The Midwest row‑crop math is ugly: cash prices are ~$4 corn and ~$10 soybeans against break‑evens near $4.50 (corn) and $11.50 (soybeans). University of Illinois agricultural economist Dr. Gary Schnitkey breaks down what’s driving it and what landowners, operators, and lenders should expect.

What we cover

Tariffs & trade: No Chinese soybean bookings so far this season; China is favoring Brazil—and financing its export infrastructure. Result: lower U.S. prices now and a tougher long‑run soybean outlook.

Cost structure: Seed/fertilizer stayed high; machinery costs jumped ~25% (2021–2023). Million‑dollar combines and pricier parts make scale (or equipment sharing) more critical.

Break‑even reality: ~$4.50 corn / ~$11.50 soybeans vs. ~$4/$10 cash—why margins are negative without aid.

Government payments: 2024 ad‑hoc aid (~$10B nationally; ~$37/acre in IL) kept incomes from going red; 2025 budgets assume ~$65/acre commodity title payments plus another ECAP‑style package. Policy support is holding up cash rents and land values.

Farmland values & rents: Off the peak and largely flat. If payments fade, expect downward pressure; a gradual ~20% decline over time isn’t off the table if current conditions persist.

Crop switching & regen: Few viable pivots in the Corn/Soy Belt. Lower prices slow regenerative adoption (transition takes time and can ding yield early). Great Plains likely adjust first.

Livestock: Bright spot—cattle margins remain strong.

Outlook: Barring a major shock (e.g., Brazil/US drought), expect $4 corn / $10 soybeans to stick. In the meantime, the sector is effectively “going to Washington.”

Guest: Dr. Gary Schnitkey, Professor of Agricultural & Consumer Economics, University of Illinois; works with FBFM (Farm Business Farm Management) and Precision Conservation Management (PCM) datasets.

Read about Dr. Gary Schnitkey

National Land Realty

https://www.nationalland.com