Optimistic despite tariff concerns

April 17, 2025 | Kriss Nelson

Trying to understand the current market is about as clear as looking into a murky Magic 8 Ball. During these times of volatility, Chad Hart, Iowa State University professor and Extension economist, tries to help farmers understand the current market.

“Farmers are not only concerned, but there is a lot of growing frustration,” says Hart. “They are trying to play the game, but the rules keep changing.”

Although the uncertainty of the times is unsettling, farmers are pushing forward with the 2025 growing season.

“No one has stopped running a planter; we are going to get the job done. I am not seeing many farmers changing their farming operations, and to me, that means we are still OK,” says Jeff Jorgenson, a farmer from Sidney and past Iowa Soybean Association (ISA) president. “If you are in desperation right now, you missed doing some things differently in 2024 or ’23. But, if 2025 doesn’t pull through with some opportunity for pricing, there will be more of us having that feeling of desperation.”

Shrinking working capital and cash flow, alongside high interest rates and input costs, plus falling commodity prices, create significant challenges.

“We either need to figure out a way to get more money out of our products, or input prices have to go lower,” he says. “And if both would happen, that would be the best answer. That is what would work best for U.S. agriculture.”

How will the uncertainty around tariffs impact the markets?

A clear trend over the past few months: markets react swiftly to tariff news.

“The markets immediately reacted to tariffs with a decline. When tariffs were placed on hold, they [markets] came roaring back,” says Hart. “Tariffs strongly hit November soybean futures upon announcement, but the market has since recovered.”

Hart reminds farmers, “The storm is out of our control.”

“We can’t control the policy, but we can see when policies are changing relative to what happens to our prices this time of year and use that information to help drive our marketing decisions.”

Currently, most tariffs are in a 90-day pause except for China. Fortunately, this 90-day pause also coincides with the traditional seasonal bump in the markets that develop in the April, May and June timeframe.

“That is a window we tend to see better pricing,” Hart says. “Let’s play this out, and hopefully, we see some better pricing than we do right now.”

Although farmers rarely like to market this time of year, Hart says it might be a good idea to have some protection if the tariffs come back online in 90 days. Especially at this time of year, when the focus is more on planting and perhaps less on the markets.

According to Hart, USDA reports and futures markets forecast a soybean price of $10 per bushel. Farmers can be hopeful of capturing a price a little better than that.

“Put in what I call an aspirational offer,” Hart says. “I am looking at November soybean futures in that $10.25 range. Maybe put in an offer if they get to $10.75 you will sell some bushels then another up to $11. This is setting prices up high enough that you may be put in a profitable position if there is a recovery.”

Farmers should also pay attention to planting progress, which could spur a price increase in the short run.

Hart says he’s focusing on the eastern Corn Belt, where floods and waterlogged soil have impacted parts of Kentucky, Tennessee and Ohio, possibly delaying planting.

“Right now, Iowa is sort of the Goldilocks’ spot,” he says. “You can argue when you look to our west, it is too dry, and when you look to our east, it is too wet. And so far, we appear to be just right.”

Jorgenson says there is still an opportunity in the market.

“Whether it goes up or down, it just needs to move,” he says. “But there is definitely more uncertainty in the market in ways we haven’t always been comfortable with.”

Jorgenson reflects to facing low commodity prices in the early 2000s.

“We would make sales in order not to lose as much money,” he says. “It is just not a good time in agriculture. We have had tougher times than this, and the reality is you have to work your way through it, but some won’t.”

Rebound in oil demand

The United States Department of Agriculture’s (USDA) World Agricultural Supply and Demand Estimates (WASDE) April report showed the outlook for U.S. soybean supply and use for 2024/2025 includes higher imports and crush and lower ending stocks.

Higher soybean meal and domestic and export demand raised the soybean crush by 10 million bushels to 2.42 billion bushels.

Export commitments increased soybean oil exports. Because soybean exports remained unchanged and imports increased slightly, soybean ending stocks decreased by 5 million bushels, to 375 million bushels.

“This shows us a record pace of soybean crush usage this year,” says Hart. “That’s good, and that is the type of growth we wanted. We have been giving up soybean oil exports to build up biofuels, and now those soybean oil exports have been roaring back to life. USDA cut its biofuel estimate but showed growth in soybean oil exports.”

Compared to last year, soybean oil exports are up nearly 800% because of the strong rebound in international demand. Markets with some growth include India, South Korea, Nigeria, Morocco, Colombia and Mexico.

USDA expects stronger use of soybean oil in biofuels during the last part of the marketing year. This is due to the potential of tariffs impacting imports of other biofuel feedstocks, such as used cooking oil, which could increase soybean oil use for biofuel.

Soybean and corn exports are up significantly, with increases of roughly 13% and 25%, respectively, according to Hart.

Looking ahead

The May WASDE will be USDA’s first publication for the 2025 crop. Hart says he is watching how the USDA will adjust demand and usage for the 2024 and 2025 crops.

“There’s likely to be a significant adjustment in those usage numbers USDA announced in February,” he says. “If they adjust on the soybean side, will it be adjusting crush? If they do, I am interested to see if it is because of biofuels or export use.”

---

Back