Basis Prices

Farmers Face Budget Squeeze And Balance Sheet Challenges—Echoes Of A Decade Ago

Tue, 30 Dec 2025 21:13:24 GMT

If heading into 2026 feels a little like déjà vu, you’re picking up the same vibes Chris Barron, president and CEO of Iowa-based Ag View Solutions, is experiencing. He believes the next couple of years will echo the last big downturn farmers weathered a decade ago.

“It’s kind of scary that 2025, ’26 and ’27 look essentially like a repeat of 2015, ’16 and ’17,” Barron says. “If you remember that time frame and made it through, buckle down because I think we’re going there again.”

He says one of the clearest signals farmers are about to experience a repeat of a decade ago is based on the 2026 cost-of-production data from Ag View Solutions’ clients, who are based in 23 U.S. states and three Canadian provinces:

Soybeans: About $11.87 per bushel based on a 65-bu. average yield
Corn: About $4.69 per bushel (before basis) on a 223-bu. average, with many growers needing at least $4.85.

Some growers raising non-GMO seed beans or getting premium contracts can still make soybeans compete. But for many farms, soybeans are the weak link in the current economic cycle.

Right now, Ag View Solutions clients are expected to plant roughly 62% of their acres to corn and 38% to soybeans for 2026 — essentially the same as 2025. Barron says he doesn’t expect many acres to shift away from this mix to more soybeans “unless something really changes.”

Given current price relationships and crop insurance guarantees, Ag View Solutions data shows about a $50-per-acre advantage to corn over soybeans for the year ahead. Even if the dollars trend lower, he says corn often pencils out better because of gross revenue and risk management tools.

More Cost Pressures Heading Into 2026

It’s no secret production costs are increasing heading into the next season. Some of the key factors include:

Overhead costs (what Barron calls ‘”return to management”) for family and employee expenses, including phones, fuel and business-paid personal expenses, are up nearly 5%. After the past year or two of what Barron describes as hard belt-tightening, he says deferred spending is “snapping back” at higher levels.

Land rents are holding mostly steady, supported by higher property taxes and outside investor demand.

Interest expense is climbing as operating lines grow.

Fertilizer costs are a mixed bag. On corn, fertilizer costs are up about 7%, even though Barron believes most farms are staying with removal-rate applications. On soybeans, he says fertility costs will be lower, mainly because growers are putting less fertilizer on their bean acres and leaning harder on corn nutrients.

Machinery and equipment costs are also inching higher for the year ahead.

This Is Not A Repeat Of The 1980s

Despite the “red” many farmers will see on their spreadsheets in the year ahead, Barron says the current period is not a repeat of the 1980s farm crisis, for two key reasons:

Farmer equity is strong. Debt-to-asset ratios remain healthy for many U.S. growers, even if cash is tight.
Many farmer exits are voluntary. Today, many farmers are choosing to retire or scale back in order to protect equity.

Barron offers a recent example: “I got a call the other day on 7,000 acres, a 45-year-old farmer saying, ‘I’m not going to do this anymore. I’ve got a $5 million equity position, and I’m not going to go for a couple more years and chew away another million dollars. I’m just going to be done.’”

Strategies for the Current Climate

To survive — and potentially thrive — in this “repeat” cycle, Barron suggests focusing on these four areas in the year ahead:

Do the high-dollar work. Barron says the “$500-an-hour” work is crunching numbers in the farm office. “Know your true costs, stress-test budgets, analyze each profit center. A few hours spent with good numbers can be worth far more than another round in the tractor,” he says.
Protect yield. He advises against cutting seed, chemistry or other inputs that protect or enhance yield “just to save a few cents per bushel.”
Right-size your operation. Barron says some of the most successful turnarounds he’s seen with operations lately have come when farmers “right-sizes” — they’re doing less, but doing it better — instead of trying to be everything to everyone.
Use collaborative models. Barron says he is seeing more farmers share equipment and labor with their neighbors to spread fixed costs without extra capital.

Opportunity Will Still Knock

During a Top Producer podcast, Barron told Host Paul Neiffer that the tight times ahead will create new land-rent opportunities for some farmers who want to expand. What commonly happens when margins get tight is some farmers pull back, and that’s when expansion possibilities open up for others.

“We’ve had numerous clients call us about opportunities to rent land and not like in small amounts. When times are tight and when things aren’t good, that’s when these opportunities present themselves,” he says.

Barron’s message for those farmers in expansion mode: have your numbers, working capital and lender relationships in order now, so if the right block of ground comes available, you can move quickly and confidently on it.

If you’re interested in the ROI spreadsheet Barron’s team uses to analyze market trends, email cbarron@agviewsolutions.com .

Hear the complete discussion between Barron and Flory on Farm Journal TV . Also, you can listen to the Top Producer podcast discussion between Barron and Neiffer at the link below:

Farm Journal Survey Signals 2025 National Corn Yield Could Fall Short of 2024

Fri, 17 Oct 2025 17:58:55 GMT

The government shutdown and resulting absence of data from USDA has left a void in the volatile grain and oilseed markets. To fill the gap, Farm Journal conducted a survey to get an update on yields and harvest progress as well as other important topics on producers’ minds.

Based on more than 1,100 qualified responses from across the U.S., the biggest takeaway is that corn yields are estimated to be down compared with USDA’s September estimates in six of the seven Pro Farmer Crop Tour states. Due to disease pressure and dryness, the 2025 national corn yield could be lower than the 2024 average of 179.3 bu.

(Farm Journal)

As of mid-October, yields are steady or lower for 74% of the respondents across the Crop Tour states, a far cry from higher production estimates for each state in USDA’s September Crop Production Report, says Lane Akre, Pro Farmer economist. Traders and analysts saw production falling from the September USDA estimate of 186.7 bu. per acre to 185 bu., according to a pre-report poll from Bloomberg in early October. If production does shrink, as the Farm Journal survey indicates, the national average yield could fall to 178.5 bu. per acre.

When compared to 2024, the Farm Journal survey shows the biggest yield decline in the “I” states:

Illinois at 7%
Indiana at 4.6%
Iowa at 3.2%

On the other hand, Minnesota at 3.8% and South Dakota at 3.3% are seeing yields come in higher than last season.

Soybean Harvest Progress Well Ahead of Corn
Corn harvest progress is on par with other private estimates at 43% on Oct. 15.

(Farm Journal)

Soybean harvest is well ahead at 79% due to dry conditions.

“While we aren’t getting the weekly crop progress reports, they are still calling and the analyst average this week was 60%,” Akre says.

(Farm Journal)

Storage Issues Especially Challenging in Northern Plains
Just over a third of all respondents in Farm Journal’s survey noted storage concerns as many producers are opting to store grain rather than take it to market. Storage issues are more prevalent in the northern Plains, with 56% of producers in South Dakota saying they are facing issues.

(Farm Journal)

With China absent from the export market and soybean yields strong, basis levels in the northwestern Corn Belt have widened to levels not seen since the 2018 trade war. Storage piles are already stacking up at local elevators.

“We’re just a week into harvest and already seeing more piles than we have seen in years past,” says Kevin Deinert, a farmer from Mount Vernon, S.D. “If you look at total production and total storage capacity, we’re going to exceed our storage capacity by a considerable amount.”

Typically, farmers in the Dakotas sell soybeans right off the combine, but this year many are holding onto their crop, hoping for better prices down the road.

“The basis on corn is not great either, but it’s exceptionally bad on soybeans,” explains Todd Hanten of Goodwin, S.D. “I’m going to store it all and try to capture some better basis in the future.”

David Struck, a farmer from Wolsey, S.D., is also storing beans with the hope come January and February, he’ll be able to move them and get a better price.

Based on CoBank estimates, the nation will be short 73 million bushels of upright grain storage this year, a dramatic shift from last year’s surplus.

“When you pull out to the 12 major corn-producing states, and that includes soybeans, we’re going to be short by about 1.4 billion bushels of storage capacity,” says Tanner Ehmke, CoBank’s grain and oilseeds economist. “Last year, we were long by about 360 million bushels.”

Farmers Still Support Tariffs
Despite the ongoing trade war with China, which has weighed heavily on row-crop prices, more than 60% of respondents say they support tariffs. Many are hopeful that aggressive trade policies will pay dividends once it is all said and done.

(Farm Journal)

2018 All Over Again? Northwest Corn Belt Farmers Face Storage Crunch, Basis Collapse

Fri, 29 Aug 2025 12:43:58 GMT

Farmers in the northwestern Corn Belt are experiencing déjà vu. Harvest 2025 is starting to feel like 2018 all over again. The lack of export business has widened soybean basis in North Dakota, says Frayne Olson, crop economist and marketing specialist with North Dakota State University.

China, which takes 25% of all U.S. soybeans, is facing tariffs as high as 23%. As a result, Beijing has made no purchases of new crop soybeans .

“Current soybean basis levels are anywhere from -$1.35 to -$1.55,” Olson says. “During the peak of the last trade war between the U.S. and China, we were at a -$2 in many locations.”

North Dakota farmers depend on soybean exports to China, so they’re looking for a market for more than half of their 220 million bushel crop.

“We’ve been set up to ship through the Pacific Northwest to China. Right now, with that market shut down, 120 million bushels have to go somewhere,” explains Randy Martinson, Martinson Ag in Fargo, N.D.

Farmers Might Face Storage Crunch
With $8 cash soybean bids in the Dakotas and Minnesota, and no bids for fall in a few markets, farmers might need to break the norm and store soybeans.

“The incentives are now for farmers to store soybeans on-farm and try to push some of the corn through the system as quickly as possible,” Olson says. “Our challenge with that, of course, is harvest capacity.”

Farmers are scrambling to find storage and have limited options — with old crop still to move and capacity lost to storm damage in North Dakota.

Olson says their options will depend on harvest conditions and moisture content.

“If the corn is dry enough, I think there will be a lot to put into bags . There will probably be some we’re going to have to pile outside regardless, whether they’re farm storage piles or commercial storage piles,” he says.

Other Areas Also See Basis Weaken
Basis has also weakened in other areas of the Corn Belt, such as Kansas, where big crops are predicted and processors have backed off bids for corn and soybeans, says Mark Knight with Farmers Keeper Financial.

“You’re seeing some basis get wide. They expect a big crop coming, so there’s not a big supply fear out there right now. Why pay up?” Knight says.

Farmers might have to sell overflow bushels and look at buying the crop back on the board, he advises.

“They’re looking for ways to re-own — whether it’s through futures, options or storage themselves. I think most of the guys are going to get away from paying for commercial storage,” he explains.

With the storage crunch, commercial storage costs will likely be much higher this fall.

$8, $17, $14: How Historic Are These Grain Markets?

Tue, 19 Apr 2022 18:59:07 GMT

A rising tide lifts all boats, and that might be what’s happening in the grain and oilseed markets. This week kicked off with another big rally in prices.

May corn prices are above $8 per bushel, and soybean prices are above $17 per bushel. Wheat prices hit record levels to round out March, and cotton prices are creeping close to levels not seen in a decade.

“The last time we had front-month corn trading above $8 was in 2012,” says Brian Splitt, technical analyst with AgMarket.Net . “That was in August when we had a drought. When you look at what front-month high was made in 2012, it was around $8.43.”

Check the latest market prices in AgWeb’s Commodity Markets Center .

On Monday, April 18, May corn prices hit $8.13 per bushel.

“The whole board is going together,” Splitt says of several key contracts. “This is not just the front leading it. The front is more than the back end, but we’ve got all contracts making new highs.”

Watch Splitt on “AgDay”:

Several factors are pushing prices higher. Andrew Jackson, commodity broker with Producers Hedge , says slow planting progress is the No. 1 issue on his mind.

“I think that’s what’s driving us right now,” he says. “Are we going to lose any acres? Are we going to switch any acres?”

As of April 17, USDA estimates 4% of the U.S. crop has been planted. That compares to 7% planted by this time in 2021 and a five-year average of 6% planted.

In soybeans, only 1% of the U.S. crop is in the ground, which is similar to the five-year average.

“On the weather front we’ve had a less-than-ideal start to the planting window in the Corn Belt,” says Joe Vaclavik, president of Standard Grain. “That doesn’t mean that things will be delayed to any material degree.”

Vaclavik says the corn market is attempting to buy back some of the acres USDA dropped in its corn estimate in the March 31 report.

“I just don’t know if that short of shift back to corn acres is even possible given inputs and fertilizer costs,” he says. “It is still a wildcard, but it’s tough for me to believe corn will buy back a material amount of acres at this point.”

Watch Vaclavik on “AgDay”:

Even if planting is delayed, Jackson says the markets are providing an incentive to plant every acre possible.

“But the question is when will we be able to. We don’t want to plant this stuff too late, as we start losing yield potential,” he says. “But still, I do think the farmer’s going to have every incentive to put in the ground because the later we get, the more the market’s going to try to factor that in.”

Currently, the corn and soybean markets are inverted, which means the nearby futures contract month’s price is higher than a later month.

To the buyer, Jackson says, an inverse market says: Don’t buy everything you need. Wait, prices will get better.

To the seller, inverse markets say: Move it all; don’t hold on to it.

This situation, Jackson says, could crate good basis opportunities for farmers this season, as well as high bids for the earliest-harvested crops this fall.

For farmers who are facing less-than-ideal basis levels, Jackson says they should still be actively marketing their crops: “When was the last time you had an opportunity to sell $8 corn?”

Will this trend of high prices continue?

Expect to see a little pullback from the high prices that started the week, says Jack Scoville, vice president of Price Futures Group .

“But there’s really nothing to stop this thing from going higher yet,” he says. “With the fundamentals and the way things are with the news, it looks like we’re still going to continue to hold and be very strong as we move forward.”

“The markets will just be trying to hang on to what we gained today through the end of the week,” adds Chip Flory, host of “AgriTalk.”

Listen to Flory’s full conversation with Jackson and Scoville on “AgriTalk”:

Check the latest market prices in AgWeb’s Commodity Markets Center .

Read More
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Corn Futures Hit Decade-High Above $8/Bushel on Global Supply Concerns

Illinois River Infrastructure Updates Could Improve Basis

Wed, 11 Nov 2020 06:26:13 GMT

Upgrades currently underway on the Illinois River locks and dams have been a long time coming.

“I’m just so glad to see the work finally being done,” says Marty Marr, a farmer leader in the Illinois Corn Growers Association.

All of the locks are between 80 and 90 years old, according to the U.S. Army Corp of Engineers.

A healthy waterway system is imperative for the agricultural industry, which relies on the river system. Corn, soybeans and other grains, crop protection products, petroleum products and manufactured goods are routinely moved on the waterway.

Marr says he believes the updates to the locks and dams will have a positive impact on basis, once completed.

“Right now, it’s something that we have to grind through, but I think it’s something everybody wants to see done—everybody knows the need is there,” Marr says. “We’ll have a much-improved waterway system to work with, and we’re hopeful the work is completed on time.”

Timely completion is important because, unlike some of the upper Mississippi locks and dams, the Illinois River usually remains open for business throughout the year.

Just over 27 million tons of cargo pass through the LaGrange Lock annually (based on a three-year average between 2015 and 2017), which makes LaGrange the busiest lock on the waterway, according to a press release distributed by Waterways Council, Inc.

Work on the locks and dams began July 1 on LaGrange in Versailles and Starved Rock in Utica, according to the release. Work has since commenced on locks and dams at Peoria, Marseilles and Dresden Island. All work is scheduled, currently, to be completed by the end of October.

To pay for the project, a cost-share program is being worked on by the Senate. Marr says that up to 25% of the money needed could come from the Inland Waterways Trust Fund.

More information on the project is available from Marr’s interview with AgriTalk host Chip Flory here:

4 Factors Driving the 2019 Grain Elevator Outlook

Wed, 11 Nov 2020 06:12:46 GMT

“Cautious.” That’s the word Will Secor, a grain and farm supply economist with CoBank , would use to describe the year ahead for grain elevators.

“There are some bright spots based on the fundamentals for corn and wheat,” he says. “But there’s extreme caution when we think about the overall picture, as we incorporate what is going on in the soybean market.”

Even with the recent news of President Donald Trump and Chinese President Xi Jingping agreeing to a trade truce , uncertainty remains. Combine that with farmers in challenging financial positions, likely interest rate hikes and other macroeconomic forces, and the outlook for grain elevators in 2019 looks volatile.

For next year, Secor is watching four major factors.

1. Storage

“The big issue is the large crops,” he says. “For an elevator, it’s not just the size of the crop, but it’s where the crop is; we have some surpluses in localized areas, but generally, there is tight supply of storage and capacity.”

Illinois and Nebraska will have the largest grain storage shortages, Secor says. Iowa, Kansas, Indiana, South Dakota and Ohio will also come up short.

Source: USDA, CoBank

“We’re hearing of a lot of producers using ag bags and opening up bins they haven’t used in years,” he says. “It’ll be really interesting to see how it plays out.”

2. Carry in the market.

Currently, farmers are seeing good returns for storage, Secor says. The market’s spread is being driven by the big crop and variable demand.

3. Basis

Soybeans have been the driver in basis levels, Secor says.

“When you look at soybeans in the Dakotas, you have very, very weak basis due to the lack of P&W export movement for soybeans,” he says. “When you look at the rest of the country, you also see weak basis for soybeans, due to the demand issue and the size of the crop.”

Corn basis has also been highly variable, based on the region.

4. Transportation

From a transportation perspective, Secor is watching two elements: diesel prices and truck drivers.

“Diesel prices are leveling out, but remains above year-ago levels,” he says.

On the labor side, he says, the biggest challenge is for elevators to get someone in a truck who can reliably deliver grain—at an affordable level.

“There’s a lot of wage pressure from the rest of the really strong economy here in the U.S.,” he says.

Secor spoke at the National Grain and Feed Association’s Country Elevator Conference , which is happening Dec. 2-4 in St. Louis.

What bids and basis levels are your local elevators offering? Check them with AgWeb’s Cash Grain Bids .