Three Key Trends in Agribusiness Right Now
By Barry Benson, Head of Agribusiness Banking
Agriculture is constantly evolving, shaped by economic forces, supply and demand cycles, and technological advancements. Today, three key trends are significantly impacting farmers, ranchers and agribusinesses.
1. Record-High Cattle Prices
If you’ve noticed higher beef prices, it’s because the U.S. cattle market is experiencing historically high prices due to a smaller overall cow herd. Market stress and prolonged drought conditions have reduced calf production, leading to lower beef supply and increased prices.
During the pandemic, processing plant slowdowns temporarily lowered fat cattle prices, but demand for high-quality beef rebounded strongly. Many consumers who started cooking steaks at home during lockdowns continued the habit, fueling demand even as restaurant dining returned to normal.
At the same time, ranchers reduced herd sizes due to financial losses and drought-related challenges. Because cattle production operates on a long cycle, supply has not yet caught up with demand. While some producers are rebuilding, the process is slow, meaning beef prices will likely remain high.
2. Economic Pressures
Beyond supply and demand, economic factors are shaping agribusiness today. Inflation and interest rates continue to impact producers, affecting everything from operating loans to input costs like feed, fertilizer and equipment.
While interest rates were expected to decline this year, economic uncertainty, compounded by trade policies and tariffs, has made the outlook less clear. Tariffs on key agricultural inputs, including fertilizers and chemicals, can drive up production costs, putting additional strain on producers already facing tight margins. The impact isn’t just domestic; much of U.S. agriculture relies heavily on exports, meaning shifting trade policies can affect international demand for U.S. ag products.
3. Technology Is Revolutionizing Agriculture
Advancements in technology are transforming agribusiness, enabling data-driven decision-making across livestock and crop production.
In the dairy and beef industries, genetic selection and artificial insemination are improving herd productivity. Many dairies now use heifer-sexed semen to breed top cows for milk while using beef genetics on lower-performing cows to produce higher-value beef calves. With record-high fat cattle prices, beef-on-dairy calves have surged in value, increasing from $0–$250 in previous years to over $850 today.
In row cropping, precision agriculture is helping farmers optimize efficiency. GPS-based planting, soil sampling and targeted input applications allow farmers to place the right amount of water, fertilizer and seed exactly where needed. This can improve yields while cutting costs.
The Future of Agribusiness
Agriculture is cyclical, and while challenges like rising costs and supply constraints persist, innovation presents new opportunities. Success in today’s landscape requires adaptability.
At FNBO, we understand the unique challenges agribusinesses face. As a family-owned bank with deep roots in agriculture, we provide expertise and personalized financial solutions to help producers navigate the ups and downs of the industry.
If you’re looking for insights on managing risk, growing your operation or financing your next big move, our team is here to help. To learn more, visit FNBO.com/agribusiness.
