It’s Not the ‘End of the World’ for Agriculture
December 30, 2024 As another agricultural year draws to a close, I’m once again reminded of that old riddle: Why does the end of the world never come?
Now in one sense, I get it. This year, 2024, was extremely rough for the agricultural marketplace on the whole. Although crop input prices moderated somewhat from their highs during 2022 and 2023, worldwide commodity prices also dropped significantly. All throughout the summer and fall trade shows, I heard many speakers talking endlessly about $3 corn and $7 soybeans.
Part of the reason for these price declines tied back to slowing demand for U.S. crops from key export partners such as China. This pushed the carryover numbers — the amount of corn and soybeans left in reserve for use within the country — to near-record highs as well, furthering depressing commodity futures.
Ag retailers, too, felt this strain. In the December issue of CropLife®, readers will find the financial outlook for cooperatives and dealerships in our annual CropLife 100 report. Needless to say, 2024 will resister as a “down year” for the market, with overall revenues declining more than $3 billion year-over-year from the 2023 CropLife 100 report. The majority of these losses were concentrated in two categories – fertilizer and ag tech services/products. In recent years, these two categories showed significant growth.
Naturally, with such bad news dominating the agricultural marketplace as the industry concludes the 2024 growing season, the feelings regarding the outlook for 2025 definitely have an “it’s the end of the world” vibe. In fact, according to an end-of-the-year survey by Purdue University/CME Ag Group, farmer sentiment during the early fall of 2024 hits its lowest level since 2016. Furthermore, commodity futures for the upcoming 2025 wintertime frame are showing below $3 per bushel corn prices might persist for some time to come.
Ag retailers are also predicting the “end of the world.” According to the 2024 CropLife 100 survey, respondents say their grower-customers rank the 2025 growing season as a solid “five” on a scale of one to 10 in terms of overall outlook, with one being the worst and 10 being the best. In prior years, the outlook number landed in the seven to eight range.
Overall, this doesn’t bode well for next year. However, consider a few key positive points.
First off, the decline among ag retailer revenues. In 2024, fertilizer prices dropped back to “normal levels” from their post-pandemic highs. While CropLife 100 respondents did see declines in fertilizer revenues, most indicated that their application rates remained relatively steady. So, this category should see a recovery in 2025.
And export markets might again open up for U.S. crops. According to recent reports by CoBank and USDA, continued droughts in countries such as Brazil have already steered many nations back to U.S. crops.
Finally, as a wise industry friend once told me: “No matter what, U.S. growers WILL grow crops next year.”
So, back to the riddle: Why does the end of the world never come? Answer: Because it’s round.
And so are agricultural cycles.
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