Farm Credit East Knowledge Exchange Industry Snapshots

Volume 19, Issue 5
May 2025

The National Economy

The largest development with regard to the U.S. and global economies has been the developing trade disputes between the United States and trading partners worldwide:

U.S. TARIFFS ON THE WORLD

The situation is highly fluid, with significant changes being announced on a daily basis.

• Tariffs are a tax on imported goods, paid by the importing company or individuals.
  • Who bears the brunt of this tax can be debated. Normally, the importer will pass on the tax to consumers, but sometimes exporting businesses will offer concessions to help offset the cost of the tax. Importers will also often attempt to shift their procurement to less-taxed countries of origin. 
• The current situation is that on April 9, the Trump Administration announced a baseline 10% tariff on nearly all countries, with higher rates on a number of them, including; 20% on EU goods, 24% on Japan, 26% on India, 49% on Cambodia, 46% on Vietnam, 37% on Bangladesh, and 25% on South Korea, to name a few countries. China was singled out for an 84% tariff, which, added to existing and previously announced tariffs, brings the cumulative tax on their exports to the U.S. to either 125 or 145%, depending on how you add them up.
  • As of April 10, this tariff plan has been “paused” for most countries, for 90 days, but of course, this may change.
  • Chinese-made goods are NOT subject to this pause, meaning that tariffs on them go into effect immediately.
• Mexico and Canada were not included in the global tariff plan. In March, Trump imposed 25% tariffs on all Mexican and Canadian goods, but lifted them after two days. As it stands now, tariffs have been delayed on goods compliant with the USMCA trade agreement, which covers about 50% of imports from Mexico and 38% of imports from Canada. Goods not covered by the USMCA agreement face a 25% tariff, as well as steel and aluminum, and some automobiles and car parts, whether imported under the USMCA agreement or not. (complicated enough?)
• These tariffs are a significant departure from previous U.S. policy which has generally been favorable to international trade. The U.S. (and it’s major trading partners) did have existing tariffs on many imports, but these have mostly been less than 5% of the value of goods on average.
• The top exporters to the United States are; The European Union (when measured as a bloc), Mexico, China, Canada and the ASEAN bloc (a group of 10 Southeast Asian states).

GLOBAL RESPONSE

• Many of the countries affected will (or already have) retaliated, placing tariffs on American exports. This will hinder U.S. efforts to sell goods abroad, including agricultural products.
• China, in particular, has assessed an 125% import tax on most U.S. goods

EFFECTS ON U.S. AND NORTHEAST AGRICULTURE

• It should be noted, that some sectors of Northeast agriculture may benefit from protection from imports.
  • Fresh market vegetable growers may see a reduction in competition from Mexican imports
  • Ornamental horticulture growers may see some reduction in imports from Canada
• Most agricultural sectors, however, will be negatively impacted
• Dairy: Roughly 17% of US Dairy production is exported, with Mexico and China as top destinations. This includes some Northeast production, and even for producers who are not directly supplying export markets, they may see depressed wholesale milk prices as a result of lost export markets. Most dairy exports to Mexico are believed to fall under the USMCA agreement and thus should not be negatively impacted by retaliatory tariffs at this time.
• Grains and Row Crops: These commodities are heavily influenced by international trade. China, a major importer of soybeans and corn, has already shifted much of its purchasing from the U.S. to South America, and this trade war will accelerate that trend.
  • Grain and oilseed commodity prices were already depressed before the tariff announcements, due to large crops worldwide, so the tariff announcements have not affected futures markets as much as might have been expected. However, these trade disputes do make price increases for row crops less likely.
• Forest products:
  • Softwood producers typically face stiff competition from Canadian imports, so tariffs on Canadian products may somewhat shield them from competition, and raise domestic softwood lumber prices.
  • Hardwood producers are much more dependent on international markets, particularly China, and the tariff disputes will be a negative impact on already soft markets.
• Other sectors are more case-by-case, but in general, the loss of export opportunities for large portions of U.S. agricultural products, could depress wholesale markets as that surplus product has to find a home domestically.

MACROECONOMIC EFFECTS FOR THE UNITED STATES

• A lot depends on what happens in the coming days and weeks in terms of changes, but if the tariffs are enacted as proposed on April 9:
  • The costs of imported goods in the United States will rise
  • American manufacturers who use imported parts or inputs will face higher costs
  • The ability of American farmers and manufacturers to sell their goods abroad will deteriorate
  • Some U.S. companies will benefit by being protected from cheaper imports, but these benefits will likely be outweighed by the costs detailed above.
  • According to Moody’s Analytics, the medium-term impacts will be an increase in overall inflation of about 1% above the baseline, a decrease in GDP of about 1.5-2.0%, and an increase in U.S. unemployment due to a slowdown in economic activity.
  • The trade disputes increase the risk of recession in 2026 to above 50%, although forecasts suggest that it would be a mild one.
  • Longer-term, there is a possibility that high tariffs could increase U.S. manufacturing in some sectors, however, this would require some stability and certainty in the U.S. tariff scheme so companies can make long-term investments, something currently lacking.

The U.S. economy was in good shape prior to the emergence of these trade and tariff disputes, and still shows some elements of strength. GDP growth in 2024 came in at 2.4%, and unemployment ended the year at 4.1%.

While official data on Q1 GDP growth is not yet available, estimates suggest that economic growth has slowed, even before the announcement of the new tariffs. Most estimates indicate that GDP was positive for Q1, ranging from 1.0-2.1%. Forecasts are for GDP growth to continue to decelerate with a risk of a mild recession depending on how trade disputes unfold.

Inflation has continued to slow, with the first month-over-month decline in prices seen in years occurring in March, due to falling energy prices. While prices fell 0.1% from February to March, they still increased 2.4%, year-over-year, slightly above the Federal Reserve’s target rate of 2.0%.

The U.S. labor market remains resilient, with headline unemployment coming in at 4.2% for March 2025. 

While government employment continues to decline significantly, the overall economy still posted a net gain of 228,000 jobs in March.

The Northeast Farm Economy

Dairy: 

Avg. Price per Cwt.	2023	2024	2025	2026 Forecast
Boston Blend Price1	20.01	21.44	19.92	19.76
Avg. WNY Blend2	18.97	20.41	18.46	18.57
USDA All-Milk Price3	20.34	22.61	21.10	N/A

Special Note – Farm Credit East continues to closely monitor the latest developments on Highly Pathogenic Avian Influenza (HPAI) in Dairy Cattle:

• HPAI has been confirmed in dairy cattle in multiple U.S. states over the last year, however cases have only been confirmed in California, Idaho and Nevada within the last 30 days as of April 14, 2025. There are, as of publication, no known cases in the Northeast. 
• While wild migratory birds are believed to be the initial source of infection in Texas, subsequent infections now appear to be linked to cow-to-cow spread, movement of infected cattle and indirect transmission due to human and equipment vectors. 

Human Infection:

• Human infection has been limited, however, numerous human infections and one fatality have been reported in the United States, mainly among farm workers with close contact with infected animals.
• Farmworkers and service providers should exercise caution among sick or dead birds and infected animals. This includes wearing PPE and disinfecting following exposure.

Preventing the Spread:

• Farmers should exercise increased biosecurity protocols, including any farm visitors or service providers. This may include using disposable booties, gloves, and possibly additional PPE depending on level of contact with animals. 

Industry Impact:

• USDA is encouraging producers and veterinarians to minimize dairy cattle movement. Unlike in poultry flocks where HPAI is fatal, among the dairies whose herds are exhibiting symptoms, the affected animals have recovered with little associated mortality reported.
• USDA has announced a national milk testing strategy requiring that milk samples be collected for testing and reporting of HPAI positives nationwide, and 45 states have signed up for the program.

Food System Impact:

• Because most milk and dairy products are pasteurized before entering the market, there is no concern about the safety of the commercial milk supply, or that this circumstance poses a risk to consumer health. Testing has shown that the H5N1 virus is easily killed via commercial pasteurization.
• There have been recalls of some raw (unpasteurized) milk, and the FDA advises against its consumption.  

Market Overview

• The national milk cow herd came in slightly higher larger than last year’s February numbers. The national milk cow herd was at 9.405 million head, above the February 2024 figure of 9.343 million head. Milk per cow was down fairly significantly from the prior year, and overall milk production was down -2.5% from February 2024. 
• New York was flat in terms of cow numbers from this time last year (at 630,000 head), and production per cow was down, resulting in a decrease in milk production of -2.0%. Nationally, most states showed decreases. Idaho (+4.7%) and Texas (+2.4%) showed gains, while California (-7.1%), New Mexico (-3.9%), New York (-2.0%), Pennsylvania (-2.5%), Vermont (-4.0%), and Wisconsin (-3.6%) showed declines.
• Feed and fuel costs have declined over the last year, but other input costs have risen. Meanwhile, milk prices have started to decline. Income-over-feed cost calculations, such as the DMC margin, are projected to range from $13.85-9.29/cwt. in 2025, with the low point anticipated in June.

Timber and Forest Products: 

Timber and Logging

• Timber harvest operations were steady during winter, with the cold weather that is crucial for minimizing ground disturbance and accessing wetter soils persisting until late March after a brief warm up in February.
• Timberland owners continued to experience delivery restrictions from mills due to high inventory levels as a result of favorable logging conditions and landowners had to quickly pivot to alternatives to keep wood moving. 
• Demand for quality timberland assets remain solid and continues to support elevated timberland valuations as experienced over the past few years. Two timberland transactions greater than 20,000 acres closed in Maine during Q1 in the $800-$900/acre range.

Softwood, Hardwood, and Pulpwood Markets

• The aggressive trade policy stance of the U.S. administration has created anxiety and uncertainty in the industry, potentially altering the flow and consumption of timber across the U.S.-Canadian border. Potential exclusions and retaliatory measures are likely to impact sourcing strategies.
• Regional pulp mills saw increased timber inventories during the busy season, leading to cautious buying. However, the SAPPI mill in Skowhegan, ME is undergoing upgrades that will improve consumption, potentially increasing demand for pulpwood by the end of the year.
• Most spruce fir mills are currently experiencing high log inventories. Log pricing and demand has remained stable despite full inventories, as spruce-fir lumber prices and sales steadily improved during the quarter. Spruce fir mills are now consistently benefitting from positive EBITDA for the first time in a few years.
• The eastern white pine lumber market experienced stable pricing during the quarter, with demand for pine logs on a declining trend. Pine mills with diversified operations and/or value-added products continue to perform better than others.
• Hardwood mills have seen slight improvements in hard maple and soft maple lumber demand and pricing. Demand for yellow birch remains limited, while red oak demand is underwhelming due to alternative sources found by Asian export markets. The market for industrial logs softened due to reduced infrastructure spending under the new administration, affecting pricing competitiveness. Hardwood sawmill output for the eastern U.S. is down 19% in 2025 Q1 compared to the prior year period.

Cash Field Crops: 

National:	2021/22	2022/23	2023/24	2024/25 F
Corn Area Harvested (Mil. Acres)	85.0	78.7	86.5	82.9
Corn Yield/Acre (bu.)	176.7	173.4	177.3	179.3
Corn Price ($/bu.)	$6.00	$6.54	$4.55	$4.35
Soybeans Area Harvested (Mil. Acres)	86.3	86.2	82.3	86.1
Soybean Yield/Acre	51.7	49.6	50.6	50.7
Soybean Price ($/bu.)	$13.30	$14.20	$12.40	$9.95

Source: USDA WASDE 

• Prices for grains and oilseeds have declined significantly since the 2022/23 crop year, and margins are negative for many cash field producers as market prices are not covering total production costs.
• Corn and soybean prices further weakened last quarter amid trade and biofuel policy uncertainty and a record-large South American soybean harvest. A weaker U.S. dollar helps export prospects but is not significant enough to offset other bearish market influences.
• Spring planting intentions suggest that U.S. farmers will plant significantly more acres to corn and less to soybeans and wheat, with corn offering the greater profit potential. Margin opportunities remain slim however, with prices of major row crops at four-year lows. 
• May 2025 corn futures are trading at $4.90/bu, and May soybean futures at $10.43/bu, as of April 14, 2025.⁴   

Livestock: 

• USDA forecasts continued strong pricing for choice steers with 2024 average prices coming in at $187.12/cwt. and 2025 average prices forecast to average $206.00. Cattle and beef prices are likely to remain elevated for at least another 18-24 months due to low herd sizes. 
• Broiler prices are forecast relatively flat at $1.29 in 2024 and $1.33 in 2025. Egg prices have sharply increased and are forecast to average $3.03 in 2024 and $3.94 in 2025, depending on what happens with Avian Influenza.⁵  
• Strong demand continues to support high prices for meats and eggs. U.S. per capita consumption of meat and poultry rose 1.3% in 2024 to 228 pounds, despite much higher retail price levels. 
• Non-feed input costs, such as labor, have significantly increased, but the falling cost of feed has provided some inflation relief for producers. Corn prices have fallen 27% over the last year, hay prices were down 21%, and soybeans have declined 21%. 
• As with many other agricultural commodities, trade uncertainty is a concern for this sector. 

Fruit: 

Apples

• National fresh market apple holdings, as of April 2025 were 66.3 million bushels, down 3% y-o-y, but 18% above the 5-year average. Similarly, New York’s apple holdings were 6.9 million bushels, down 5%, y-o-y, but 22% above the 5-year average.⁶ 
• 2024 was a relatively good growing season, although there were some localized issues of hail and frosts. Pricing and movement has been good, but the crop was large. NY’s apple production came in at 27.1 million bushels, a substantial increase over the prior year. Washington’s harvest came in at 156 million bushels, 12% above 2023.
• Tariffs and trade barriers could be negative for fresh market growers, positive for processing growers (the U.S. imports a lot of apple juice concentrate). 

Wine/Craft Beverage

• Visitor traffic at tasting rooms continues to be down, but sales per visitor remain solid as well as online sales. Overall, sales are consistent with a downward trend from the COVID peak. A freeze event in Western NY limited yields in some areas, but the 2024 crop was quite good in terms of quality and adequate yield. Labor is a topic of constant concern, but tipping has permanently changed the tasting room staff pay scale to the positive and adequate customer-service help is generally available. With a decrease in traffic to wineries, having a thriving wine club or online sales platform is essential for top results. Profits at wineries and other craft beverage businesses generally reverted to pre-COVID levels last year.

Cranberries

• 2024 national production came to 8.2 million barrels, 2% greater than 2023, and above expectations. Wisconsin’s production increased from the prior year. The larger crop has put downward pressure on pricing.  

Vegetables/Potatoes: 

Fresh market vegetables

• Little news here as crops have not been planted yet in most areas.

Processing vegetables

• Major processors in Western NY are long on inventory following the COVID-era boom when everyone stocked up on canned goods. They are now cutting back on contracted volumes in an attempt to bring supplies into better balance with demand. 

Potatoes

• The 2024 Maine potato harvest was completed in a timely manner by mid-October.  The overall average yield has come in approximately 20 cwt/acre more than last year’s average. Crop quality has generally been excellent; however, some minor storage issues have surfaced since harvest but are not nearly as severe as 2023’s crop that experienced much higher levels of storage breakdown.  Most issues have been in the french fry processing inventory and have generally been dealt with by moving the inventory to the local processors, resulting in little to no actual loss to the grower.  It does not appear at this time that Maine should see a repeat of that situation with the 2024 crop.     
• USDA currently estimates Maine’s overall average yield at 340 cwt per acre across the 53,700 harvested acres for a total harvest of 18.26 million cwt.  That is an increase of 1.46 million cwt from the 2023 crop or nearly a 9% increase.  Some individual growers ran out of storage and had to rent additional storage to get their crop under cover.  Nationally, USDA estimates US potato production to be down by 22.8 million cwt or 5.1%.  Washington, Idaho, Minnesota, North Dakota and Wisconsin are all forecast to have reduced production from last year due to a combination of acreage cuts and slightly lower average yields.  The combined reduction for these five states is 20.55 million cwt, while other states, like Maine saw increased production or production similar to last year.  
• Presently the majority of the Maine crop is being shipped under contract.  Contract volumes are unchanged from last year, while contract prices are flat to down 1-2%.  With the increased average yields and improved quality from 2023, most Maine processing growers should see higher gross incomes when compared to the 2023 crop.  Demand for french fries appears to be good globally, as the 3rd quarter saw a 1.2% increase in the global french fry trade, the equivalent of 2.28BN pounds.  
• Open market table prices have generally improved since the end of harvest across the U.S. but remain approximately 7% lower than last year in most shipping areas, with a few exceptions.  An increased potato crop in Canada, along with solid early season disappearance is likely contributing to the reduction in pricing.  Quality is also improved in the tablestock crop, resulting in reduced shrink as compared to 2023.  This will help to mute the effects of the lower pricing.
• The seed sector in Maine is currently seeing good demand for seed.  Shipments have begun into areas of Florida for the spring potato crop there.  Pricing for seed has generally seen an increase particularly in the pricing for local processing growers.  This is mainly due to the processing growers contract value increase over the last few years.  These pricing adjustments are seen as necessary to offset what has been an ongoing cost of production increase in the seed sector.  Virus levels for Maine seed are not yet known, but field readings were once again low (a good thing) and seed growers are optimistic that overall virus levels will trend downward from the past few years.  

Aquatic/Fishing: 

• Lobster:
  • Catch has reportedly been good for most lobstermen. Profitability has generally been good, with stable pricing. 
• Scallops:
  • The 2024-25 scallop season has been tough for fishermen. Pricing has improved, but open area landings continue to decline along with the lack of large scallops caught. Of the YTD landings 46% are 10-20 and 38% of landings are 20-30 size class, plus overall landings have declined.
  • The 2025-2026 Fishing Year is 99% determined with the decision from the New England Marine Fisheries Council to grant 24 open Days-At-Sea, an increase of 4 days, and two closed area trips of 12M lbs. (Area I and Area II) – a reduction of 12M lbs.  
  • We can expect more stress to scallop operations’ cash flow in 2025.
• Groundfish:
  • Pricing and catch has been stable over the prior year. Quota measures from NOAA have decreased catch limits in a few sectors while others remain flat year over year.

Greenhouse, Nursery and Sod: 

• Early spring shipments have been strong, and landscapers are off to an early start. Industry leaders are hoping for favorable weather on weekends during the key selling season of mid-April to mid-June. 
• The landscape industry has been more steady and some nursery growers report that sales to landscapers and rewholesalers have helped keep their sales volume up over the summer and fall. 
• Inventories have substantially increased from the previous couple of years, and some anticipate that it may be more of a “buyer’s market” for nursery stock next year. 
• With the addition of Walmart, most green goods sales at big box stores are now pay-by-scan or vendor-managed. This has elevated the quality and assortment of plant material at chain stores, but shifted inventory costs back onto growers.
• For independent garden centers and nurseries, results vary, with some seeing continued strong profitability while others are facing more challenges. 

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Editor: Chris Laughton

Contributors: Chris Laughton

View previous editions of the KEP

Farm Credit East Disclaimer: The information provided in this communication/newsletter is not intended to be investment, tax, or legal advice and should not be relied upon by recipients for such purposes. Farm Credit East does not make any representation or warranty regarding the content, and disclaims any responsibility for the information, materials, third-party opinions, and data included in this report. In no event will Farm Credit East be liable for any decision made or actions taken by any person or persons relying on the information contained in this report.

Tags: ag economy, apple, aquatic, cash field, dairy, forestry, fruit, greenhouse, livestock, nursery, timber, vegetable