USDA’s Outlook for 2025

by Chad Hart

Over the past month, the US Department of Agriculture (USDA) has provided its outlook for agriculture in both the short and long term. The last couple of years have been challenging in the agricultural economy. Prices for crops have fallen, costs have risen, and net farm incomes have retreated. Drought, tariffs, and inflation remain as substantial concerns for the industry. The projections for 2025 highlight some of those challenges for agriculture in the year ahead and indicate that the ag economic downturn will likely continue, as production is likely to exceed consumption for many commodities once again.

Let’s start with the one market where production is declining, cattle/beef. Table 1 outlines some of the basic numbers for cattle/beef. For the cattle sector, producers have been reducing their herds for several years. The long-run drought throughout various portions of the United States over the past five years has forced a significant reshaping of the cattle industry. The lack of high-quality pasture forced cattle producers to send more heifers into feedlots and sped up the movement of cattle to slaughter plants. Over the years, that has significantly reduced the overall size of the national cattle herd. The smaller herd translates into fewer cattle and lower beef production. We started this year with 1.2 million less cattle than we had last year—that will translate into a 1.1-billion-pound drop in beef production, lowering production to 26 billion pounds. With the combination of lower production and stubbornly strong domestic consumption, beef exports are projected to fall to 2.6 billion pounds, while beef imports have risen to 4.4 billion pounds and retail beef prices have hit record highs. As the herd continues to shrink, steer prices have risen significantly over the past few years. The outlook for 2025 shows average steer prices reaching $186 per hundredweight, with the potential for prices to rise to $200 per hundredweight.

Unlike the national cattle herd, the national swine herd has been growing over the past couple of years as productivity gains have more than offset smaller farrowing intentions. Over the past two years, the swine herd has grown by 1.1 million head (table 2). With the increase in animal numbers, pork production has climbed above 28 billion pounds. The increase in production has coincided with a resurgence in pork exports, with USDA originally projecting 7.4 billion pounds for pork exports in 2025. However, the early weekly export data has not lived up to those expectations; and, while hog prices did slightly improve in 2024, USDA’s outlook shows a small decline in hog prices for 2025, with the national base price at $58 per hundredweight.

In total, USDA’s projections are mixed for the livestock industry. The cattle sector continues to contract, leading to lower beef production and higher prices. The swine sector is growing, leading to higher pork production and lower prices.

Shifting to the crop sector, the general outlook is similar to that for pork, higher production and lower prices. Corn is following up on two record years—2023 was the largest crop in terms of production and 2024 was the best yield, which provided a lot of bushels for the corn market with which to work. During the 2024 marketing year (which we are in the middle of now), corn exports have been the major growth area for corn usage. Usually as exports grow, we would expect corn prices to rise.

However, given the expectations of tariffs throughout 2025 and the relative standing of corn prices versus other crop prices, the outlook for 2025 is for an increase in corn plantings and further erosion of corn prices. The early projections for the 2025 corn crop show a record 15.585 billion bushels of potential production (table 3). Thus, corn usage would need to expand quickly to match production. That usage expansion is unlikely given a shrinking cattle herd and a mature, but stable, ethanol industry. Corn exports are the only demand segment that could increase quickly, but the likelihood of that diminishes with each tariff announcement. Thus, ending stocks are projected to rise and the projected price for corn in 2025 is set to decline to $4.20 per bushel, over two dollars lower than the average price for the 2022 corn crop.

While the soybean market shares many of the storylines as the corn market, there are a few key differences. In 2024, soybean was the crop attracting acreage. With the increased area, soybean production increased by roughly 200 million bushels to 4.366 billion bushels; and, while soybean usage did quickly expand to utilize more soybeans, soybean supplies increased faster. Thus, the 2024 marketing year has been rough for soybean producers as the season-average price for soybean has fallen nearly $2.50 per bushel over the past year. The projections for 2025 show fewer soybean plantings, but with soybean yields based on the historical trend, soybean production is expected to hold relatively steady at 4.37 billion bushels (table 4). While domestic usage of soybeans is expected to increase due to growth in biofuel production, that growth is slowing down. Export sales are projected to increase as well, but by a smaller amount and the tariffs will likely force USDA to revise this estimate downward. In the end, USDA expects soybean prices to remain low throughout the 2025 marketing year.

The full set of projections show higher production and lower prices for crops and pork, with the opposite for beef with lower production and higher prices. While domestic usage for all of the commodities is still quite strong, the gains in usage over the past year have mainly come from exports. The potential for tariffs reducing or eliminating that growth is large. Without that growth, pork and crop prices will remain lower. Thus, the outlook for 2025 looks to be a continuation of the pattern from 2023 and 2024 with lower market revenues and farm incomes, barring any additional support from the federal government.

References

US Department of Agriculture (USDA). 2025. "March 2025 WASDE Report." https://www.usda.gov/oce/commodity/wasde/wasde0325.pdf.
US Department of Agriculture (USDA). 2025. "USDA Agricultural Projections to 2034." https://ers.usda.gov/sites/default/files/_laserfiche/outlooks/110966/OCE-2025-1.pdf?v=11485.

Suggested citation

Hart, C. 2025. "USDA Outlook for 2025." Agricultural Policy Review, Winter 2025. Center for Agricultural and Rural Development, Iowa State University. https://agpolicyreview.card.iastate.edu/usdas-outlook-2025.