2024 Was A Year Many Tennessee Row Crop Farmers Would Like To Put In The Rearview Mirror

DR. AARON SMITH

KNOXVILLE, TENNESSEE

2024 was a year many Tennessee row crop farmers would like to put in the rearview mirror. Elevated input costs, high interest rates, and low yields combined with commodity price declines facilitated an unprofitable year for many farmers. Futures prices continued to decline for the second consecutive year. Nearby corn futures closed the end of the 2024 at $4.58 1⁄2 compared to $4.71 1⁄4 at the end of 2023, a 2.8% decline. The nearby futures contract trading range was $3.85 to $4.75 1⁄2 for the year, a $0.90 1⁄2 range. Nearby soybean futures closed at $10.10 1⁄2 at the end of 2024 compared to $12.98 at the end of 2023, a 22.1% decline. The trading range was $9.47 to $13.16 3⁄4 for the year, a $3.69 3⁄4 range. Nearby cotton futures closed at 68.4 cents at the end of 2024 compared to 81 cents at the end of 2023, a 15.6% decline. The trading range was 66.26 to 103.8 cents for the year, a 37.54 cent range. Nearby wheat futures closed at $5.46 3⁄4 cents at the end of 2024 compared to $6.28 cents at the end of 2023, a 12.9% decline. The trading range was $5.14 1⁄4 to $7.20 for the year, a $2.05 3⁄4 cent range. 

Unfortunately, prices are likely to remain in a low-price environment in 2025 necessitating robust production, risk management, and marketing strategies. Input costs will need to be managed with an eye towards maximizing profit. Yield is incredibly important but maximizing yield and maximizing profit are not the same thing. The cost of the input needs to be less than the revenue generated. 

Farmers will need to consider when to strategically mitigate risk throughout the year. Crop insurance will play an important role in managing risk. Lower futures prices will result in lower revenue guarantees, but if volatility remains low, premiums paid by farmers should be reduced. Evaluating buy-up coverage, unit structure, and the purchase of companion policies for the premium paid is essential to receive the most efficient coverage. 

When developing a marketing plan farmers should consider production, price points, and timing. Farmers need to estimate their cost of production. This should include estimates for cash costs and total economic costs, such as capital recovery (example - replacement of equipment over time). Pricing a portion of production incrementally helps to mitigate the risk of making all sales during a period when prices are lowest (typically harvest). A marketing plan will include evaluating access to on-farm storage relative to projected production and the cost of carrying inventory relative to anticipated price appreciation. 

Corn

Across Tennessee, average corn basis (cash price-nearby futures price) weakened at West elevators and barge points and strengthened or remained unchanged at Northwest, West-Central, North-Central, and Mississippi River elevators and barge points. Overall, basis for the week ranged from 20 under to 24 over, with an average of 7 over the March futures at elevators and barge points. Ethanol production for the week ending December 27 was 1.111 million barrels per day, up 4,000 from the previous week. Ethanol stocks were 22.639 million barrels, up 0.565 million barrels compared to last week. Corn net sales reported by exporters for December 20-26 were net sales of 30.6 million bushels for the 2024/25 marketing year. Exports for the same period were down 11% compared to last week at 39.5 million bushels. Corn export sales and commitments were 62% of the USDA estimated total annual exports for the 2024/25 marketing year (September 1 to August 31) compared to the previous 5-year average of 58%. Cash prices ranged from $4.23 to $4.85 at elevators and barge points. March 2025 corn futures closed at $4.50, down 4 cents since last Friday. For the week, March 2025 corn futures traded between $4.49 and $4.59. May 2025 corn futures closed at $4.58, down 3 cents since last Friday. 

Mar/May and Mar/Dec future spreads were 8 and -10 cents. December 2025 corn futures closed at $4.40, unchanged since last Friday. Downside price protection could be obtained by purchasing a $4.40 December 2025 Put Option costing 35 cents establishing a $4.05 futures floor. 

Soybeans

Across Tennessee the average soybean basis weakened or remained unchanged at Northwest, West, North-Central, West- Central, and Mississippi River elevators and barge points. Basis ranged from 34 under to 25 over the March futures contract, with an average basis at the end of the week of 1 over. Soybean net weekly sales reported by exporters were net sales of 17.8 million bushels for the 2024/25 marketing year – a marketing year low. Exports for the same period were up 8% compared to last week at 62.6 million bushels. Soybean export sales and commitments were 81% of the USDA estimated total annual ex- ports for the 2024/25 marketing year (September 1 to August 31), compared to the previous 5-year average of 79%. Cash soybean prices at elevators and barge points ranged from $9.65 to $10.34. January 2025 soybean futures closed at $9.81, up 1 cent since last Friday. For the week, January 2025 soybean futures traded between $9.74 and $10.04. March soybean-to-corn price ratio was 2.20 at the end of the week. March 2025 soybean futures closed at $9.91, up 2 cents since last Friday.

Jan/Mar and Jan/Nov future spreads were 10 and 27 cents. November 2025 soybean futures closed at $10.08, up 4 cents since last Friday. Downside price protection could be achieved by purchasing a $10.20 November 2025 Put Option which would cost 66 cents and set a $9.54 futures floor. Nov/Dec 2025 soybean-to-corn price ratio was 2.29 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for January were 66.07 cents/lb (41-4-34) and 68.07 cents/lb (31-3-35). Adjusted World Price (AWP) increased 0.48 cents to 55.03 cents. Cotton net weekly sales reported by exporters were net sales of 128,900 bales for the 2024/25 marketing year and 5,300 bales for the 2025/26 marketing year. Exports for the same period were down 18% compared to last week at 115,800 bales. Upland cotton export sales were 72% of the USDA estimated total annual exports for the 2024/25 marketing year (August 1 to July 31), compared to the previous 5-year average of 78%. March 2025 cotton futures closed at 67.66 cents, down 1.23 cents since last Friday. For the week, March 2025 cotton futures traded between 67.63 and 69.44 cents. May 2025 cotton futures closed at 68.81 cents, down 1.15 cents since last Friday. 

Mar/May and Mar/Dec cotton futures spreads were 1.15 cents and 1.4 cents. December 2025 cotton futures closed at 69.06 cents, down 0.96 cents since last Friday. Downside price protection could be obtained by purchasing a 70 cent December 2025 Put Option costing 4.04 cents establishing a 65.96 cent futures floor. 

Wheat

Wheat net weekly sales reported by exporters were net sales of 5.2 million bushels for the 2024/25 marketing year – a marketing year low. Exports for the same period were up 2% compared to last week at 14.0 million bushels. Wheat export sales were 74% of the USDA estimated total annual exports for the 2024/25 marketing year (June 1 to May 31), compared to the previous 5-year average of 82%. Wheat cash prices at elevators and barge points ranged from $5.03 to $5.31. March 2025 wheat futures closed at $5.29, down 17 cents since last Friday. The March wheat-to-corn price ratio was 1.18. March 2025 wheat futures traded between $5.27 and $5.54 this week. May 2025 wheat futures closed at $5.41, down 15 cents since last Friday. 

Mar/May and Mar/Jul future spreads were 12 and 20 cents. July cash contracts at elevators and barge points ranged from $5.18 to $5.48. July 2025 wheat futures closed at $5.49, down 14 cents since last Friday. Downside price protection could be obtained by purchasing a $5.50 July 2025 Put Option costing 37 cents establishing a $5.13 futures floor.   ∆

DR. AARON SMITH: University of Tennessee