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Soybean growers face a third year of negative market returns in 2025, with rising production expenses contributing to the squeeze, according to American Soybean Association economists.
In a report published Wednesday, economists Jacquie Holland and Scott Gerlt noted that when harvest got under way in September, November soybean futures were 25% to 30% lower than at the same point in 2022.
But revenues aren’t the only problem. Farmers face elevated prices for land, machinery, seeds, pesticides and fertilizers, they wrote, noting that USDA has pegged farm production expenses to hit $467.4 billion in 2025, up $12 billion from 2024.
“The rising input costs mean farmers are paying more than ever to grow their crops, often at a loss,” the economists wrote. An ASA economic analysis projects soybean farmers will net an $89 per planted acre market loss on their 2025 crops. That would come after a loss of $146 an acre in 2024 and $46 an acre in 2023.
The ASA analysis focused on input prices, noting that the COVID-19 pandemic kicked off an “era of price turbulence” that has yet to subside. Russia’s invasion of Ukraine in February 2022 sent fertilizer prices to new highs. Fertilizer prices have eased off 2022 highs but remain above pre-pandemic levels amid rising South American crop production, increased global consumption of soybeans and soy products and geopolitical disruptions in the Middle East, the report noted.
Meanwhile, elevated tariff rates on key inputs, especially fertilizers and pesticides, are a significant cost factor for producers, the economists said. Tariffs enacted by President Donald Trump under the International Emergency Economic Powers Act “materially altered” input cost structures, they said, raising the effective cost of agricultural imports and contributing to a measurable contraction in fertilizer import volumes. In turn, that pushed up domestic prices, particularly in the phosphate segment. An executive order signed on Nov. 14 removed tariff duties on diammonium and monoammonium phosphates (DAP and MAP) and potash, which may help reduce costs for the next growing season, the economists said.
Data from the North Dakota State University Agricultural Trade Monitor indicates that the average tariff rate on agricultural input products has increased to 9.4%, compared with less than 1% prior to the implementation of the IEEPA tariffs, the economists wrote. The biggest impact was on pesticide imports, where effective tariff rates — including most-favored-nation adjustments — now average around 16% for herbicides, up from 5–6% previously, NDSU data shows. Specialized pesticide imports from India, a major global supplier, currently face an effective tariff rate approaching 44%. Meanwhile, tractors have gone from a 0% tariff rate to a 16% tariff rate. An imported tractor with a value of $500,000 now faces an $80,000 duty to enter the country, the economists noted.
A key takeaway is that input costs have remained sticky even as crop prices have retreated.
As the economists explained: “When returns increase, more dollars are available to chase limited inputs. This results in an increase in input prices. When farmer revenues drop, input prices should fall again. Alternatively, if revenues do not fall, the higher input prices should spur suppliers to produce more, which would also bring input prices down.”
But that hasn’t been the pattern for crop inputs, they noted. From 2000 to 2013, input prices and crop prices largely moved together, albeit to higher levels. As crop prices remained depressed from 2014 to 2020, input prices held firm at elevated levels and then spiked again as crop revenues from from 2021 to 2023. While crop prices have fallen since then, input prices have continued to rise.
The economists said some divergence over time between input and output prices can be expected as yields increase. After all, higher yields increase supply and reduce the price necessary to put an acre into production. But even with that in mind, soybean cash prices have remained below breakeven costs since the beginning of 2024, they noted, an indication that yield increases aren’t currently bridging the gap between input and output costs.
“As international supply in the soy space continues to grow, controlling costs will be crucial to remaining competitive in foreign markets,” they wrote.