If there’s a year where cost management really matters, 2025 might be it.

Market prices for corn and soybeans are projected to fall well below production costs, leaving farmers facing a significant per-acre shortfall. Just how steep?

According to University of Missouri Extension economist Ben Brown, losses could reach nearly $130 per acre for corn and $53 per acre for soybeans.

“I really think 2025 is going to be a pretty challenging year financially,” he said. “It’s high-cost producers that are the ones that are struggling.”

Speaking at the MU Crop Management Conference, Brown emphasized the importance of managing costs, especially if prices decline further than current projections. He outlined several budget areas where farmers might find some relief:

Interest rates. Operating interest rates are expected to drop slightly, with estimates at 7.75% for 2024-25, down from last year’s 9%. While still high, this reduction could ease some financial pressure for farmers.

Fertilizer. Anhydrous ammonia costs are estimated at 45 cents per pound of nitrogen for 2025, down slightly from 2024. However, potash and phosphorus markets may not provide as much relief as anticipated.

Equipment. Equipment costs show the largest potential savings. Demand for tractors and combines has dropped significantly, about 20% for tractors, 30% for combines. “We’ve seen equipment prices come down, even in the used equipment market,” Brown added. However, sales are slower, as many producers are still paying off higher-cost equipment purchased in previous years.

Fuel. Diesel prices are expected to average $3.25 per gallon in 2025, a notable drop from $4 per gallon last year, offering another area of potential savings in crop budgets.

Brown pointed out that chemical costs remain stubbornly high. Fungicides, pesticides and herbicides continue to weigh on budgets because of both high prices and usage levels, he said, leaving this as a persistent challenge.

Farmers look for ways to save money, like adjusting fertilizer and chemical use. Testing different rates helps balance costs and yields.

Strategic approach to tar spot

For many corn farmers, tar spot remains a concern in 2025. But it might be an area to trim chemical expenses.

“There’s going to be a lot of pushes to spray multiple times this year,” said Mandy Bish, MU Extension plant pathologist, “but corn prices might not even get to $4 per bushel.”

She warned farmers that yield protection is not the same thing as a positive return on investment.

So, what is the best way to optimize fungicide applications?

Bish highlighted data showing that when tar spot begins to move into the upper canopy and weather conditions favor its spread, the best return on investment comes from a single fungicide pass between VT and R3. A two-pass application didn’t protect enough yield to cover the extra cost.

“You need to reach $80 per acre to really pay off a two-pass fungicide application, with an average fungicide application cost of $40 per acre,” she noted. “With an earlier application followed by an application at VT, there was yield protection but not substantial enough to end up with paying off the chemical application.”

Bish recommended farmers use the Corn Fungicide ROI Calculator from the Crop Protection Network to help make decisions this growing season. Farmers can enter disease severity (high or low), the expected yield, commodity prices and product preference and price, and the calculator does the rest. It uses university data from across the corn states to develop the likelihood of a return on investment.

Make in-season adjustments ‘as needed’

Cutting costs in soybeans might mean reducing preplant fertilizer rates, but that could affect plant growth. To offset this, farmers may need to focus on in-season potassium applications.

Carrie Ortel, assistant professor and Extension specialist at Virginia Tech, found that applying potassium fertilizer 15 to 30 days after R1 can be a moneymaking solution for potassium-deficient crops.

“Those applications are not going to be profitable if you were already sufficient in potassium,” she noted. “Don’t guess. Everything with potassium fertilizer and nutrient management is going to start with a soil test and then following up with a tissue test to make sure that, in fact, you are sufficient, and you’re monitoring for that crop nutrient status.”

Reviewing soil test results is key, especially if plants are severely deficient, to understand and address the issue.

“You’ve got 20 or 45 days after R1 to get that application out,” Ortel added. “So that gives you the time that you need to respond and react accordingly.”

Understanding nitrogen needs

Reductions in nitrogen application rates should come with an on-farm trial, said John Lory, MU Extension state nutrient management specialist.

“If we’re going to cut close to the bone and cut back our rates because of economics,” he said, “we need to use that as a learning opportunity.”

Lory advised conducting comparison strips — one with a standard rate and one with the adjusted rated — to compare results. This way, farmers can learn if cutting back was a good idea or not, instead of just guessing based on how yields turned out. Then in the good years, and also in the bad years, there is more information to work with to make decisions about how to move forward.

“Sometimes these kinds of economic challenges are an opportunity,” he added. “You’re going to be forced to make some changes in your management. This kind of information allows you to make tactical decisions and understand what the implications of those are.”