differences between the current market and years past. One aspect that has not been covered, but is important, is slaughter capacity utilization (CU). In Martinez et al. (2023), we show how we measure slaughter capacity utilization, which measures the ratio of operational cattle slaughter capacity over physical capacity. Figure 1 displays the monthly national federally inspected (FI) slaughter capacity utilization.&nbsp;



Figure 1. Monthly National Federally Inspected Slaughter Capacity Utilization



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="2158" height="1100" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-1.png" alt="" class="wp-image-42163" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-1.png 2158w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-1-1024x522.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-1-768x391.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-1-1536x783.png 1536w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-1-2048x1044.png 2048w" sizes="auto, (max-width: 2158px) 100vw, 2158px" /></figure>



In May, slaughter capacity utilization averaged 82%, which was lower than May 2024 (88.29%), and the previous 5-year average (87.56%). Additionally, through the first five months of 2025, capacity utilization averaged 84.57%, which is lower than the same time frame last year (86.64%), and the previous 5-year average (88.57%). Historically, in March and April, the ramp up of slaughter for grilling season occurs, followed by a decrease for 1 to 2 months. Thus, the decrease this year from March (86.06%) to May was expected.&nbsp;



While May’s utilization is down 8.29% compared to May 2024, commercial beef production (figure 2) in May was down 7.53% compared to May 2024 and down 4.67% compared to the previous 5-year average. Through May, total commercial production is averaging 497.8 million pounds per month, which is also lower when compared to 2024 (504.95 million pounds per month) and the previous 5-year average (513.12 million pounds per month). When comparing total production, 2025 production is 1.33% lower than last year and 2.98% lower than the previous 5-year average.



Figure 2. Monthly National Commercial Beef Production



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="2158" height="1100" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-2.png" alt="" class="wp-image-42164" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-2.png 2158w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-2-1024x522.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-2-768x391.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-2-1536x783.png 1536w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.2-2-2048x1044.png 2048w" sizes="auto, (max-width: 2158px) 100vw, 2158px" /></figure>



Overall, the decline in 2025 capacity utilization compared to last year (down 2.07%) and the previous 5-year average (down 4%) is larger than the decline in total production compared to last year (down 1.33%) and the previous 5-year average (down 2.98%). Therefore, the increasing utilization difference between 2024 and 2025 signals the impact and realization of the tight supplies on capacity utilization. However, the supply chain is offsetting the tight supplies with larger carcasses and has led to market signals to have lower discounts for heavier cattle while operating at lower capacity utilization. As we get into the second half of the year, it will be interesting to see where capacity utilization and slaughter weights measure given even tighter supplies based on the latest Cattle on Feed reports. 



References



Anderson, David. “Fewer Marketings, Tighter Beef Supplies.”&nbsp;Southern Ag Today&nbsp;5(26.2). June 24, 2025.&nbsp;



Anderson, David. “<a href="https://southernagtoday.org/2025/05/15/working-less-on-friday/">Working Less on Friday!</a>”&nbsp;Southern Ag Today&nbsp;5(21.2). May 20, 2025.



Maples, Josh. “<a href="https://southernagtoday.org/2025/04/09/cattle-prices-hit-new-highs-and-carcass-grading-trends-over-time/">Cattle Prices Hit New Highs and Carcass Grading Trends Over Time.</a>”&nbsp;Southern Ag Today&nbsp;5(19.2). May 6, 2025.



Martinez, C., Li, P., Boyer, C. N., Yu, T. E., &amp; Maples, J. G. (2023). Beef price spread relationship with processing capacity utilization.&nbsp;Journal of the Agricultural and Applied Economics Association.<a href="https://onlinelibrary.wiley.com/doi/full/10.1002/jaa2.48">https://onlinelibrary.wiley.com/doi/full/10.1002/jaa2.48</a>

Beef Slaughter Capacity Utilization

Timber Market Update



The average south-wide stumpage prices for most major timber products remained relatively unchanged in Q1 2025, staying flat or trending slightly downward. Pine sawtimber averaged around $25/ton, slightly below the price a year ago and about 10% lower than its recent high in Q1 2022 (TimberMart-South, 2025). Pine chip-n-saw prices continued to decline, averaging around $17-18/ton, down about 10% year-over-year and 18% below their 2022 peak. Over the past two years, the average pine and hardwood pulpwood prices have stabilized around $7–8/ton, falling from early 2022 highs. One exception is hardwood sawtimber. Its price held better than other timber products, reaching a record high ($35/ton) in Q4 2024 before a modest retreat in Q1 2025.&nbsp;



While overall changes in south-wide averages are minimal, stumpage prices across the region vary greatly by state and subregion, largely depending on local weather conditions, local mill demand, and post-disaster salvage activities. Compared to a year ago, pine sawtimber prices fell sharply in Florida (-25%), declined moderately in South Georgia (-11%) and Louisiana (-8%), but remained stable in Alabama, Arkansas, North Georgia, and Mississippi.&nbsp;



A Closer Look at the Southern Timber Markets



Generally, weak pine sawtimber prices are mainly due to the sluggish housing market. Over 70% of the U.S. softwood lumber and structural panels are used in residential construction, especially in single-family homes, and home improvement activities (Alderman, 2022). Although newly built single-family houses now make up a significantly larger share of for-sale inventory than before the pandemic, their overall supply remains limited. Contributing factors include rising construction material costs, labor shortages, higher financing costs, restrictive zoning regulation, an increase in existing homes for sale (the highest in five years), and declining housing affordability. Uncertainty around tariffs and immigration policy further discourages expansion for homebuilders. In April, single-family housing starts fell to a seasonally adjusted annual rate of 927,000, down 12% from the previous year and the lowest level since July 2024. A slowdown in remodeling and repair activity has also contributed to softer demand for lumber and timber products (JCHS, 2025).



Despite weak demand,&nbsp;southern softwood lumber mill capacity continues to grow,&nbsp;exceeding 28.4 billion board feet&nbsp;in 2024— a 35% increase from 2017&nbsp;(Figure 1)—with an additional&nbsp;753 million board feet by 2026 (Forisk, 2025).&nbsp;Much of this expansion is driven by&nbsp;Canadian lumber companies facing reduced log availability in Western&nbsp;Canada and ongoing U.S. tariffs. The combination of this increased capacity, while current production aligns with weak demand, means lower capacity utilization. Utilization rates of&nbsp;southern softwood lumber mills&nbsp;have declined from 85% in 2021 (Forisk, 2023) to 75% in 2024 due to softer lumber demand (Forisk, 2025; SFPA, 2025).



The decline in softwood and hardwood pulpwood prices reflects the continued closure and conversion of wood pulping mills in the South. In 2024,&nbsp;wood-using pulping capacity in the South continued&nbsp;to shrink, driven by product shifts in the paper and paperboard industries and the increased use of&nbsp;recycled&nbsp;fiber&nbsp;in pulp production (Figure 2). These structural changes are expected to keep pulpwood prices suppressed, especially in areas impacted by Hurricane Helene and recent paper mill closures.



Figure 1. U.S. South Softwood Lumber Mill Capacity, 2013-2024



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="1430" height="1078" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-1.jpg" alt="" class="wp-image-42150" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-1.jpg 1430w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-1-1024x772.jpg 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-1-768x579.jpg 768w" sizes="auto, (max-width: 1430px) 100vw, 1430px" /><figcaption class="wp-element-caption">Data source: Forisk (2025).</figcaption></figure>



Figure 2. U.S. South Wood-using Pulping Capacity, 2013-2024



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="1439" height="1145" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-2.jpg" alt="" class="wp-image-42151" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-2.jpg 1439w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-2-1024x815.jpg 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-2-768x611.jpg 768w" sizes="auto, (max-width: 1439px) 100vw, 1439px" /><figcaption class="wp-element-caption">Data source: Forisk (2025).</figcaption></figure>



Figure 3. Added Softwood Lumber Mill Capacity by State, 2017-2025



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="1240" height="892" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-3.jpg" alt="" class="wp-image-42152" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-3.jpg 1240w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-3-1024x737.jpg 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/06/5.27.1-3-768x552.jpg 768w" sizes="auto, (max-width: 1240px) 100vw, 1240px" /><figcaption class="wp-element-caption">Data source: Forisk (2025).</figcaption></figure>



Looking Ahead



As a leading indicator, single-family housing permits declined by 5.1% in April to an annualized rate of 922,000 units, 6.2% lower than the same time last year. Housing starts are expected to remain weak through the remainder of 2025. This downward pressure, combined with a lingering oversupply of sawtimber from a decade of underbuilding, is expected to weigh on southern timber markets.&nbsp;



The tariff on softwood lumber imports from Canada currently remains at 14.5% but is expected to increase in fall 2025 (NAHB, 2025). Higher tariffs may reduce Canadian lumber imports and promote U.S. domestic production over the long term. However, they could drive up construction costs in the short term, exacerbating already low housing affordability.&nbsp;



Areas that have a recent expansion in mill capacity may see localized increases in sawtimber prices (Figure 3). Counties devastated by Hurricane Helene (e.g., South Georgia) may face tighter timber supply and rising sawtimber prices due to local inventory shortages, particularly in areas with low growth-to-drain ratios (USDA Forest Service, 2024).



References



Alderman, D. 2022. U.S. forest products annual market review and prospects, 2015-2021. General Technical Report FPL-GTR-289. Madison, WI: USDA Forest Service, Forest Products Laboratory.



Forisk. 2023. Regional forest product mill utilization. Athens, GA: Forisk.



Forisk. 2025. Forisk North American forest industry capacity database. Athens, GA: Forisk.



Joint Center for Housing Studies of Harvard University (JCHS). 2025.&nbsp;Leading Indicator of Remodeling Activity (LIRA). Cambridge, MA: Joint Center for Housing Studies of Harvard University.



National Association of Home builders (NAHB). 2025. In win for NAHB, Canadian lumber exempt from Trump’s global reciprocal tariffs.&nbsp;



The Southern Forest Products Association (SFPA). 2025. Lumber shorts. Metairie, LA: SFPA.



TimberMart-South. 2025.&nbsp;Market news quarterly. Athens, GA: TMS.



USDA Forest Service. 2024. Forest Inventory Analysis Program Forest Inventory EVALIDator web-application. St. Paul, MN: USDA Forest Service, Northern Research Station.&nbsp;



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Li, Yanshu. &#8220;<a href="https://southernagtoday.org/2025/06/17/timber-market-remains-sluggish-amid-weakened-housing-starts/">Timber Market Remains Sluggish Amid Weakened Housing Starts.</a>&#8220; Southern Ag Today 5(27.1). June 30, 2025. <a href="https://sat-wp.afpc.tamu.edu/?p=42141">Permalink</a>

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