Farm Credit East Knowledge Exchange Industry Snapshots

Volume 19, Issue 8
August 2025

The National Economy

U.S. Growth has Slowed Amid Rising Headwinds

• GDP contracted by 0.5% in Q1 2025, marking the first economic decline in three years.
• The decline in GDP was driven by weaker consumer spending and significantly increased imports, as businesses rushed to import goods ahead of new tariffs.
• A modest rebound is expected when the Q2 numbers are released, with some forecasts projecting 3% growth, though uncertainty remains high.

Tariffs and Trade Policy Uncertainty

• The expiration of a 90-day tariff pause on July 9 could trigger higher import taxes on goods from key partners like Canada, the EU, and India. There is, however, considerable uncertainty as to what these tariff rates will be and when they will imposed.
• Trading partners are likely to retaliate if the U.S. imposes high tariffs on their goods. This could negatively impact U.S. agricultural exports.

Inflation and Interest Rates

• Inflation, which had cooled earlier in the year, could reaccelerate due to tariffs and potential oil price spikes from geopolitical tensions.
• The Federal Reserve is holding the Federal Funds Rate steady, awaiting clearer signals before making cuts.
• The Fed’s median projection sees PCE inflation at 3.0% and unemployment at 4.5% by year-end.

Labor Market and Consumer Sentiment

• While unemployment remains low, jobless claims are rising and wage growth is slowing.
• Consumer confidence has dipped, with spending on recreation and travel notably down.
• The Conference Board’s Leading Economic Index has declined for six straight months, signaling an increased risk of recession.

Currency and Global Positioning

• The U.S. dollar has lost value relative to other currencies by over 10% in the past six months, reflecting investor concerns over fiscal policy and inflation.
• A weaker dollar may help exporters but raises import costs, adding to inflationary pressures.

Outlook: Cloudy with a Chance of Volatility

• The next 60 days are pivotal: tariff decisions, fiscal spending negotiations, consumer spending, and Fed policy could all shift the trajectory.
• Most forecasts suggest modest growth (1.4%–1.9%) for 2025 overall, with risks tilted to the downside.

The Northeast Farm Economy

Dairy:

Avg. Price per Cwt.	2023	2024	2025 Forecast	2026 Forecast
Boston Blend Price1	20.01	21.44	20.72	21.07
Avg. WNY Blend2	18.97	20.41	19.79	20.04
USDA All-Milk Price3	20.34	22.61	21.95	21.30

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

• HPAI does remain a concern, but the risk to the Northeast has waned in recent weeks and months. In the past 30 days only 1 new confirmed case has been documented in cattle, in a herd in Arizona. 

Market Overview

• The national milk cow herd came in slightly larger than last year’s May numbers. The national milk cow herd was at 9.445 million head, above the May 2024 figure of 9.331 million head. Milk per cow was up slightly from the prior year, and overall milk production was up 1.6% from May 2024. 
• New York saw an increase in cow numbers from this time last year (+8,000 head to 638,000 head), and production per cow was flat, resulting in an increase in milk production of 1.3%. Nationally, most states showed increases. Idaho (+6.0%), New Mexico (+0.2%), Texas (+8.9%), and Vermont (+0.5%), showed gains, while California (-1.8%), and Wisconsin (-0.1%) showed declines. Pennsylvania was flat, year-over-year. 
• 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 $13.85-10.42/cwt. in 2025, with the low point in April.
• There is concern over forage and silage quality and quantity due to the wet spring conditions. The first cutting for hay was generally of poor quality. 

Timber and Forest Products: 

Timber, Timberland, and Logging

• Unusually wet conditions extended the spring mud season by three weeks, making forest roads impassable and delaying harvesting and hauling operations. As of early July, operations are beginning to recover, but there's substantial ground to make up.
• After a winter of oversupply, mills began to experience shortages due to delivery disruptions in spring.
• The Canadian spruce budworm outbreak remains a complication for both landowners and markets, as salvage operations for balsam fir have led softwood markets to become oversupplied with fir. Mills always prefer spruce over fir due to the shorter drying time required, and have pressured suppliers to limit the amount of fir they are receiving.
• Timberland market deal flow slowed considerably during prime viewing season as elevated global economic and tariff risk led many sellers to hit the pause button on new listings.

Softwood, Hardwood, and Pulpwood Markets

• The U.S.-Canada softwood lumber dispute remains unresolved. With the expiration of the temporary 90-day tariff reprieve looming, most producers/operators have adopted a cautious approach. Any changes in trade policy could significantly impact pricing and supply chains across the region.
• Regional pulp mill production during the quarter was limited by several planned and unplanned maintenance outages. Mills continued to purchase pulpwood during the quarter for supply chain stability and as a result, hardwood pulp inventories remain elevated.
• Despite continued headwinds in the housing market and elevated shipments of Canadian lumber ahead of expected duty increases which temporarily reduced pricing, regional demand for spruce and fir logs has remained solid, with pricing improving slightly during the quarter; continued improvement is expected through summer.  SPF sawmill producers continue to operate at or above break-even levels resulting in positive EBITDA, albeit at lower levels than 4Q’24 and 1Q’25. This is an improvement from the past few years
• The eastern white pine lumber market experienced improving pricing during the quarter, with demand for pine logs steady. Pine mills with diversified operations and/or value-added products continue to perform better than others.
• Hardwood markets continued to slowly build momentum during the quarter, particularly for higher quality grades of hard maple and red oak. Demand for hardwood logs increased across all grades as many mills begin to replenish inventories from extremely low levels.

Cash Field Crops:

National:	2022/23	2023/24	2024/25	2025/26 F
Corn Area Harvested (Mil. Acres)	78.7	86.5	82.9	87.4
Corn Yield/Acre (bu.)	173.4	177.3	179.3	181.0
Corn Price ($/bu.)	$6.54	$4.55	$4.35	$4.20
Soybeans Area Harvested (Mil. Acres)	86.2	82.3	86.1	82.7
Soybean Yield/Acre	49.6	50.6	50.7	52.5
Soybean Price ($/bu.)	$14.20	$12.40	$9.95	$10.25

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.
• Excessive moisture delayed or prevented planting of crops for many Northeast producers. Product movement has been slow as well for stored crops.
• September 2025 corn futures are trading at $4.03/bu, and soybean futures at $10.13/bu, as of July 8, 2025.⁴   

Livestock:

• USDA forecasts continued strong pricing for choice steers with 2025 average prices coming in at $221.51/cwt. and 2026 average prices forecast to average $229.00. 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 $1.34 in 2025 and $1.36 in 2026. Despite recent declines, egg prices remain elevated and are forecast to average $4.05 in 2025, declining to $2.16 in 2026, depending on what happens with Avian Influenza.⁵  Egg production is expanding with decentralized contract barns in New York.
• 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 June 2025 were 39.8 million bushels, down 2% y-o-y, but still above the 5-year average. Similarly, New York’s apple holdings were 4.1 million bushels, down 2%, y-o-y, but 29% 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. is a net exporter of fresh apples, but imports a lot of apple juice concentrate).
• Pollination season was good, so the forecast is for an average to above-average Northeast crop in 2025. Producers are hoping for improved margins this year, as pricing has been fairly weak for last year’s crop.
• Early indications suggest a large 2025 Northwest crop, with some uncertainty due to summer weather.

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 expections. Wisconsin’s production increased from the prior year. The larger crop has put downward pressure on pricing, as this industry is back into an oversupply situation. Juice sales are down by about 8%. International and ingredients sales have increased, but are insufficient to make up losses in other areas.

Vegetables/Potatoes:

Fresh market vegetables

• Reports from New Jersey suggest that it has been a decent crop year so far, but that pricing has been a bit weak compared to previous years.

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.
• In New Jersey, a major produce processing facility (Seabrook Brothers & Sons) had a roof collapse, shutting down most of their operations. This facility will be offline until it can be reconstructed which will take substantial time. In the meantime, numerous growers who ship to this facility will have to pivot to other buyers and markets.

Aquatic / Fishing

Lobster

• Catch has reportedly been good for most lobstermen. Profitability has generally been good, with stable pricing.

Scallops

• The scallop industry has seen a positive turnaround since last year. Their catch has been strong, particularly in some formerly closed fishing areas that have recently been opened. Pricing has also been favorable, averaging over $17 across all sizes.

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. Haddock, in particular, had the catch quota reduced.

Greenhouse, Nursery and Sod:

• Sales for greenhouse and nursery businesses have been flat to slightly down, year-over-year. Rainy weather in April and May hurt sales. June was reportedly strong, which made up for some of the lost sales. Landscapers have been very busy, supporting the nursery sector.
• 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