There’s a lot on a farmers’ minds these days, from input costs and labor shortages to trade challenges and natural disasters.
With an influx of reports projecting that the market won’t improve significantly in 2025 for much of the world, there’s a lot to think about in the realm of saving money and making moves within your operation to help get through this downturn and into the next upcycle.
To gain some insight into where the ag market has come over the last 12 months and understand the factors that will impact us in 2025, we reached out to several market experts:
Bryce Baker — Director of PTx Product Brand Marketing
Connor Anderson — Global Director of Channel Development at PTx Trimble
Barry Ward — Lead, Production Business Management at The Ohio State University
Reflections on 2024
While profit margins have been zero to small, this can be partly attributed to the downcycle we are experiencing as a part of a normal market trend. The COVID-19 pandemic also had an impact, causing supply chain issues that have made the upcycle stronger as a result of buying psychology. The outcome has been a hard end to 2024, with farmers capped by commodity prices, cash rents and high machinery costs. Weather and the increase in input costs per acre since 2020 have also made it a challenging 12 months.
Despite this, AGCO CEO Eric Hansotia said in an interview with the Progressive Farmer that he is convinced that, after two or three years of good prices, farm balance sheets have remained strong in 2024 along with land values. The USDA numbers support that with an August report that cropland prices rose 4.7% over 2023.
According to Barry, net worth and equity have been fairly stable this year; it is the subset of farmers that rent 60-70% of their land base that need to see a carry in the market, and that just hasn’t happened.
Due to tighter margins, Bryce says that farmers are trying to keep up by seeking what is next while also staying ahead of new shifts in the market. With tax liabilities and the variation in crop yields this fall, the general trend is that farmers are being selective in how they spend any extra funds and will try to choose wisely to get the most bang for their buck.
This carries over into the precision ag market, where solutions that target input cost savings and yield enhancements are at the forefront. A farmer has to see these solutions generate real savings to know they are capitalizing on the investment. Generally, that means gaining capabilities through retrofit upgrades.
What to watch for in 2025
Despite all the doom and gloom of input costs and crop prices, all three of our experts mentioned some factors that may help give farmers a break in 2025.
When looking at the whole cross-section of inputs, there is expected to be some minor relief as farmers go into the early stages of buying and pre-paying for the next growing season. While inputs like phosphorus are still experiencing tight supplies globally, nitrogen, potash and fuel prices are projected to decrease slightly. Barry also explained that generic crop protection chemicals are plentiful with a downward pressure that will keep them lower on a per-acre basis.
With return on investment being top of mind, the precision ag market has some promising solutions on the bleeding edge that shouldn’t be overlooked. According to Bryce, these are the top four to pay attention to:
Intelligent spraying: fight herbicide resistance and increase control with variable rate and spot spray technologies to increase input cost savings
High-speed planting: save on time and labor
Automation: reduce decision points and the need for skilled labor
Autonomy: overcome labor shortages and increase efficiency
Data is also key. According to Connor, managing field data and using it to improve on past experiences will be vital as we move into the future. The key is not in collecting the data but in having easy-to-use tools that can quickly generate recommendations and ultimately results that enhance field performance.
When it comes down to it, Bryce says a farmer should focus on the question “How can I do something better for the next season that I didn’t last season?”
That’s what looking ahead is really all about.
