Farmers are ‘price takers’
Markets are reminding farmers they are price takers, not price makers. Record high beef and beef cattle prices, higher hog markets, even corn and soybeans showed strength this week. Meanwhile, dairy markets continued their volatile seesaw pattern, staying under pressure to keep U.S. cheese priced below the global market in order to export substantial quantities of new capacity cheese.
The Bureau of Labor Statistics Producer Price Index for July, released Aug. 14, showed overall prices for goods moving through the pipeline up 0.9% seasonally adjusted, with the food sector leading the increase at 1.4%. Trucking costs, measured in the final-stage PPI, also moved higher. These are the hidden costs producers and the food industry face every day, reminders that what farmers pay for inputs and what they receive for products often diverge.
Land O’Lakes CEO Beth Ford published an Op-Ed in Time Magazine entitled “A storm is gathering in American Agriculture.” Ford’s message was blunt. She pointed to internal estimates suggesting the number of dairy farms will fall from 24,000 to 21,000 by the end of 2025. The number of corn and soybean growers is expected to shrink from 400,000 to 300,000. Median farm income is forecast to be negative $328 this year. “A year of sweat and effort to lose $328,” she wrote. Ford stressed that less than 5% of farms are expected to be profitable for the third year in a row, while nearly 90% of farm families rely on off-farm income to keep their operations viable. She called 2025 one of the most challenging years since 2009 for grain producers.
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More topics covered in the August 22, 2025 Market Moos:
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