Farmers May Lose Money on Record Grain Crop
Although it’s been a dry summer, that doesn’t seem to have hurt the U.S. grain crop any — before the government shutdown, USDA was predicting record corn and soybean harvests. But farmers are discovering that grain prices are so low that they may not make back the money they’ve sunk into producing that bumper crop.
There are several reasons for the currently low corn and soybean prices, and they all have to do with export. According to the USDA’s Agricultural Marketing Service, twenty percent of all grain produced in the U.S. is exported, including 42 percent of total wheat production, 42 percent of soybeans, 44 percent of rice and 16 percent of corn.
Fifty percent of U.S.-produced grain destined for export is shipped by barge, predominately on the Mississippi River System. Water levels in the Ohio and Mississippi Rivers are near the low water mark for the fourth year in a row, which both decreases the rate at which grain can be shipped by barge and raises the cost of shipment. Grain elevators pay less for corn and soybeans if it looks like they will have to store the grain longer before shipping it out for export.
Once the soybeans finally make it down the Mississippi to New Orleans, there may be nowhere to send them. That’s because China has drastically cut its imports of soybeans from the U.S. due to the high tariffs imposed earlier this year. China, which used to be the biggest export market for U.S. soybeans, is getting its beans from Argentina and Brazil instead, in addition to restructuring its livestock industry to be less dependent on soybeans altogether.
As the American Farm Bureau Federation says, “Farmers are facing an extraordinary challenge of declining export opportunities, falling crop prices and rising costs….For many farmers, weaker demand abroad is compounding financial strain at home, turning strong harvests into tighter margins.”
Ironically, while conventional soybeans are piling up in farm bins and elevators for lack of a market, the U.S. continues to be a net importer of organic grain. According to the USDA’s Economic Research Service, the U.S. imported $5.7 billion dollars of organic food in 2024. According to the Organic & Non-GMO Report, 37 percent of the organic corn and 74 percent of the organic soybeans consumed in the U.S. in 2016 were imported. From an eco-ag perspective, the solution seems fairly straightforward — more U.S. grain farmers need to transition to organic production to fulfil domestic demand for organic grains, rather than depending on volatile export markets to sell their crops. Transitioning to organic requires a shift in mindset, from production and inputs to soil health and quality, and means growing a more diverse rotation of crops. But if export markets for U.S. grain continue to dry up, it may be the only viable way for farmers currently growing corn and soybeans to save their family farms.
