Industry Insights

January update

The squeeze continues.

The agricultural economy continues to face challenges, with tight profit margins expected to persist for many commodities into 2025. While production costs are anticipated to decrease or stabilize throughout the next year, they will still be the fourth highest on record (following 2022, 2023 and 2024). These high costs, combined with forecasted decade-low commodity prices, will continue to pressure producers' profitability. More than half of farmers expect that financial conditions for the agricultural sector will worsen over the next year. (Exceptions include the cattle and dairy industries which are benefitting from lower feed costs.) Good risk management strategies will be important to producers’ bottom lines in 2025.

In the short-term producers expect the profitability squeeze to continue. However, many remain optimistic about the five-year outlook, with more than 50% expecting a return to more profitable times for agriculture.

Industry insights

AgWest Farm Credit’s industry research team covers the state of major agricultural commodities in Alaska, Arizona, California, Idaho, Montana, Oregon and Washington. The market updates are based on various sources, and include boots-on-the-ground insights from AgWest’s own lending, appraisal and crop insurance teams across the West. For industry specific information, news and upcoming events, check out our industry pages below.