Crop production and economics
Nathan invited the public to connect with the UMN Agricultural Business Management Team: https://extension.umn.edu/managing-farm. You will find useful information on rental rates, crop budgets, and the Farm Bill.Nathan Hulinsky began the program with a look at Minnesota’s total agricultural row crop production. He shared 2023, 2024, and 2025 crop production data to demonstrate the scale of each crop produced within the state. The national rankings for Minnesota crops are impressive:
- Corn (#4)
- Soybeans (#3)
- Hay (#10)
- Wheat (#3)
- Sugar beets (#1)
- Dry beans (#2)
- Oats (#1)
- Canola (#4)
- Sunflowers (#3)
- Rye (#5)
- Barley (#8)
- Potatoes (#9)
- Maple syrup (#11)
Table 1. Estimated USDA yields and planted acreage for major Minnesota crops in 2025.
| Crop | Estimated yield |
Estimated MN acreage (million acres) |
|---|---|---|
| Corn | 201 bu/a | 8.9 |
| Soybean | 52.5 bu/a | 7.15 |
| Hay | 3.34 tons/a | 1.28 |
| Spring wheat | 69 bu/a | 1.15 |
Know your cost of production
Nathan next shared cost of production data from the UMN Farm Financial Database (FINBIN). The most current FINBIN year available is 2024 as 2025 is being finalized. This database represents ten percent of all Minnesota crop producers and is an excellent representation of the health of the agricultural economy.The average 2024 MN crop producer spent $4.71, $11.02, $6.26 per bushel to produce corn, soybeans, and spring wheat, respectively. The 2024 costs of production exceed current local cash prices. Cost of production has come up significantly in recent years - for example the MN average cost of production was $8 for a bushel of soybeans in 2020. Cost categories such as fertilizer, machinery, chemical, fuel, etc. all account for this increase.
Nathan demonstrated there is a significant spread between the highest cost of production and lowest cost of production in MN farms. Knowing your personal cost of production is critical to identify profitable sales levels, as well as possible areas to decrease costs. Producers looking to trim costs sustainably should reference Brad Carlson’s article “Are you Overspending on Fertilizer” https://blog-crop-news.extension.umn.edu/2024/04/are-you-overspending-on-fertilizer.html
Nathan next described the Farm Bill as an omnibus piece of federal legislation that is renewed by Congress roughly every five years to govern agricultural, food, and conservation programs. The Farm Bill has an annual spending budget of $140 Billion and is comprised of 12 different “Titles” or sections. A majority of the Farm Bill payments go to Title 4 Nutrition Programs like food stamps, WIC (Women, Infants, and Children), SNAP (Supplemental Nutrition Assistance Program), etc.
Farm profitability
What if we go back farther in history to look at the profitability of Minnesota crop farms? FINBIN data from the last 25 years on median net farm income in MN showed the 2000’s ethanol boom and the early 2010s profitable years which were followed by tight margins in the late 2010s. Median net farm income was strong in 2021 and 2022, but income dropped in 2023 and 2024. Unfortunately, inflation adjusted median income was $2400 in 2024. This is the lowest median net income for MN farmers in the 25 years shown. Comparing regional MN net farm income 2023 into 2024, only northeast and southeast MN counties had a net farm income increase; all other regions showed a net farm income decrease. Overall FINBIN data shows slim 2024 profit margins for crop producers in all MN regions.Financial relief
Consequently, Nathan next discussed avenues for financial relief. Announced in 2025, the Farmer Bridge Assistance program has allocated a national total of $11 Billion dollars. Payments will be made on a per acre amount based on 2025 planted acres, covering up to 35% of the expected loss for the planted crop. Some of the acre payment amounts were: Corn $44.36, soybean $30.88, spring wheat $39.35, and oats $81.75. It is noteworthy that MN is the number one state nationally in oat production.Nathan next described the Farm Bill as an omnibus piece of federal legislation that is renewed by Congress roughly every five years to govern agricultural, food, and conservation programs. The Farm Bill has an annual spending budget of $140 Billion and is comprised of 12 different “Titles” or sections. A majority of the Farm Bill payments go to Title 4 Nutrition Programs like food stamps, WIC (Women, Infants, and Children), SNAP (Supplemental Nutrition Assistance Program), etc.
Title 1 Farm Bill programs
Nathan continued by discussing Title 1 programs in the Farm Bill such as Dairy Margin Coverage (DMC), ARC and PLC. Programs like Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) are calculated by “base acres” and not on actual crop planted acres by year. Minnesota has 16.5 million acres enrolled in Title 1 programs, and there are 242 million base acres nationally.OBBBA provisions
The One Big Beautiful Bill Act (OBBBA) passed in July of 2025 had many important changes for crop producers that historically had been addressed in the Farm Bill. The first is the annual total payment limit was raised from $125k to $155k. All persons in an entity or farming LLC are now eligible for the new annual limit, as opposed to a single payment limit for the entity in the past.
Another change is that the ARC and PLC grain market reference prices will increase 0.5% annually after 2031. Additionally, in 2025, farmers will get the higher of ARC and PLC. 2026 Farm Bill sign up for ARC and PLC has not yet been released and congressional representatives stated that 2026 yields may report before sign-up opens this fall. In other words, producers will enroll in ARC or PLC after the numbers are known for 2026 as opposed to the traditional February sign-up period. Also, up to 30 million new base acres may be added nationally, to the existing 242 million currently in the Farm Bill.
The OBBBA had additional changes benefitting crop producers. ARC now has a revenue guarantee at 90%, which was 86% previously. Max payments for ARC-Co are 12% of average revenue, up from 10%. Taken together this results in an 8% increase in potential payment for ARC-Co. Crop producers can also now use Supplemental Coverage Option (SCO) with ARC, though this change may be short-lived. All crop commodity reference prices had a 10%-20% increase in the OBBBA over the 2018 Farm Bill. Sign-up for many of these programs is not available yet; however, Dairy Margin Coverage (DMC) sign-up is currently open for risk management in dairy production.
Nathan Hulinsky is a University of Minnesota Extension Educator in Agricultural Business Management. He can be contacted at huli0013@umn.edu.
The OBBBA had additional changes benefitting crop producers. ARC now has a revenue guarantee at 90%, which was 86% previously. Max payments for ARC-Co are 12% of average revenue, up from 10%. Taken together this results in an 8% increase in potential payment for ARC-Co. Crop producers can also now use Supplemental Coverage Option (SCO) with ARC, though this change may be short-lived. All crop commodity reference prices had a 10%-20% increase in the OBBBA over the 2018 Farm Bill. Sign-up for many of these programs is not available yet; however, Dairy Margin Coverage (DMC) sign-up is currently open for risk management in dairy production.
Nathan Hulinsky is a University of Minnesota Extension Educator in Agricultural Business Management. He can be contacted at huli0013@umn.edu.
Buckle up for the markets!
The title of Frayne’s presentation was: “Buckle Up! 2026 Crop Market and Trade Outlook.” He expanded on Nathan’s presentation to look globally at domestic and international grain markets. Frayne started with the years 2000 to 2025 United States planted acreage for major crops – corn, soybeans, wheat, alfalfa hay, cotton, sorghum, barley, and rice. There was a very close mirror relationship between annual corn and soybean planted acres. Corn planted acres increased significantly into 2025 and there was a corresponding decrease into 2025 soybean planted acres. Market analysts and traders predict a reversal in this planted acres trend for 2026 with a decrease in year-over-year corn planted acres and a corresponding increase in soybean planted acres.National corn production levels
Total 2025 United States corn production established a new national record for total bushels, surpassing the previous record yield by 1.7 billion bushels. To put this in perspective, Frayne shared that this corn surplus is about the same as the total annual size of the United States wheat crop. Frayne showed US corn supply and demand numbers from the USDA World Agricultural Supply and Demand Estimates (WASDE) monthly reports. The 2025 corn crop produced for the 2025/2026 marketing year was a record 17 million bushels, up from 14.9 million bushels in 2024/2025 and the previous record yield of 15.3 million bushels in 2023/2024. USDA estimates are locked in with no significant changes expected to the production numbers.So what are we going to do with all this corn from 2025? Our focus changes to the total use or consumption numbers going forward. Frayne followed this discussion with a look at the ending grain stocks in storage compared to annual corn consumption, called the stocks to use ratio. Low ending stocks tend to lead to higher prices and more price volatility while higher corn ending stocks drive the opposite market conditions. Inventory of corn by the end of 2025/2026 marketing year is projected to be higher than historical averages. Therefore, we shouldn’t expect price shocks to raise the corn price. Global stocks of corn also look strong and buyers of corn are in the driver's seat.
Corn demand is up
How do we use all this corn? Frayne shared that corn demand is up at least to the degree of increased stocks. Feed uses of corn are strong, even above historical highs in the early 2000s. Ethanol uses show fairly stable corn consumption across recent years. Because gas prices are down, this indicates no incentive for ramped up ethanol production but corn uses for ethanol should remain stable. Therefore, the biggest increase in corn consumption is projected from exports.Frayne shared the US corn export sales for the last four marketing years. Mexico is the largest customer for US corn and they have increased buying from the US significantly year-over-year. More calves are being fed in Mexico due to the new world screwworm outbreak. These cows which were typically finished on feed in the United States will now need to be finished in Mexico due to the cattle biosecurity blockade. Total US corn exports to the globe are 30% above last marketing year's pace in corn, and last year was a record. The takeaway is other countries have more than made up for soft Chinese buying of United States corn to start this marketing year.
Frayne finished his discussion on corn looking at the technicals on the CBOT 2026 March Corn chart. The corn market has recovered somewhat from a drop after the USDA report on January 12, 2026 showed increased 2025 production of corn to previous reports. Technicals indicate a sideways trading pattern going forward. The current situation looks very different from the 2020-2023 charts when tight corn inventory levels caused large swings in the nearby corn prices. We are now in an environment with less volatility, similar to 2015 - 2020 when nearby corn prices traded within a tight range for five years. Buyers can afford to be picky and large price swings are unlikely.
United States soybean export sales for the last four years were shown. Top buyers China and Mexico are down in pace of sales marketing year to date. China has met the 12 million metric ton target from the last trade agreement. However, Frayne’s chart showed the WASDE number is 9.5 million metric tons for China this soybean marketing year. He explained that some of the “Rest of World” sales captured in the WASDE report go through an international broker but ultimately end up in China. This is classified as an unknown sale and cannot officially be credited to China by the USDA. Unfortunately, the total US export volume in soybeans is expected to decrease by a larger magnitude than the increase in domestic crush for this marketing year.
Frayne shared that the seasonality of soybean sales are very cyclical. United States exports spike during harvest months starting in September through the end of the calendar year. By January and February, fresh Brazilian harvest takes the stage. The US soybean 2025/2026 marketing year has been soft compared to the last four soybean marketing years in terms of metric tons shipped. The reason we are seeing an up day in soybeans today (January 28, 2026) is weather related news – dry weather conditions causing crop stress in Argentina. Argentina does not sell a lot of whole soybeans to the globe - they crush domestically and sell soybean oil and meal. Additionally, the drought is not currently affecting the main soybean production areas of Brazil. Therefore, Frayne was not convinced that this weather news will lead to a lot of new export sales of whole beans for the United States soybean market and a sustained price rally. The last soybean content was the CBOT 2026 March Soybean futures table. A little more volatility in soybeans than in corn currently but the chances of a rally for United States soybeans decrease as we enter into the Brazilian harvest season and a sideways trading pattern is predicted.
Dr. Frayne Olson is a professor in the Department of Agribusiness & Applied Economics at North Dakota State University. He can be reached at frayne.olson@ndus.edu.
It was great to host both our speakers on the program and we hope to have them back again soon for an Agricultural Economics update. The next session of Strategic Farming: Let’s Talk Crops will be Wednesday February 11 at 9 am with Extension educators Ryan Miller and Anthony Hanson to discuss what's new in forecasting tools for crops and pest management.
Frayne finished his discussion on corn looking at the technicals on the CBOT 2026 March Corn chart. The corn market has recovered somewhat from a drop after the USDA report on January 12, 2026 showed increased 2025 production of corn to previous reports. Technicals indicate a sideways trading pattern going forward. The current situation looks very different from the 2020-2023 charts when tight corn inventory levels caused large swings in the nearby corn prices. We are now in an environment with less volatility, similar to 2015 - 2020 when nearby corn prices traded within a tight range for five years. Buyers can afford to be picky and large price swings are unlikely.
Soybean situation
Frayne also prepared a robust discussion on United States soybean supply and demand. United States production of soybeans is more stable than corn taken year over year. The big soybean story is exports. Stocks-to-use ratio in soybean is currently comfortable – not tight nor excessive - and somewhat neutral when taken against historical data. The crush volume of soybeans in the United States continues to increase year-over-year with existing plants running at capacity and new plants in the Dakotas and other areas which are coming online. This domestic crush increase is good news for soybean producers.United States soybean export sales for the last four years were shown. Top buyers China and Mexico are down in pace of sales marketing year to date. China has met the 12 million metric ton target from the last trade agreement. However, Frayne’s chart showed the WASDE number is 9.5 million metric tons for China this soybean marketing year. He explained that some of the “Rest of World” sales captured in the WASDE report go through an international broker but ultimately end up in China. This is classified as an unknown sale and cannot officially be credited to China by the USDA. Unfortunately, the total US export volume in soybeans is expected to decrease by a larger magnitude than the increase in domestic crush for this marketing year.
Frayne shared that the seasonality of soybean sales are very cyclical. United States exports spike during harvest months starting in September through the end of the calendar year. By January and February, fresh Brazilian harvest takes the stage. The US soybean 2025/2026 marketing year has been soft compared to the last four soybean marketing years in terms of metric tons shipped. The reason we are seeing an up day in soybeans today (January 28, 2026) is weather related news – dry weather conditions causing crop stress in Argentina. Argentina does not sell a lot of whole soybeans to the globe - they crush domestically and sell soybean oil and meal. Additionally, the drought is not currently affecting the main soybean production areas of Brazil. Therefore, Frayne was not convinced that this weather news will lead to a lot of new export sales of whole beans for the United States soybean market and a sustained price rally. The last soybean content was the CBOT 2026 March Soybean futures table. A little more volatility in soybeans than in corn currently but the chances of a rally for United States soybeans decrease as we enter into the Brazilian harvest season and a sideways trading pattern is predicted.
Dr. Frayne Olson is a professor in the Department of Agribusiness & Applied Economics at North Dakota State University. He can be reached at frayne.olson@ndus.edu.
Audience questions
The guest speakers finished their presentation by fielding audience questions.Why is the local cash basis worse?
The first question was for Frayne Olsen about local cash basis on soybeans. The nature of the question is that soybean basis has been worse locally this marketing year so far compared to past years, but could change to smaller basis and better net cash price be anticipated. Dr. Olsen said that this was unfortunately not likely based on the market situation currently. Shipping northern-grown soybeans to the PNW is more costly than Gulf soybeans and is also more likely to be purchased by China which has had soft buying.Why are bridge payments for oats so high?
The second question asked why the magnitude of payments for oats was around $80 for the Farmer Bridge Assistance program, a high value compared to other crop payments. Nathan Hulinsky answered that the barley payment was, like all crops, calculated based on average net revenue minus average net input costs to find the expected loss dollar amount per acre. The payment level was then calculated as 28-35% of the average loss dollar amount per acre. Oats had the highest dollar amount payment as they had the highest dollar amount expected loss at $240 per acre.Any expected diversification in crop acreage?
The third and final question was if there was any expectation to see corn and soybean planted acres transition to other crops, and in a sense break the dichotomy of corn-soybean rotations. Frayne answered that we are going from 98.8 million planted acres corn in 2025 to a projected 95 million planted acres corn in 2026. Soybean will go from 81 million planted acres in 2025 to projected 85 million planted acres in 2026. Wheat will slightly decrease from 45 million planted acres in 2025 to a projected 44 million acres. North Dakota farmers have been saying corn doesn’t look great, but wheat is even tougher. Frayne cautioned that if people start shifting quickly into smaller market crops like canola, dry beans, and oats that can easily flood the market and disrupt contracts. Malting barley is another market that can be easily flooded. For more southern US producers, cotton and sorghum are also not going to see acreage increases based on their tough economics as well. Nationally for row crops, there is no clear favorite as far as profitability to drive planting intentions.It was great to host both our speakers on the program and we hope to have them back again soon for an Agricultural Economics update. The next session of Strategic Farming: Let’s Talk Crops will be Wednesday February 11 at 9 am with Extension educators Ryan Miller and Anthony Hanson to discuss what's new in forecasting tools for crops and pest management.
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