What the Corn/Soy Ratio Signals for Price Trends

Trump’s Tariffs Are Changing Farmers’ Plans – More Soy, Less Corn?

American farmers may not make the expected major shift toward corn this year due to the tariffs imposed by President Donald Trump.

It was expected that producers would plant the most corn in the last five years due to limited supplies. However, the tariffs on products from Canada, Mexico, and China are now tipping key market indicators in favor of soybeans.

Corn prices, which rose earlier this year, have now erased nearly all of their gains for 2025, as tariffs threaten farmers’ access to key export markets. The fertilizer sector is also heavily affected – fertilizer costs have increased, and growing corn requires more fertilizer compared to soybeans.

“This week, corn lost some of its shine in favor of soybeans,” says farmer Benjamin Rientsch from Iowa, who is now considering whether to abandon his original plan for more corn and less soybeans.

Market Indicators and Farmers’ Decisions

The so-called corn-to-soy ratio – a key indicator of what farmers will plant – is currently around 2.2, which is an increase from the year’s lowest level of 2.04 on February 19. Typically, a ratio above 2.5 indicates that farmers will prefer soybeans over corn – the main crop in the U.S.

Last month, the U.S. Department of Agriculture (USDA) forecasted that farmers will plant 94 million acres of corn in 2025, up from 90.6 million in 2024. The area planted with soybeans is expected to decline to 84 million acres, down from 87.1 million the previous year.

Although market signals still support larger corn plantings, the decline in corn futures is causing some producers to rethink their plans.

“It is difficult to make a decision right now,” says Ryan Friders, a farmer from Illinois and a board member of the American Soybean Association.

Tariffs and the Surge in Fertilizer Prices

Fertilizer prices have also risen, as the U.S. receives 85% of its potash from Canada. Global potash prices surged by 20% after the tariffs were announced last month.

Farmers managed to import some of the required fertilizers before the additional 10% tariff went into effect, but this price hike could negatively affect key fall fertilizer applications.

“If we don’t have enough fertilizers for spring planting, it could be catastrophic for farmers and have a serious impact on food prices,” warns Corey Rosenbush, CEO of The Fertilizer Institute, a trade organization based near Washington.

In addition to potash, the U.S. imports 25% of nitrogen fertilizers and 20% of sulfur from Canada – two more critical components for corn production.

Farmers Facing a Tough Decision

American farmers are already suffering losses for the third consecutive year with almost all major crops.

“Additional costs and shrinking markets for American agricultural products could lead to an economic burden that some farmers simply won’t be able to bear,” comments Zippy Duval, President of the American Farm Bureau Federation.

How the situation will impact agricultural markets in the U.S. and globally remains to be seen.