So, with Hurricane Helene having devastated the Henderson County agricultural economy in 2024, with low prices for ag products still an issue, with input costs going up and tariffs on the horizon, what does the picture for agriculture look like in 2025. NCSU economist Dr. Jeffrey Dorfman recently opined on this subject in his annual outlook in the NC State Economist. Here are a few of his findings:
Dorfman says that it may not be hard to beat the scenario NC producers experienced in 2024. With the drought, Hurricanes and excessive rainfall that permeated the state, chances are things will look up in 2025. Well, that’s the way the odds should stack up at least.
He projects that prices for most non-livestock commodities will be flat to slightly down compared to 2024. But with better weather and lower fertilizer and fuel prices, it might give NC farmers an upside as production costs should be lower and yields higher.
There won’t be any major shifts in acres planted in the state according to Dorfman. While exports are not a major factor in Henderson County crops, they can have a ripple effect when other parts of the country can’t export as much as they normally do. So, uncertainty over trade policy may have an impact on planting or commodities and prices of all crops.
We’ve heard a lot about tariffs in the news lately. This can have an impact on our local farmers if trade is stifled enough to create oversupplies. If tariffs the US institutes reduces imports, this mostly affects fruits and vegetables in the country and can potentially increase demand for domestic products which usually results in higher prices for those products.
However, if retaliatory tariffs increase the prices of our exports, it can cause a glut of products and result in reduced prices of domestic products. We have seen this in recent years with apples. Dorfman cautions about this type of tariff and how it can affect all farmers as most all ag products rely on exports to keep prices up.
Dorfman predicts some good news on the input side as we see prices for diesel and fertilizer fall closer to the pre-pandemic levels. He also sees some positive news on labor as the Adverse Effect Wage Rate for H-2A labor will have a smaller increase in 2025 than in recent years.
Overall, Dorfman sees some upside in 2025 as long as production costs fall more than prices. He doesn’t anticipate a recession at this point barring any trade wars. He expects inflation and interest rates to continue cooling. If we can avoid catastrophic weather, he’s looking for a “fair-to-middling year” for agriculture. After last year, we might be happy with that.
Source: NC State Economist. 2025 – Issue 1
