Iowa farmer Caleb Hamer grabbed his phone and dialed a local corn buyer this week, eager to sell his grain as prices climbed to their highest level in more than a year.
Farmers across the Midwest have boosted crop sales as corn and soybean futures spiked after the U.S. Department of Agriculture slashed its 2024 harvest estimates on Friday, grain dealers in Iowa, Illinois, Indiana, and Nebraska said. Corn prices are now up about 10% over the past month.
The surge came after prices hit 2020 lows last year due to oversupply, which eroded farmers’ incomes and hit the rural economy hard.
The rally still hasn’t made U.S. crop production particularly profitable, though, as prices remain relatively low and the year ahead looks tough. Growers face rising bills for seeds, chemicals, and land rents ahead of the spring planting season, and some economists say the farm sector has entered a recession.
“You’ve got to lock in some sales to guarantee revenue,” Hamer said.
Some growers are also concerned about economic pain if President-elect Donald Trump follows through on plans to slap tariffs on goods from China and Mexico, raising risks for retaliation which could hit U.S. agricultural exports. Another U.S.-China trade war would come at a difficult time for farmers, who have seen net income drop nearly 23% since 2022.
In Illinois, the biggest soybean-producing state and second-largest corn producer, economics for growing both crops remain poor for the third consecutive year, University of Illinois economists said on Tuesday.
“While the rally has improved sales opportunities, it won’t erase this year’s steep losses and does not fundamentally change the bleak profitability picture in row crops,” said Betty Resnick, American Farm Bureau Federation economist.
Ben Scholl, president of specialty grain buyer Lewis B. Osterbur & Associates, said he handled about 20% of his normal annual corn sales in the past four weeks.
At a Green Plains ethanol plant in northern Iowa, trucks hauling farmers’ corn idled along the frozen roads, waiting to unload.
Iowa-based Landus, one of the largest U.S. grain cooperatives, on Monday will urge farmer customers to sell, CEO Matt Carstens said.
“We’re looking at tariffs and the loss of the China market,” Carstens said. “Right now, you just don’t know what the demand side is going to look like this year.”
In Ohio, farmer Chris Gibbs gasped when Cargill staff texted him an offer on Tuesday: $5 per bushel cash for corn for delivery immediately or after April 15.
Local buyers last fall were offering about $4.30, well below his cost of production, Gibbs said. After selling some corn this week, he will have an extra $7,000 in his pocket, enough to cover half his springtime fertilizer bill.
“I have enough cash to feel a little bit of relief,” Gibbs said.
—P.J. Huffstutter and Heather Schlitz, Reuters
