American farmers to plant more corn, seeking best chance at profits

By Julie Ingwersen

CHICAGO (Reuters) - Farmers in the U.S. plan to plant more corn and fewer soybeans this spring than they did last year, hoping to eke out a profit and shield themselves from U.S. President Donald Trump’s threatened tariffs, growers and analysts said. 

"When you look at relative profitability, corn is winning the acreage battle," said Frayne Olson, an agricultural economist with North Dakota State University.

Some farmers may be able to earn "a nickel or two" on every bushel of corn, Iowa State University economist Chad Hart said. But for soybeans and other crops, prices have fallen below the cost of production. "Right now, given what cost structures look like," Hart said, "corn has the best pathway to make a little profit in 2025."

Planting decisions that are usually finalized in winter help determine the production of corn and soybeans, the top two U.S. cash crops. The grains are primarily used for animal feed, cooking oils and renewable fuels. The U.S. is the world's largest corn exporter and the No. 2 soybean supplier after Brazil. 

Global corn stockpiles are projected to hit a decade low this year, so a big U.S. crop would help replenish inventories, making more grain available to world buyers. Still, more U.S. corn stays in the country than soybeans, making corn a better hedge against tariffs.

A Reuters poll of analysts forecast this week that corn plantings would rise to 93.6 million acres, while soybean plantings would fall to 84.4 million acres.

Growers face a third straight year of dwindling crop revenues, making decisions about what and how much to plant much tougher. Farmers are expected to turn a slight profit in 2025, largely because of government disaster relief, even as income from crops is expected to fall for a third straight year, the USDA forecast this month.

Prices for corn and soybeans, as well as other major crops such as wheat and cotton, are low enough that American farmers will struggle to turn much of a profit with any of them, economists said.

"This year, it's all about what crop is going to lose the least amount of money," said Eric Kroupa, a farmer in central South Dakota who raises corn, soybeans, wheat and cattle.

TRADE TENSIONS

Trump's tariffs against major buyers of U.S. grain may add to corn's advantage while discouraging soybean plantings. The U.S. exports about 40% of its soybean crop each year but only about 15% of its corn harvest, leaving soybean prices more sensitive to trade disruptions.

China is by far the world's top soy buyer, booking more than half of U.S. soybean exports annually, while the customer base for U.S. corn is more varied.

Trade tensions with China flared this month after the Trump administration slapped 10% tariffs on all Chinese imports, and Beijing responded by imposing limited tariffs on a smaller set of U.S. goods, excluding agriculture products. Duties against Mexico, another major buyer of U.S. grains, and Canada, a buyer of U.S. grains, meats and food products, are set to take effect on March 4.

The skirmishes echoed a trade war with China in 2018, during Trump's first term in office, after which China shifted more of its purchases of soybeans and corn to Brazil. For the current marketing year, the USDA estimates that Brazil will supply 58% of world soybean exports, compared to just 27% for the United States.

Farmers often book seed and fertilizer purchases over the winter, well ahead of planting season in April and May. But this year, low prices and uncertainty surrounding trade have prompted at least some growers to delay planting decisions until spring.

"A lot of people won't make final decisions right now,” said Nancy Johnson, executive director of the North Dakota Soybean Growers Association. "The tweaking you do on those last acres will be at the last possible moment, based on what’s happening at that moment."

CORN PRICE RALLY

Corn futures have rallied in recent weeks, signaling profitability for growers. Benchmark Chicago Board of Trade (CBOT) corn futures fell to a four-year low below $4 a bushel in August but climbed back above $5 this month, rising about 9% since January 1.

Soybeans, which produce smaller yields, hit a four-year low below $10 a bushel in December, followed by a more modest rebound.

David Justison, who grows corn, soybeans and wheat on 9,000 acres in south-central Illinois, scaled back his winter wheat acreage last autumn, freeing up about 300 acres where he will probably plant corn rather than soybeans. "It just looks like it might be a little bit better economics," Justison said.

(Reporting by Julie Ingwersen; additional reporting by P.J. Huffstutter. Editing by Emily Schmall and David Gregorio)