State of the State 2025: Conditions not good for Arkansas’ crop farmers

by George Jared (gjared@talkbusiness.net) 385 views 

Soybean agronomist Jeremy Ross was preparing to celebrate New Year’s Eve when his phone rang. It was a producer he’d worked with in the past. The news was not good, and was possibly a warning sign for Arkansas’ agri sector.

“One farmer called me on New Year’s Eve to say he was shutting down, and it really surprised me. He had a good yield, but he just couldn’t swing it another year,” Ross said.

Corn, cotton, soybeans and rice all had record yield years in Arkansas during the 2024 season. But global market trends, competition from countries, elevated input costs and depressed commodity prices, meant that many farmers did not post a profit in the last year.

Many stakeholders in the industry believe there will be an increase in farmland auctions and there will be less producers in Arkansas in 2025. The state’s top crop, soybeans, failed to keep up with production costs. Per-bushel prices fell to an average of $10.80, a $1.25 decline from forecast prices earlier in the spring. About 3 million soybean acres were harvested in the state last year, according to the U.S. Department of Agriculture’s National Agricultural Statistical Service, or NASS.

“There’s still some talk of some people not having a crop in 2025,” Ross said. “I’ve heard from several others in the same situation. And this isn’t just in Arkansas. Talking with my counterparts in other states, they’re hearing the same thing, in the Mid-South and the Midwest.”

LAND OWNERSHIP
Scott Stiles, extension agricultural economist for the Division of Agriculture, said there will be some farmers who will likely leave agriculture.

“No doubt we’ll see a few more farm auctions this winter,” Stiles said. “The ag lenders say growers have been really slow to come into their office. I think the farmers have been going to their accountant first, and waiting to see what kind of assistance may be coming from Washington.

“The American Relief Act provided some economic help. But for soybeans, for example, the expected payment is $29.50 an acre. Cotton might get a payment of $87 per acre. For the majority of growers, these payments aren’t going to bring them to profitability,” he said.

Many farmers lease their land making it even harder to turn a profit, according to Stiles.

“If you owned all your farmland, at today’s prices, you might be able to pencil out a profit,” Stiles said. “But the problem is that most growers are tenant farmers. They have to pay a share or some cash rent. In today’s price environment, it takes some really strong yields just to break even.”

For example, if a producer is paying a 20% share of his crop sales to a landlord, that grower would need to average 62 bushels an acre in soybeans or 235 bushels an acre in corn just to approach profitability.

“You’d have to be exceeding record average yields in everything,” he said.

CROP NUMBERS
Arkansas growers planted about 7 million acres of crops in 2024, a decline of about 158,000 acres from the previous year, NASS reported. Corn had the most dramatic drop in the state, from 850,000 acres planted in 2023 to 500,000 acres planted in 2024.

The average yield among those acres tied the state record at 187 bushels an acre. Jason Kelley, extension wheat and feed grains agronomist for the Division of Agriculture, said the crop represented “personal bests” for many growers he spoke with.

An average market price of $4.20 per bushel marked a continued decline from 2022’s peak price of $6.54 per bushel, making the crop unprofitable for most Arkansas farmers. The price last year was 11% lower than projected in the spring, according to Farmdocdaily.

About 1.44 million rice acres were harvested last year. Growers had record average yields of 7,640 pounds per acre, producing more than 109 million hundredweight of rice, the USDA reported. Jarrod Hardke, extension rice agronomist, said that while growers managed significant yields despite harsh weather conditions, those same conditions reduced profitability in the end.

“It was the excellent production year we thought it would be,” Hardke said. “Everything pointed to being really close to 2021’s record yield. Unfortunately, the hitch for rice was the milling yield component. It has a huge effect on the prices growers receive, and how much rice the industry actually has to work with.”

Arkansas cotton acreage jumped more than 27% in 2024 to 650,000 acres, a growth rate consistent with the United States cotton industry as a whole. The state also saw a record average yield of 1,313 pounds per acre, for an overall production estimate of 1.75 million bales. Cotton prices remained low in 2024, falling from the 2023 average of 79-cents per pound to 76-cents.

POULTRY, CATTLE
The poultry industry, the largest industry in the state’s agriculture sector, got relief from a disease that has been impacting flocks around the country since 2022. There has been a significant drop in the number of highly pathogenic avian influenza, or HPAI, reported in the state during the last year. At least 255,000 birds were afflicted with the disease in the state in 2023, according to the USDA.

However, outbreaks were detected in December. As of Jan. 24, 2025, the USDA reports that two commercial flocks and one “backyard flock” were recorded as having the HPAI bird flu. The report said 126,420 birds were in the detected flocks, but the USDA does not identify what type of birds were infected.

Cattle prices reached an all-time high in 2024, and that trend is likely to continue into 2025, according to industry officials. But there are caveats. Herds across the board have been smaller and there are no signs that producers will increase herd sizes this year or in 2026. Higher prices are good for cattle farmers, but mean that consumer prices will remain elevated.

Editor’s note: The State of the State series provides reports twice a year on Arkansas’ key economic sectors. The series publishes stories to begin a year and around mid-year to provide an update on the state’s economy. Link here for the State of the State page and previous stories.

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