Ep. 67 The State of the Arkansas Crop Economy in 2025

00;00;00;02 – 00;00;21;20
Dr. Hunter Biram
For the third consecutive year, Arkansas crop producers face a situation where total cash expenses exceed total cash income. Prices for major Arkansas crops: corn, soybeans, rice, and cotton, have fallen due to record global supplies and export competition. Arkansas producers are projected to receive roughly $31 million in ARC and PLC payments in 2025, supplemented by significant ad hoc and disaster aid programs.

00;00;21;21 – 00;00;35;24
Dr. Hunter Biram
And today, we had a meeting that we’re going to talk about that and so much more on this episode of Morning Coffee and Ag Markets.

00;00;35;27 – 00;00;51;16
Dr. Hunter Biram
Well, today it is October the 23rd on the recording of this, and we just had a farmer/stakeholder meeting called Farm Gate Economics: Surviving the Cost Price Squeeze. And so we’re going to talk about that and what’s going on in the Arkansas ag economy. But first I want to introduce all the guests. Mr. Grant Beckwith how are you, Grant?

00;00;51;17 – 00;00;52;21
Mr. Grant Beckwith
Doing great.

00;00;52;21 – 00;00;56;01
Dr. Hunter Biram
Good. Nice to have you. And Scott Stiles. Scott, how are you?

00;00;56;02 – 00;00;57;08
Mr. Scott Stiles
Great and glad to be here.

00;00;57;12 – 00;01;04;10
Dr. Hunter Biram
It’s just great to be in person. It’s just different seeing you in person. Normally we’re on Zoom. And then of course, Ryan, how are you?

00;01;04;10 – 00;01;07;05
Dr. Ryan Loy
Doing well, Hunter, how about yourself?

00;01;07;05 – 00;01;28;15
Dr. Hunter Biram
I’m doing great. This is going to be so much fun. I’m so glad that we’re doing this in person. It’s so much more fun in person. So, yeah. So Grant Beckwith is the county staff chair for the Arkansas County Extension Service. And Grant, how about you just introduce yourself to the group, talk about your experience with extension, some of your background, and then just talk about your inspiration and motivation for why you organized this event today.

00;01;28;26 – 00;01;38;26
Mr. Grant Beckwith
I’m Grant Beckwith, staff chair, Arkansas County. I’ve been an ag agent here since 2006, going on about ten years of being staff chair. I got an ag business degree from Fayetteville.

00;01;38;26 – 00;01;40;00
Dr. Hunter Biram
There you go. That’s a good one.

00;01;40;00 – 00;02;15;23
Mr. Grant Beckwith
A master’s of science and ag regulations. Working with farmers, going on, last year harvest, you knew that there is going to be some tough times last winter and everybody had their fingers crossed things would get better. And then, rolled into this year and went the other way. Just lots of red writing on the wall with this coming winter and talking to the producers and everything and just, you know, questions about their land rental rates, the agreements, you know, what’s faired in both sides in this current situation that we’re in. How to address that, how to talk to their land owners if the landowner is absentee and doesn’t understand what’s going on in ag.

00;02;15;24 – 00;02;45;09
Mr. Grant Beckwith
What the situation is, just need some to tools like that on their side to address it and then helping the landowners understand where we’re at and what’s going on. Just talking to farmers in this area, that became apparent. I think I reached out to y’all in August when we set this kind of hopefully at the end of harvest before they start looking toward the banks, the lenders, the ‘26 season, just some information that they could take with them and see where they are and just be better prepared. From the extension side,

00;02;45;19 – 00;03;04;25
Mr. Grant Beckwith
we pride ourselves on unbiased, research-based information, just trying to get the information out to the producers, the landowners, all the interested parties. You know, we had several bankers here today. We had some people here from one of the local co-ops here. You know, they all have an interest in seeing the farmer succeed and do good. And that goes on to the community itself.

00;03;04;26 – 00;03;31;07
Mr. Grant Beckwith
You know, one farmer who just messaged me, said, you know, what we’re going through is not sustainable. And financial well-being is one of the pillars of sustainability, what’s been the buzz word about for years. And what we have right now is not sustainable. You cannot keep doing this. And, you know, going on the second year, looking at third year being the same, you know, how do you go on and try to be one of the ones that come out, on the other end, and what’s going to change in the meantime?

00;03;31;09 – 00;03;38;23
Dr. Hunter Biram
So you mentioned that you’ve been with extension since 2006. So in your roughly 20 years of doing this, how does this compare to what you’ve seen so far?

00;03;38;28 – 00;03;58;19
Mr. Grant Beckwith
This would be the worst financial situation. You know, there’s been some time things got tough and everything, but not like now where it’s the wholesale you look at, if they’re a farmer, you just know that there’s tough times. There’s no well, that one, because this situation’s doing better than that, it’s, you know what they’re having to pay, you know, know what they’re getting.

00;03;58;21 – 00;04;19;20
Mr. Grant Beckwith
And everybody’s pretty close to being in the same boat of not doing good. But this is the worst one. You know, I have heard that this is not close to ‘80 yet, but for this current farming generation, this is their ’80. Hopefully it turns around and gets better at some point. You know around here it was people talk about the summer of ‘80, the older farmers, as being the one that introduced irrigation to the Grand Prairie.

00;04;19;20 – 00;04;43;13
Mr. Grant Beckwith
Rice was irrigated, but beans weren’t. That brought irrigation to the beans. And that was one of the things we talked about. There may be some type of thing that people talk about, the ‘24, ’25, ‘26, you know. We’re making good crops, it’s just, how do we battle the input costs, the costs were getting? And then Mother Nature, I mean, this past year, you look at the crops we made and there was a little time spell in April that we got too much rain, some cool weather.

00;04;43;13 – 00;04;55;05
Mr. Grant Beckwith
You can see it on some crop and some bean yields. And, it hurt, you know. And so, you throw Mother Nature in the mix of everything else. And that’s hers to talk to him about on the Mother Nature. Because that’s one thing that you can’t control. That’s right.

00;04;55;07 – 00;05;06;27
Dr. Hunter Biram
So we’re talking about returns, I mean, negative returns across the board. And, you know, today, one presentation I think Ryan, it was your presentation. You had highlighted those returns. What is going to drive those negative returns?

00;05;07;02 – 00;05;23;06
Dr. Ryan Loy
Well, a big portion of that is going to be that fertilizer price that has just remained sticky. You know, coming through COVID, came down a little bit, but we’ve seen that it’s just absolutely blown out of the water, the last five years, at least. And then at least, last year, it’s not even on the same planet in terms of fertilizer expenses.

00;05;23;06 – 00;05;42;24
Dr. Ryan Loy
So that’s a huge part of that budget, right? And even furthermore, you know, looking at some of the analysis that I put up on presentation today, if you’re in a crop share anything, you know, an 80/20 crop share, you’re looking at 25% higher break even price that you have to receive than if you were to own that land. On the 75/25, that’s about a 33% increase.

00;05;42;24 – 00;05;59;23
Dr. Ryan Loy
And if you’re looking at a $150 cash rent, you’re adding about 20% increase that you’d have to increase on that price. But as we talked about many times, right, farmers are price takers, not price makers. And that becomes very difficult to do, especially in a time like this. This year you look at a couple of the major commodities we grow.

00;05;59;23 – 00;06;20;03
Mr. Scott Stiles
We’re seeing corn prices trend down most of the year. We’re seeing rice prices trend down all year. A lot of times looking back, you would see some correlation between fertilizer prices and grain prices and they kind of move and sync with each other. But we’ve really seen those two go in opposite directions. And maybe, you know, the trade environment that we’re in may have something to do with that.

00;06;20;03 – 00;06;40;06
Mr. Scott Stiles
But lately we’ve been talking about fertilizer prices. They’ve trended higher most of the year, and we’ve seen phosphate prices go back to some really high levels that we saw in early 2022, and that’s kind of where we’re at today. And those prices, you know, have plateaued lately. But they’ve spent the summer going up. So we’ve seen some input

00;06;40;06 – 00;06;51;26
Mr. Scott Stiles
prices continue to trend higher, grain prices lower. And that’s creating the, the cost price squeeze that we talk about is the disconnect between them. You know the inputs and the grain prices go in opposite direction this year.

00;06;51;29 – 00;06;59;08
Dr. Hunter Biram
Yeah, Scott, you know, one thing that I get asked a lot is, so why are the crop prices so low? And so, would you want to provide some commentary on that?

00;06;59;13 – 00;07;15;09
Mr. Scott Stiles
Well, it wasn’t the case here in the Mid-South, but the weather was, you know, perfect for most of the growing season in the, in the Midwest and in the, in the Corn Belt. And it has got off to a great start. And had great weather for most of the year. It did turn dry by August in the Eastern Corn Belt.

00;07;15;09 – 00;07;30;18
Mr. Scott Stiles
And then and then some disease issues showed up late in late in the season in the Western Corn Belt. But for the most part, I mean, it looks like record yields for both corn and soybeans. And that’s, you know, just due to the near perfect weather in the mid, in the Midwest. So, that’s put a lot of pressure.

00;07;30;18 – 00;07;46;26
Mr. Scott Stiles
And we talked to some today about the situation in Brazil and not just Brazil, but South America as a whole. Just back to back record crops there and soybeans and corn cotton. So it’s not just the US supplies are heavy, but the global supplies are heavy for all commodities.

00;07;46;26 – 00;07;53;04
Dr. Hunter Biram
And that’s just talking about this year. But is this like a one year thing? Or do you think that we got multiple years of carry over? […]

00;07;53;07 – 00;08;10;17
Mr. Scott Stiles
We, like we talked about, is that we’ve got at least three consecutive record soybean crops in South America. And if everything goes well this year before world bean stocks are at record levels, rice is pretty close to it. Maybe third highest on record. So inventories are really heavy right now.

00;08;10;18 – 00;08;20;20
Dr. Hunter Biram
You know, Grant, whenever you’re visiting with farmers here in Arkansas County in the, in the Grand Prairie region, I mean, are they talking about storage? I mean, are they talking about and you know, how long they’ve had the grain on hand?

00;08;20;26 – 00;08;39;25
Mr. Grant Beckwith
Yeah, I heard of this one guy this past year, who’s involved in grain merchandising and is talking about, this was in July, about rice, you know, was ready to come into the bins. The bins were still being full of the ‘24 crop. And because the quality of it, having trouble moving it. Guys questioning how much grain is still in the bins on the farms, you know, what’s out there.

00;08;39;25 – 00;08;48;26
Mr. Grant Beckwith
People are talking about also about commodity market, the financial market. Just the rules that you were taught, hey, this is how things should operate. Seem to be out the window right now.

00;08;48;28 – 00;09;01;18
Dr. Hunter Biram
All of the rules are out the window. You know, you brought up that f word financial. Ryan, can you talk a little bit about your commentary on what’s going on with interest rates right now and implications for maybe even securing loans in ‘26?

00;09;01;21 – 00;09;27;20
Dr. Ryan Loy
Yeah. So one of the big things that happened last month, we’re recording this in October, September, last month, the Federal Reserve cut the short term interest lending rate again. First time this year, as a matter of fact. But the expectations going into this year were for several more cuts. And, you know, that would’ve amounted to a percent, a quarter, a percent and a quarter, you know, in total, which would have been very helpful in terms of, you know, securing loans for this year.

00;09;27;20 – 00;09;52;14
Dr. Ryan Loy
Right? But we’ve had some, you know, hiccups. We’ve had inflation that just will not cooperate. And, you know, that’s how the Federal Reserve controls inflation and controls our money supply and controls, you know, tries to help with unemployment as well. And when those two numbers are not agreeing and they’re not going along with because of maybe it’s supply chain hiccups, maybe it’s market expectations, whatever it may be, they have to maintain those rates higher for a little longer.

00;09;52;14 – 00;10;07;15
Dr. Ryan Loy
They’re starting to see the inflation kick up a little bit more. That’s a signal to lower those rates, be less restrictive. They lowered the rates going into next year. As it stands right now. Now I could wake up tomorrow and it could be different. But as it stands right now, the fed expects to make two more cuts this year.

00;10;07;15 – 00;10;28;11
Dr. Ryan Loy
That would amount to another half a percentage point. And so that would bring that down, for the year about three quarters of a percent. That doesn’t sound like a lot, but it is significant when you’re talking about how closely related that interest rate is to the operating note that a farmer would get. It’s going to follow that pattern, and it’s going to fall a little bit if those rates are cut on the short term lending side, of course.

00;10;28;11 – 00;10;39;16
Dr. Ryan Loy
And so going into next year keep an eye on what the Fed’s doing. And you know, talk with your lender about variable rates versus fixed rates and what kind of environment you’re in. And what you should kind of do. And those are those are the kind of things to look out for.

00;10;39;19 – 00;10;48;03
Dr. Hunter Biram
I know we take a historical perspective just in the past few years. Do you know, off the top of your head about how much the interest expense has changed with this interest rate environment?

00;10;48;04 – 00;11;10;22
Dr. Ryan Loy
Yes. Compared to I think I take, 2022, the second quarter of 2022, I think it was 2022, might be 2021. But looking at what the interest rates are on average for operating loans in quarter two of this year, you’re talking at minimum a $15 per acre increase in that interest expense. Not doing anything different, just like you were talking about the rules that you’re supposed to follow and you’re not doing anything different.

00;11;10;22 – 00;11;28;11
Dr. Ryan Loy
You’re doing everything correct. But now you’re now paying. If you have a thousand acre farm, right, that’s a $15,000 additional expense you’ve got to account for across all your acreage. And so that’s something to just really consider in terms of what you would have gotten money for at that time versus where you’re at now and where it could be heading as well.

00;11;28;13 – 00;11;43;06
Mr. Scott Stiles
And that impact might be greater on the higher end. But crops like, you know, you, you know, it’s just an average but, you know, several hundred dollars an acre difference between growing and an acre of soybeans and growing an acre of rice. That’s right. Double the input cost. Double the input. That’s right. Has more of an impact.

00;11;43;22 – 00;12;00;08
Dr. Hunter Biram
You know, one thing that’s starting to creep up again, and this is just for the audience out there, you know, as of today, the president has reopened USDA-FSA offices, and there’s going to be two paid staffers at each office, primarily to make sure that folks are getting their ‘24, ’25 ARC and PLC payments, which for Arkansas amounts to about $31 million.

00;12;00;08 – 00;12;20;19
Dr. Hunter Biram
But in this loan space, in this finance space, something else that farmers are wanting to get right now is marketing assistance loans or loan deficiency payments. And, you know, Scott, I wanted to ask your historical perspective or like what you’ve what you’ve heard about with marketing assistance loans. I mean, to me, it’s something I hadn’t really thought much about, but it seems like folks are asking more questions about it.

00;12;20;23 – 00;12;25;24
Dr. Hunter Biram
I mean, historically, have you worked with farmers much or have any questions on marketing assistance loans, or?

00;12;25;25 – 00;12;45;19
Mr. Scott Stiles
Last, you know, few years we hadn’t had much discussion about it. I think now it’s probably, it’s something that has come back in vogue that hadn’t been talked about a lot and you know and now, you know cash flow is of the essence. And I think that’s placed some importance on the marketing loan program as a way for growers to generate cash flow and, and wait for the markets.

00;12;45;19 – 00;13;05;20
Mr. Scott Stiles
Maybe the, you know, growers are waiting for a trade deal… and I think that that’s, you know, part of the incentive is that it buys you some time and, it will create, create some immediate cash flow at a lower cost. And we can kind of wait and see how the trade discussions progress, you know, through the balance of this year. Might be a good, you know, a good way to utilize the marketing loan program.

00;13;05;27 – 00;13;25;15
Dr. Hunter Biram
And so one of the last notes here, we’re talking about trade and the trade discussions. Do either one of y’all want to comment on… I really liked what y’all talked about with how you compared the Brazilian exports with Chinese imports and global imports, less China and just kind of, I guess, market opportunities for trade. Did either one of y’all want to take that?

00;13;25;15 – 00;13;41;06
Dr. Ryan Loy
Well, I think kind of just to sum it up, not to go through every, you know, number. And Scott was… Scott did a great analysis today. When you look at what China demands and what Brazil and what really South America, I mean, Paraguay, Uruguay, Argentina and Brazil, what they can supply China is more than enough, right?

00;13;41;06 – 00;14;00;21
Dr. Ryan Loy
Than what they need. They’ll have some left over. And the rest of the world, what they demand, they can fill that gap a little bit. And the rest, hypothetically, would hopefully come to us. And so not to trivialize it too much, but when you look at the dollar amounts, you know, on the soybean market, you know, that $10 billion difference between what China buys and what second place European Union buys.

00;14;00;21 – 00;14;17;26
Dr. Ryan Loy
And when you put it from the perspective of how Scott presents it, it doesn’t necessarily look like the sky is falling as much as, as much as it may look at first glance. Now it’s a serious situation, and one doesn’t want to trivialize it by any means. But when you really break it down and look at what is available for other countries, I think there’s opportunities there.

00;14;17;28 – 00;14;28;18
Dr. Hunter Biram
And if I remember, Scott, you put up on a slide that USDA was projecting one number for exports, and then with the back of the envelope math that y’all did, it almost matched up. What was it, like 50 million?

00;14;28;18 – 00;14;46;25
Mr. Scott Stiles
It was 58 million bushels. They’re really close. And but you know, again that that might be offset by, you know, a future yield reduction. So maybe it may not go directly to ending stocks. So that was my point there is that, you know, that 58 million bushel difference may, you know, might not get tacked on the ending stocks if

00;14;46;25 – 00;15;07;04
Mr. Scott Stiles
we see some drop in production. We may see that. Yeah. I mean, we may you know, it remains to be seen. We may capture some of, you know, Chinese import demand. But we’re running out of time. We’re just going to have basically, December, January, we may be able to cover some of their import needs in this last, really, two months of our export window.

00;15;07;05 – 00;15;14;08
Mr. Scott Stiles
Yeah. And that’s really what we’ve got left at this point. So, hopefully something will get worked out. We’ll get some of that. Some of that business, maybe not.

00;15;14;13 – 00;15;17;19
Dr. Hunter Biram
Yeah, right. Well any other comments from the peanut gallery?

00;15;17;21 – 00;15;41;09
Mr. Grant Beckwith
Just as far as looking forward to next year. You know, this year go to your local extension office. You know, don’t just go out, start slashing things out of your budget. Soil samples. Make sure you get current soil samples. We got the potash rate calculator. You could do foliar analysis next summer. You know, things like that to be smart with your money and try to make sure you put it where it needs, not putting extra on.

00;15;41;09 – 00;15;46;16
Mr. Grant Beckwith
And just talk to your local county agent about what you can, what you can’t cut, and or how and how to go about the best approach.

00;15;46;23 – 00;16;01;28
Dr. Hunter Biram
I think I couldn’t put it any better myself. I agree, you know, we got to be managing our costs, managing our, you know, managing our budget very well, knowing what our budget is, making a budget and so on. I appreciate that, Grant. And so with that, we will sign off and y’all stay tuned for the market report.

00;16;02;00 – 00;16;31;24
Market Report
Now back with your market report as of October 23rd, 2025. Corn December 2025 future price is $4.28 a bushel, slightly up from a month ago, which was $4.26, and a year ago, which was $4.22. Rice November 2025 futures are currently $10.24 a hundredweight. That’s down from a month ago, which was $11.48 and down from a year ago, which was $15.04.

00;16;31;26 – 00;17;04;04
Market Report
Soybeans November 2025 are at $10.45 a bushel. That’s up from a month ago when they were at $10.12 a bushel, and a year ago when they were priced at $9.96 a bushel. Cotton December 2025 futures are 64.07 cents a pound. That’s slightly down from a month ago, when the price was 66.64 cents a pound, and down from a year ago, which was at 71.53 cents a pound. Wheat July 2026 futures are priced at $5.50 per bushel.

00;17;04;07 – 00;17;28;04
Market Report
That is a bit down from the price a month ago, which was $5.62 and down from a year ago, which was $6.15 per bushel. Due to the government shutdown, weekly reporting of peanut prices by USDA has been temporarily suspended. A month ago, the US weekly average for peanuts was at $482 a ton, and a year ago, the weekly average was at $486 a ton.

00;17;28;06 – 00;17;57;21
Market Report
Arkansas Highway diesel costs are currently averaging about $3.30 a gallon. A month ago, that was $3.36. A year ago that was $3.30 a gallon. Arkansas farm diesel cost for a 7000 gallon tanker load are currently averaging $2.60 per gallon. A month ago, that was $2.53, and a year ago that was $2.60. Moving on to our fertilizer prices, urea is currently priced $535 a ton.

00;17;57;23 – 00;18;27;03
Market Report
A month ago, that was $558 a ton, and three months ago was $558 a ton. Ammonium nitrate is currently $434 a ton. A month ago was $450 a ton, and three months ago it was $398 a ton. Ammonium sulfate is currently about $493 a ton. A month ago, it was $522 a ton. Three months ago, ammonium sulfate was $540 a ton.

00;18;27;06 – 00;18;59;07
Market Report
DAP is currently about $943 a ton. A month ago, it was $951 a ton. Three months ago it was $828 a ton. Triple Super Phosphate is currently $803 a ton. A month ago was $835 a ton, and three month ago it was $715 a ton. Potash is currently averaging about $470 a ton. A month ago was about $471 a ton, and three months ago it was $450 a ton.

00;18;59;10 – 00;19;13;04
Market Report
The Mississippi River level at Memphis is currently at -8.08ft. A year ago it was at -8.77ft. Thanks so much for tuning in. Have a great week, and don’t forget to tune in for another episode next Monday.