2025 Agricultural Projections: CoBank predicts ag industry challenges

In addition to the challenges many already face in their day-to-day operations, rising inflation, ongoing drought conditions, devastating natural disasters, dangerous legislation and seemingly ceaseless anti-ag attacks made 2024 another tough year for the nation’s agricultural producers. 

Yet, with grit, grace and dignity, the industry battled through the storm, securing a few major wins along the way, and with the past year’s highs and lows in the rearview, many are looking forward to the year ahead.

2024 ag highlights

Throughout the past year, U.S. producers have faced severe ongoing drought conditions, the aftermath of the gray wolf reintroduction in Colorado, port strikes along the East and Gulf coasts and multiple natural disasters, including two major hurricanes in the South and devastating wildfires sweeping across the West. 

Close to home, a large grass fire west of Cheyenne was sparked at the beginning of March marked the beginning of one of Wyoming’s worst wildfire seasons, with more than 2,000 fires burning over 850,000 acres.

The industry also fought some nasty animal disease, including an outbreak of highly pathogenic avian influenza in dairy herds, a few cases of anthrax in Carbon County and most recently, a confirmed case of bovine tuberculosis in South Dakota. 

Additionally, ag producers faced an onslaught of potentially devastating legislation.

The federal government kicked January off with a bang by announcing the Corporate Transparency Act (CTA), which would require operations with under 20 employees to file beneficial ownership information to the Treasury Department’s Financial Crimes Enforcement Network starting Jan. 1, 2025.

January also marked the start of a year-long battle with the Bureau of Land Management (BLM) on the public lands front. In addition to tension around the BLM’s Rock Springs Resource Management Plan (RMP) announced the year before, the agency also released back-to-back controversial rules including the Public Lands Rule, the Greater sage grouse management plan and the Buffalo RMP, sparking a flurry of frustration. 

May saw the rise of anti-agriculture attacks when it was confirmed Pro-Animal Future received enough signatures to get the Slaughterhouse Ban and the Fur Ban on the ballot in Denver. 

This was carried into November when the Dietary Guidelines Advisory Committee published its initial report encouraging Americans to replace red meat with beans, peas and lentils. 

During this same month, the U.S. Department of Agriculture’s controversial Animal Disease Traceability Rule went into effect.

Despite all of this, the nation’s producers walked away with a few major wins.

The aforementioned CTA was rolled back for the time being, the Senate passed a Congressional Review Act to ban Paraguayan imports, several anti-ag measures failed at the voting booth in November, trending diets such as the carnivore and animal-based diets are getting younger consumers back to the meat counter and a new administration was voted in to office, giving many hope for the year to come. 

Looking ahead

While many are optimistic for the coming year, CoBank Knowledge Exchange warns rural America of some challenges yet to come.

In its 2025 Year Ahead Report, CoBank notes rural industries will likely be “disproportionately exposed to federal policy and face downside risks in the coming year, adding to their already long list of headwinds and challenges.” 

“The environment we enter in 2025 hasn’t fully defined itself yet, but many of the policies proposed by the incoming administration would likely have a negative impact on U.S. agriculture,” said CoBank Director Rob Fox. “Open access to export markets and labor availability are critically important for agricultural producers and processors. Depending on how policy plays out, those two areas could be big challenges in 2025 and beyond.”

CoBank experts believe President-Elect Donald Trump’s promise to enact import tariffs and reduce immigration may not play out as positives for the ag industry’s economy. 

Grains, farm supplies and biofuels 

“A strengthening U.S. dollar, combined with the potential for trade disputes and record-large South American crops weigh heavily on the outlook for grain and oilseed prices in 2025,” CoBank explains. 

The report further notes farmers will likely see decades-low profitability in the wake of high production costs and row crop prices falling nearly 50 percent from their highs in 2022.

“The bearish outlook for oil prices diminishes the demand picture for ethanol, biodiesel and renewable diesel,” CoBank continues. “Uncertainty over U.S. biofuel policy under the new administration also clouds the demand outlook for biofuels.”

Animal protein and dairy 

On the flip side, CoBank believes the future is looking fairly bright for an already booming livestock sector. 

Although costs of labor, construction, equipment and land are still high, falling feed costs and increased producer margins have renewed interest in livestock production.

Additionally, consumer demand is expected to hold steady with the potential to grow through the coming year. 

The U.S. Department of Agriculture’s Economic Research Service projects per capita consumption of chicken, beef, pork and turkey will grow up to two percent from 2024-25. 

CoBank further notes the U.S. beef herd is not expected to expand until 2026-27, due to volatile markets and poor pasture conditions. 

“The shrinking herd will further support higher feeder and fed cattle values, and it would not be surprising to see fed cattle values eclipse $200 per hundredweight in the coming year,” CoBank says. “Tight feeder supplies, low feed costs and excellent beef demand have yielded heavier carcass weights, which rose nearly 30 pounds or three percent in 2024.”

When it comes to dairy, CoBank explains the U.S. will likely see an unprecedented $8 billion investment in new dairy processing through 2026, one-half of which will go towards the cheese sector. Some plants are even set to come online in 2025.

“The expected surge in cheese and whey output will likely put downward pressure on dairy product prices in the second half of the year,” CoBank’s report reads. “Sourcing additional milk supplies to fill new plant capacity is a looming question.”

CoBank continues, “2023 and 2024 will go down as the first back-to-back years since the late 1960s that U.S. milk production took a downturn. On the flip side, higher component levels in farmgate milk, largely butterfat and protein, have lifted finished product yields.”

Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.