Global Economy

The New Ag Economy: Why This Downturn is a Structural Shift, Not Just a Cycle

Mon, 13 Apr 2026 21:22:16 GMT

What You Need to Know:

Structural Evolution: This downturn is a permanent market shift, not just a temporary cycle.
Friend-Shoring: Trade is moving toward geopolitical allies to ensure supply chain resilience.
Aggressive Cost-Cutting: Farmers are doubling generic input use and delaying machinery purchases to protect margins.
Financial Resilience: Better management and working capital make today far more stable than the 1980s.
Premium Protein Demand: GLP-1 medications are driving consumers toward smaller, higher-quality meat portions

As the industry enters the third year of this downturn, farmers and agribusinesses are questioning if a recovery is on the two-year horizon. While cyclical behavior is normal, two economists suggest the structural evolution within crop protection, machinery, technology, livestock and other individual sectors is creating a different kind of staying power for those who survive the recovery.

The Evolution of the Cycle

When characterizing the current economic cycle in agriculture, historical patterns provide a necessary baseline, yet the present landscape is defined by unique pressures. Typical agricultural cycles consist of roughly six years of expansion followed by four years of decline. Currently, the market is navigating a “corrective period,” returning to long-run averages.

The drivers of growth are typically demand shocks — export surges, fuel demand or policy shifts such as the Renewable Fuel Standard. However, Wes Davis, ag economist at Meridian Ag Advisors, notes the current environment is an intersection of traditional contraction and sector-specific evolution.

“What I think we’re experiencing right now is that typical cycle behavior where we see growth in some business firms, and then some contraction and pullback to adjust to the cycle going back to more of the long-run average,” Davis explains. “I think we’re also seeing evolution of individual sectors within the market where there’s adjustments happening because of the industry itself.”

In other words, this isn’t just a cycle — it’s also a structural shift.

Change Fatigue and Modern Volatility

Farmers aren’t strangers to volatility, but global trade disruptions, policy shifts and rising competition, especially from Brazil, are layering uncertainty onto already volatile markets.
Farmers are grappling with “change fatigue,” a byproduct of the high velocity of information and extreme price swings that dwarf the relative stability of the early 2000s.

“When I go talk to any industry group right now, the phrase that I hear is ‘change fatigue’, and I feel that. Every couple minutes, something shifts,” says Trey Malone, Purdue University ag econ professor. “But to be clear, it’s not that the farm economy isn’t used to volatility, it’s just the uncertainty and the volatility now is, like, ‘hold my beer relative’ to the old volatility.”

Malone attributes this to layers of uncertainty created by global trade and policy. The rise of Brazilian production, coinciding with the disruption of U.S.-China trade relations, has created a permanent state of flux. This sentiment is reflected in the Purdue Ag Economy Barometer, which shares a higher correlation with the Small Business Index (.5) than with actual commodity prices. This suggests farmers view themselves primarily as small business owners facing broad economic pressures rather than just price-takers.

“We don’t see very strong correlations even with lagged soybean prices and corn prices,” Malone notes. “The world is more complicated than just looking at what happened in the market yesterday and gauging how farmers feel.”

Global Competitiveness and the Trade Reallocation

A primary concern for U.S. producers is their position as low-cost providers. While the U.S. maintains an infrastructure advantage that lowers the cost of getting products to export ports, Brazil continues to close the gap.

“It’s a fair question farmers ask a lot: Are we actually the ones who are the low-cost producers, and do we still have a place in the global market if Brazil continues to lower the cost of production and transport their grain to export terminals?” Davis asks.

However, Davis points out that global trade hasn’t shut off; it has reallocated. Only three global regions — North America, Latin America and parts of Southeastern Europe/Central Asia — are net exporters. The rest of the world remains net importers.

“While our trade has kind of shifted around ... that shift has really reallocated stuff in different places. Those calories and products end up going somewhere. It’s just a question of where,” he says.

The Shift to “Friend-Shoring” and Resilient Supply Chains

The industry is moving from “just-in-time” (hyper-lean) procurement to “just-in-case” (inventory-heavy) strategies, a lesson reinforced by the pandemic. This shift is accompanied by “friend-shoring,” where the U.S. prioritizes trade with geopolitical allies.

“We’ve gone from offshoring to onshoring to nearshoring to friendshoring,” Malone explains. “We’ve got a paper that’ll be coming out ... where we document friend-shoring in ag and food supply chains. Over the last 10 years, there’s been a shift where we mostly in the U.S. trade with other people who vote like us in the WTO. That’s kind of one way to measure friends.”

This resilience is also visible in crop protection. In 2019, 80% of active ingredients were sourced from China. Today, that is closer to 60%, with manufacturing shifting to India and domestic sites. Davis calls these “geopolitically resilient” supply chains.

The Rise of Generics and Decision Paralysis

The economic downturn is fundamentally changing the business model for input providers. Farmers are aggressively cutting costs, leading to a massive surge in generic usage.

“The latest survey I saw shows about 60% of farmers use generics today. That was about 30% to 40% just 5 years ago,” Davis says. This forces companies to pivot from differentiation to operational volume.

In the machinery sector, high costs and economic uncertainty have led to “decision paralysis.” Farmers are extending the life of their equipment, treating machinery replacement as the most controllable variable in managing annual ROI. Davis notes the U.S. ag equipment cycle is currently 15 to 20 percentage points lower than typical low points, driven by this hesitation. Furthermore, there is significant skepticism toward subscription-based technology models.

“Farmers don’t terribly love this idea, and I think the other interesting thought here is I’m not sure that retailers like selling them either,” Malone adds.

AI: The “Undergraduate Intern”

While artificial intelligence (AI) is a major talking point, its current role in agriculture is more supportive than transformative. Malone views AI as a “highly capable undergraduate intern” — useful for processing information but incapable of replacing the trust and risk management provided by human advisors.

“I don’t think you need to be replacing your agronomist. I think your mediocre agronomist just got OK,” Malone says, noting while LLMs can pass CCA exams, they cannot manage the risk of a wrong decision. “The risk management value proposition of an in-person Claude, or whoever, is probably going to win out because there’s still a risk.”

Currently, the adoption gap is wide: While 75% of agribusiness managers see potential in AI, only 4% have implemented it, according to a Purdue University survey in 2025.

Livestock and the GLP-1 Impact

The livestock sector is facing a unique demand shift driven by weight-loss medications (GLP-1s). This is leading to “premiumization.” As consumers eat smaller portions, they are opting for higher-quality cuts.

“The explosion in demand for protein is just shocking,” Malone says. “What GLP-1s do to that calorie count is they are all shifting toward premium cuts. You don’t care how much it costs because you’re only going to have seven bites of it. But you’re going to have a steak. That premiumization is going to really, really take off in the next 10 years.”

Conversely, the hype surrounding “fake meat” has largely faded, proving to be more of an investor-led phenomenon than a market-driven one.

Financial Stability: Not the 1980s

Despite the downturn, the financial health of the American farmer remains more stable than during the crisis of the 1980s. Currently, 10% to 12% of farmers are in a “tight” financial position , compared to 20% to 30% in the 80s.

“We do have a completely different, more professional ag workforce than we did back then,” Malone says. “The farm policy we have right now does not necessarily match what we need for the future, but all of these things make me think we’re in a much more stable position.”

Farmers have built-in “shock absorbers,” Davis adds, including off-farm income and working capital built up during the expansion years. However, in his research Davis has seen how alternative financing is becoming a major tool for the 50% of farmers who use it — either to manage stress or, for larger operations, to leverage relationships with retailers.

Strategic Reassessment: Winning at the Bottom

The experts agree the “bottom of the cycle” is the time for professionalization and upskilling. Surviving — and thriving — will require sharper management. It is an opportunity to reassess farm transitions and management disciplines, such as financial management, accounting and planning, which become critical in tight margins.

“Farmers are going to have to get smarter and get more creative with how they manage,” Malone says. “This is a good opportunity to take a step back and think about what the strategy needs to be moving forward.”

Davis emphasizes relationships are solidified during these periods: “Farmers are going to remember the folks who were around when they were in the bottom of the cycle, and who were there to support them. The best farmers will continue to get better ... I get excited about what we can look like as we come out of this cycle.”

So Is This Ag Cycle Different?

These experts say yes as every cycle presents its own unique reshaping of future opportunities.

To download the full report on why this ag cycle is different and what it means for your operation, click here .

A 'Neighbor' in Need: Why Cuba’s Energy Collapse Could Spark a U.S. Ag Export Surge

Mon, 30 Mar 2026 19:39:18 GMT

Cuba looks the worst Paul Johnson has seen it in the 20 years he’s spent traveling to the country. The Chair of the United States Agriculture Coalition for Cuba landed back in Miami, after a week in Havana. He experienced blackouts in the city, sometimes 24 hours at a time.

Humanitarian aid arrived on shore in Havanna on March 24. The country has begun restoring power after its third nationwide power outage in the last month. Johnson says Cuban’s are without refrigerators and few cars are running.

“That has a tremendous impact on people’s psyche, but also the daily life and how things get done not only in the cities, but in rural Cuba as well where the conditions are even worse,” Johnson says. “A lack of fuel impacts everything-- the entire system is dependent on electricity, the entire grid.”

$40-a-Gallon Gas and a Grid in Collapse

Johnson says gas costs about $40 a gallon on the black market in Cuba. “In the fields where production is happening, or not happening, tractors aren’t running,” he says. “We’re seeing a real challenge of getting food from the fields to markets.”

USDA reports, the U.S. exported $476.74 million in agricultural goods to Cuba in 2025. Poultry was the top commodity, accounting for about 62% of the sales. Johnson expects overall exports to drop this year, because the energy crisis is making it difficult to transport food. However, he believes there are many opportunities to expand U.S. exports in the future because food production is low.

(U.S. Department of Agriculture Foreign Agricultural Service)

““Because we are so close, because we’re building this relationship with the private sector, and because production in Cuba is so low that creates a need for U.S. exports,” he says.

In 2021, Cuba opened over 2,000 industries up to the private sector. The shift has opened the doors for U.S. agricultural exports. Johnson says today about 70% of agricultural sales are going to the private sector. “Why? Because they have money and the Cuban government does not,” Johnson says. “We’re also finding that this private sector reacts quicker as you can imagine. They’re much more dynamic and they’re filling in the gaps as they go along.”

Rice: A Massive Deficit for U.S. Growers to Fill

In 2024, a report by U.S. Department of Agriculture’s Economic Research Service says between marketing years 2016/17 and 2023/24 rice production in Cuba fell from 335,000 metric tons to 140,000 metric tons. USDA reported in 2025, Cuba imported about $16 million dollars of rice from the U.S.

“Cubans depend on rice in every meal. But production in Cuba is down to about 10%,” Johson says. “They consume around 700,000 tons of rice a year and they’re only producing about 75,000 times today. That is one example of the opportunities for our U.S. Rice producers to export more rice to Cubans.”

Looking Toward a Two-Way Future

Johnson says he believes two-way trade between the U.S. and the Caribbean country is incredibly important. “In my experience with American farmers, when they go down to Cuba, they’re really most interested in helping out their neighbors. They see Cuban farmers as their neighbors, and they want to help them,” he says.

He also believes collaboration between U.S Department of Agriculture’s Animal and Plant Inspection Service and Cuba needs to improve in order to keep disease contained and increase Cuba’s food production.

“I think everyone I spoke to from the street to the government, the top of the government. Everyone says the same thing, ‘something’s got to change,” he says. “Everyone recognizes the need for change. What that change looks like? Is what we’re all trying to guess at.”

The "What If" Scenario: How Geopolitical Anxiety Could Shift the U.S. Corn Market

Thu, 12 Feb 2026 19:32:02 GMT

USDA’s Jan. 12 Annual Crop Summary and World Ag Supply & Demand Estimates featured a corn crop estimate that was so large it left me wondering if the country’s grain-handling system could handle it. Total corn use for 2025-26 is estimated at 16.4 billion bushels, and in the short time since the report, there is evidence the system can handle it. A record corn supply should put pressure on the national average corn basis, but basis so far this year is (on average) above the three-year average. The cash market is doing what it should to attract supplies to move to end users.

Corn exports are already estimated at a record for the current marketing year, and most do not expect the estimate to change much from January’s 3.2 billion bushels. Corn sales and export inspections through the end of January were on pace to get to USDA’s estimate but not strong enough to suggest exports of more than 3.2 billion.

The “What If” Scenario

But what if demand in importing countries suddenly expands? Not a sudden increase in feed consumption or biofuels production, but a surge of geopolitical uncertainty where countries that rely on imports suddenly feel the anxiety of food insecurity.

The Jan. 31 issue of Pro Farmer included an item the editors first saw in The Financial Times. It reported on “a trend among governments around the world, which decades after dismantling food reserves and putting their faith in global trade, are now rebuilding emergency stockpiles.” The report noted countries from Sweden and Norway to India and Indonesia are building emergency reserves, spooked by fears of a world they see as growing increasingly unstable.

It’s the same uncertainty that weighed on the value of the U.S. dollar and pushed precious metal prices higher than ever. I know, it’s not that simple. But with central banks accumulating gold reserves to build financial security, it’s not unthinkable countries will build grain and energy reserves. That would be a sudden increase in demand that changes the outlook for all grains.

That is, of course, if the system can handle it. Demand beyond 16.4 billion bushels would stress the system, but there is no reason to think the U.S. lacks the infrastructure to make it happen. And if the system can’t handle the demand, or if demand falters, the cash market will make it known through a declining basis market.

For now, flat price is low enough to encourage more demand, and the cash market tells us demand is good enough for better-than-average basis. Use marketing strategies that capture the above-average basis but give demand a chance to prove low prices cure low prices.

U.S. Soybeans at a Crossroads: Navigating China Trade and Brazil’s Rise

Wed, 11 Feb 2026 23:56:18 GMT

Deglobalization is nothing new in agriculture — the U.S. has been losing export share for decades. As rapid expansion and modernization continue around the world, the ag industry is navigating new pressures and opportunities to remain competitive. Experts who work directly in global trade say American farmers need to recognize what’s changing and what it could mean for their operations.

China Trade Framework Details

U.S. farmers were excited when President Donald Trump and Chinese President Xi struck a trade truce and framework in South Korea on Oct. 30, especially the 12 MMT of soybean purchases . However, the lack of clarity on if the commitments were for the calendar year or the marketing year left the market in disarray.

At the 2026 Top Producer Summit, Jiang Lyu, minister for economic and commercial affairs at the Chinese Embassy in the U.S., confirmed the 12 MMT is for the current marketing year.

“You do hear those numbers from President Trump, Secretary Bessent and others,” Lyu says. “All I can share with you is that China is pretty sincere in terms of having a relationship that is anchored on mutual respect, reciprocity and, most importantly, mutual benefit. We believe stability in this trade relationship, including in the ag trade, is very important, and we hope this mutually beneficial relationship will continue.”

To date, U.S. Trade Representative Jamieson Greer says China has purchased 12 MMT, but the purchases have only been made by Sinograin and Cofco, which are government entities. The 13% reciprocal tariffs China still has on U.S. soybeans makes it unfeasible for private crushers to buy and is 10% higher than the tariffs on Brazilian soybeans. The question remains, when will China eliminate that tariff?

Lyu says he’s not sure on the timing, but that China would like to advance discussions between the two countries to the point that tariff could be eliminated. There is hope that can happen when the two leaders meet in April.

“This is, to borrow your word, a trade truce,” said Lyu. “So the truce has a time of one year. We would like this one year to be extended and preferably into eternity.”

Opportunities to Expand China Trade

The Chinese market is ripe for expanding trade, according to Lyu, through new areas of U.S. and China agricultural cooperation. He cites platforms, such as the China International Import Expo, will bring new opportunities for U.S. agriculture.

The China-U.S. economic and trade relations benefit both sides when they cooperate, adds the minister, but harm both when they are confrontational. However, he says the Chinese market has broad prospects and large capacity, and bilateral trade meets mutual needs.

China to Buy 8 MMT More Soybeans?

Meanwhile, President Trump posted via social media on Feb. 3 that China had agreed to buy another 8 MMT of old-crop soybeans from the U.S. Why would China purchase from the U.S. when Brazil’s soybeans are over $1 cheaper than U.S. soybeans?

While this doesn’t make economic sense, Susan Stroud with No Bull Ag says these political goodwill purchases are being made by government entities to put in their reserve. Lyu says the relationship needs to be stabilized before moving forward.

“China and the U.S. need to reposition their relationship overall so that we have a bigger-picture arrangement in which China is no longer considered as a rival competitor to an extent, not a rival or enemy of the United States,” Lyu says. “There are so many things happening here that also hamper China’s interest, such as Chinese exports into this country or the Chinese investment into this country, so we would like this relationship to be totally benign.”

Under the latest trade framework, China is also expected to buy 25 MMT of U.S. soybeans for the following three years.

“If you consider the potential for 25 million metric ton per year in three subsequent years that’s still well below the five-year average,” Stroud says. “China has yet to confirm any of these amounts that have been touted by Washington.”

There’s still the lingering question about what happens after that? The U.S. is already a secondary supplier of soybeans to China behind Brazil.

Brazil Primary Supplier of Soybeans to China

Brazil is producing over 6.5 billion bushels of soybeans annually, and Stroud says their rapid conversion of pastureland into soybean production has reshaped global flows.

“A 5% average increase in soy area annually has taken them from an emerging market to a global powerhouse in the blink of an eye,” she explains.

Brazil first outexported the U.S. in 2012. Today, exports more than double the U.S. program. Since the last trade war, Stroud says Brazil has added 30 million acres of soybeans, which is a harvested area larger than the top four U.S. soybean states combined in 2025.

“In the past 25 years, Brazil has accounted for half of all of soybean global area expansion,” Stroud says. “When you have a tremendous growth in production, naturally, you’re getting rid of it via export.”

Stroud says Brazil is actively making infrastructure improvements from farm to port to not only accommodate its expanding production but also improve efficiency. China actively has a hand in this as Brazil is their number one supplier of soybeans. On average, 50% of Brazil’s total soy demand is exported to China compared with one in four bushels of U.S. soybean demand.

Brazil Has Room to Expand Soybean Acres

Brazil has the potential to expand acreage by converting an available 70 million acres of degraded pasture to cropland. Aaron Edwards with Santos Springs LLC says Brazil’s growth is far from over.

“For every acre of row-crop land, there’s two acres of degraded pasture,” Edwards says. “Without any deforestation, a significant amount of that land could become row crops.”

Agronomically, he says, with a few tons of lime, phosphorus and minimum tillage, in two or three crops these fields could be producing on par with Midwestern “I” states.

“Every acre you bring into soybean production, about one-third also become double-crop corn or double-cropped cotton acres,” Edwards adds. “Brazil expansion is a bear.”

Then there’s the potential of improvements via irrigation. He’s hearing estimates of 10 million acres going under pivot within the next decade.

“It’s a tropical climate, so one acre of irrigation is three crops a year, depending on the mix, or seven crops in two years,” Edwards explains. “That right there is 30 million acres equivalent of production.”

Currently, they have less than 15% on-farm storage and that leaves potential for better margin management on the table.

“Basis swings on soybeans are $2 to $3,” Edwards says. “Margins can increase just by putting in on-farm storage and managing basis.”

It takes a massive amount of capital investment to drive acreage and yield growth, he adds, but it creates long-term supply pressure in global oilseeds.

The Brazil “Paradox:” Expansion Amid Bankruptcies

The paradox, Edwards says, is how does Brazil rapidly expand amid bankruptcies, but he thinks the two can coexist.

“The primary economic incentive isn’t operating margins — it’s land appreciation from converting pasture to cropland,” he says.

He thinks cash flows and aggressive expansion increase supply and lower prices, making periodic financial stress inevitable.

“The land appreciation of developing these lands is what’s causing the expansion, causing the bankruptcies and putting soybeans on the market at such a cheap price,” Edwards explains. “However, the microeconomic incentives of expansion are there as long as there’s land appreciation.”

Rethinking Global Competition in Soybeans

The U.S. still has structural advantages such as infrastructure and logistics, plus capital, strong risk management and supportive policy, according to Edwards.

“The U.S. is still the best place to do business, and at the end of the day, you run a business,” he adds. “We have better logistics, better capital markets, better infrastructure, better risk management tools and more supportive policy. Those are the things that allow you to run a successful business.”

With that said, Edwards says farmers might have to rethink global competition. This includes who produces the most soybeans, and who delivers the cheapest export supply? Where can farmers sustainably build profitable enterprises? He says leadership in volume doesn’t always equal leadership in farm profitability.

U.S. Needs to Pivot to Domestic Demand

The U.S. is already expanding crush a projected 30% in the next few years to process bean oil to meet the growing demand for low-carbon fuels. Stroud says that might be one of the best options for the U.S. to find more domestic demand and decrease its dependence on China and exports.

“Right now, we’re about 50% of the way there in the buildout,” Stroud says. “This marketing year, we are adding 115 million bushels of annual crush capacity. Compare that with typical exports to China in the 1-billion-bushel range and there’s really no comparison. But, we are moving the needle.”

She cautions this growth is policy dependent, but the U.S. is also exporting more soybean meal than ever before.

Argentina Viewpoint

Lee Trimmer with Green Shoots LLC has spent the last 25 years working in Argentina.

“We have great soils, we’re close to the ports and we can create crops at a better price than other places,” he says. “Honestly, it comes down to who can do it cheaper.”

However, there is a paradigm shift happening with Brazil becoming the largest exporter. As farmers, he says, they have had to reinvent their business model.

Trimmer says Argentina is also one of the most complex and unforgiving places to be a farmer. His plan was to buy machinery, build a storage facility, stay away from livestock, and try to start buying land. However, the business he built in Argentina was the exact opposite.

He says the key to staying competitive has been to find great mentors. He is also involved in a peer group in Argentina known as CREA in which farmers open up their farms to bring valuable experiences to other farmers. They talk about what works or doesn’t work on their farms and provide other advice.

“I think a lot of it has to come down to farmer savvy, education, getting to know your peers, finding niches and getting ideas from other producers,” Trimmer says.

He told farmers at Top Producer Summit they can’t do anything about trade wars with China or Brazil increasing exports every year. But they can look to their own farms and make changes that open up new opportunities.

“I encourage farmers to put time and money into educating themselves, not just on producing more bushels. Dig down deeper to make your farm and legacy resilient for the future,” he says.

44 Million Acres: The New Frontier of Farm Consolidation and Growth

Tue, 10 Feb 2026 17:46:41 GMT

At the 2026 Top Producer Summit , Farm Journal Intelligence unveiled new farmland insights derived from predictive modeling and deep-data analysis. The research focused on the shifting landscape of land acquisition, identifying which operations are at risk of consolidation, who is positioned for growth and where the most significant opportunities lie.

Here are the six primary findings for farm businesses:

1. Scale Does Not Immune Operations from Consolidation.

(Farm Journal)

While smaller operations face the highest risk — with 58% of small farms “at risk” for sale or acquisition before 2030 — size is not a complete safeguard. Research shows the risk of consolidation or ownership transfer never drops below 27%, even for the largest operations. Furthermore, crop diversity made minimal impact on these odds; the likelihood of transition remains constant whether a farm produces one crop or more than 11.

2. Geography Trumps Diversification.

(Farm Journal)

Regional location is increasingly becoming a primary driver of financial success, often outweighing the benefits of operational diversification. As regional market divides grow, farmers and ranchers are finding that local market conditions and individual circumstances dictate their trajectory more. State-level or even county-level effects are more indicative of their situation than national trends.

3. The 44-Million-Acre Transition.

(Farm Journal)

Nearly 15% of American cropland is projected to change hands within the next three years, driven by generational transfers, continued consolidation and economic pressures. Farm Journal data identifies the Midwest as the epicenter of this shift, with roughly 12 million acres likely to transition. Nationwide, that total reaches a staggering 44 million acres.

4. Mapping the “Sweet Spot” for Expansion.

(Farm Journal)

By plotting cost per cropland acre against the volume of land likely to transition, clear opportunities for expansion emerge. For producers looking to grow their footprint, the most viable opportunities are currently concentrated in Kansas, Texas, North Dakota, Missouri, and Oklahoma, according to this research.

5. Integrity Is the Top Currency in Rental Markets.

(Farm Journal)

When more than 400 landowners were surveyed about tenant selection, integrity ranked as the most critical factor. Interestingly, age was reported as the least important factor. For producers looking to secure rented ground, a reputation for character and experience outweighs both seniority and youth.

6. The “Willingness” Factor in Technology.

(Farm Journal)

Producers most inclined to expand share a common trait: a higher comfort level and rate of adoption with technology. Crucially, this is not necessarily tied to technical skill or existing expertise, but rather to mindset and action. The most growth-oriented producers are defined by their willingness to try new technologies rather than their current mastery of them.

Download the Full Report

Atlanta Fed Chair Bostic Recognizes Sectors of Agriculture Are in Crisis

Tue, 10 Feb 2026 00:19:55 GMT

Is an economic crisis brewing in farm country? That’s the question Raphael Bostic, outgoing president and CEO of the Federal Reserve Bank of Atlanta, is watching as balance sheets carry over operating expenses into the 2026 season.

“There’s a lot of distress in agricultural marketplaces and in a lot of our agricultural enterprises,” Bostic says. “I do think there’s a significant crisis here.”

During a fireside chat at the 2026 Top Producer Summit , he recognized the challenges facing farmers in today’s financial environment.

“I get to talk to a lot of smaller family farms and I worry about them, especially because the big operations, they are so large scale, it gives you a diversity of possible strategies,” Bostic explains. “You can tap into different types of credit that can allow you to weather volatility a bit more readily, and we don’t see that for a lot of the smaller folks.”

To help, USDA is set to release $12 billion in “ Farmers Bridge Assistance ” payments toward the end of the month.

“This is a short-run patch on something that could be a long-run problem,” Bostic says.

Rising Expenses and the Growing Debt Burden

USDA is expecting net farm income to be $153.4 billion, which is down $4.1 billion from 2025. Economists say this year’s latest outlook continues to reflect declining receipts and an ongoing reliance on help from the government, which is expected to increase by 45% in 2026 alone.

“Total production expenses are forecast to increase almost $5 billion or 1%,” says USDA economist Carrie Litkowski. “On the farm sector balance sheet, assets, debt and equity are all forecast to increase.”

The latest Purdue University - CME Group Ag Economy Barometer in January found 21% of farmers surveyed expect their operating loan to increase over a year ago. Of those, a third say it’s because they’re carrying over unpaid operating debt from the prior year. In 2023 that number was only 5%.

“We know that input prices for a host of products are up,” Bostic says. “We know that competition at a global level is up. We know that the tariffs have put tremendous pressure on the competitiveness of American products overseas because of those dynamics, and we also know many commodity prices haven’t changed to offset these things. These are all incredibly challenging dynamics to wrestle with, and how we move forward is really an open question.”

Fed Policy: Why Patience is Required for Rate Cuts

The Fed’s primary mandate of stable prices and maximum employment provides an environment with predictable growth, giving people the opportunity to invest for the long haul without having to worry about where the economy will be in five to 10 years.

“First we have to diagnose the problem,” Bostic says. “Is this an issue with labor availability, an issue in new technology or shifting climate patterns, etc., and then we need to think about what strategies will work for all of these new things.”

That mandate requires patience in seeing how current monetary policy impacts the market. Bostic notes inflation remains above the Federal Reserve’s target of 2%, but economic growth has been and will continue to be robust. One thing he’s not advocating for is a continuation of interest rate cuts.

“The government shutdown actually prevented a lot of data from being produced, so it is actually going to make the numbers a bit choppier in the next several months,” Bostic explains. “The usual signals we would get from those [reports] are actually going to be weaker than they would be otherwise. For me, that’s another reason why I think we want to be cautious. We want to be patient, and I think that’ll be prudent.”

Patience ahead of additional rate cuts would allow the Federal Reserve to see how tax cuts and deregulation stimulate growth into 2026 before cutting rates, which could spur inflation even further above the Fed’s target.

At the 2026 Top Producer Summit, Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta, joins Bill Watts, Pro Farmer editor, to share insights into the economic forces shaping monetary policy and what that could mean for agriculture.

(Farm Journal )

The ag economy is seeing similar challenges to the economy as a whole. Bostic remarks while the top end of the economy is doing remarkably well, there is a growing number of U.S. consumers who are living paycheck to paycheck, evidenced by the increased rhetoric around a K-shaped economy. That has made itself evident in the ag economy by higher consolidation, with big farms getting bigger and smaller farms going out of business.

“This economy has continued to perform well at an aggregate level; consumers have continued to be resilient, and that’s a good thing,” Bostic says. “My outlook is that the resilience we’ve seen for much of 2025 will continue into 2026 and might even get a bit stronger, so we might actually see some of the tax benefits, some of the deregulation, those things could actually spur the economy to do even more than what it did last year.”

Consolidation and the Transformative Potential of AI

The latest red flag, a sluggish labor market has Bostic waiting on data and wondering if technology or AI are having an outsized role in the current new-hire economy.

“When you think about AI, for example, and those technologies, businesses are experimenting with ways to have AI introduced into their production processes to allow productivity that doesn’t require people,” Bostic admits. “You may have heard reports about a lot of entry-level hiring has happened at a much lower pace than it has in previous years. A lot of that is because the promise of AI has folks thinking, well, maybe I don’t need to do those hires, and I can get that same amount of productivity. That’s a structural change.”

From a farming perspective, those opportunities are also presenting themselves. Given the current challenges in agriculture, Bostic says it might be time to look at new ways to build toward the future.

“To the extent that work can be done, that is, generative, without necessarily needing a person to be there all the time, that’s potentially transformative,” Bostic says. “I know the day is long, seasons are hard, and if you can use technology to take two hours out of it that gives you space to do other things. The opportunity there is what do you do with that extra space?”

Companies Team Up To Accelerate Ag Innovation With Artificial Intelligence

Tue, 20 Jan 2026 20:19:57 GMT

SAP SE and Syngenta have announced a multi-year strategic technology partnership designed to bring AI-driven innovation directly to the agricultural sector. For farmers, this means a more modern, data-driven approach to the products and services they rely on daily, from manufacturing and supply chain management to field-level support.

As farmers navigate the complexities of climate variability and global market uncertainty, the partnership aims to bolster the tools available to meet the challenge of feeding a projected 10 billion people by 2050, Syngenta reports. By integrating AI across Syngenta’s operations, the collaboration is positioned to unlock faster innovation and stronger operational resilience that scales to meet the needs of agricultural producers.

“AI is the catalyst for agricultural transformation and has quickly become a core competitive edge for Syngenta,” said Feroz Sheikh, chief information and digital officer, Syngenta Group, in a prepared statement. “Our partnership with SAP is transforming how we run the enterprise, modernizing core operations and unlocking new ways to work — a testament to our commitment to becoming an agriculture company with AI at its core.”

“Syngenta’s transformation sets a benchmark for digital innovation in agriculture,” said Philipp Herzig, chief technology officer at SAP SE, in a statement. “Together, we’re demonstrating how cloud and AI technologies can drive sustainable growth and efficiency in one of the world’s most critical industries. This partnership will help Syngenta future-proof its operations to feed the world responsibly.”

The transformation begins with SAP Cloud ERP Private solutions, modernizing Syngenta’s value chain to ensure the company remains agile and responsive to market shifts. For U.S. farmers, this translates to a more reliable partner capable of weathering volatility and delivering consistent results, Syngenta says.

Through the SAP Business Data Cloud, Syngenta is establishing a unified and secure data foundation essential for real-time decision-making. Combined with SAP Business AI and tools like the Joule Copilot , the company intends to drive operational efficiency and accelerate the development of new technologies. Importantly, this initiative focuses on delivering superior products and services while ensuring farmers maintain control and privacy over their proprietary information.

Farmers Face Budget Squeeze And Balance Sheet Challenges—Echoes Of A Decade Ago

Tue, 30 Dec 2025 21:12:38 GMT

If heading into 2026 feels a little like déjà vu, you’re picking up the same vibes Chris Barron, president and CEO of Iowa-based Ag View Solutions, is experiencing. He believes the next couple of years will echo the last big downturn farmers weathered a decade ago.

“It’s kind of scary that 2025, ’26 and ’27 look essentially like a repeat of 2015, ’16 and ’17,” Barron says. “If you remember that time frame and made it through, buckle down because I think we’re going there again.”

He says one of the clearest signals farmers are about to experience a repeat of a decade ago is based on the 2026 cost-of-production data from Ag View Solutions’ clients, who are based in 23 U.S. states and three Canadian provinces:

Soybeans: About $11.87 per bushel based on a 65-bu. average yield
Corn: About $4.69 per bushel (before basis) on a 223-bu. average, with many growers needing at least $4.85.

Some growers raising non-GMO seed beans or getting premium contracts can still make soybeans compete. But for many farms, soybeans are the weak link in the current economic cycle.

Right now, Ag View Solutions clients are expected to plant roughly 62% of their acres to corn and 38% to soybeans for 2026 — essentially the same as 2025. Barron says he doesn’t expect many acres to shift away from this mix to more soybeans “unless something really changes.”

Given current price relationships and crop insurance guarantees, Ag View Solutions data shows about a $50-per-acre advantage to corn over soybeans for the year ahead. Even if the dollars trend lower, he says corn often pencils out better because of gross revenue and risk management tools.

More Cost Pressures Heading Into 2026

It’s no secret production costs are increasing heading into the next season. Some of the key factors include:

Overhead costs (what Barron calls ‘”return to management”) for family and employee expenses, including phones, fuel and business-paid personal expenses, are up nearly 5%. After the past year or two of what Barron describes as hard belt-tightening, he says deferred spending is “snapping back” at higher levels.

Land rents are holding mostly steady, supported by higher property taxes and outside investor demand.

Interest expense is climbing as operating lines grow.

Fertilizer costs are a mixed bag. On corn, fertilizer costs are up about 7%, even though Barron believes most farms are staying with removal-rate applications. On soybeans, he says fertility costs will be lower, mainly because growers are putting less fertilizer on their bean acres and leaning harder on corn nutrients.

Machinery and equipment costs are also inching higher for the year ahead.

This Is Not A Repeat Of The 1980s

Despite the “red” many farmers will see on their spreadsheets in the year ahead, Barron says the current period is not a repeat of the 1980s farm crisis, for two key reasons:

Farmer equity is strong. Debt-to-asset ratios remain healthy for many U.S. growers, even if cash is tight.
Many farmer exits are voluntary. Today, many farmers are choosing to retire or scale back in order to protect equity.

Barron offers a recent example: “I got a call the other day on 7,000 acres, a 45-year-old farmer saying, ‘I’m not going to do this anymore. I’ve got a $5 million equity position, and I’m not going to go for a couple more years and chew away another million dollars. I’m just going to be done.’”

Strategies for the Current Climate

To survive — and potentially thrive — in this “repeat” cycle, Barron suggests focusing on these four areas in the year ahead:

Do the high-dollar work. Barron says the “$500-an-hour” work is crunching numbers in the farm office. “Know your true costs, stress-test budgets, analyze each profit center. A few hours spent with good numbers can be worth far more than another round in the tractor,” he says.
Protect yield. He advises against cutting seed, chemistry or other inputs that protect or enhance yield “just to save a few cents per bushel.”
Right-size your operation. Barron says some of the most successful turnarounds he’s seen with operations lately have come when farmers “right-sizes” — they’re doing less, but doing it better — instead of trying to be everything to everyone.
Use collaborative models. Barron says he is seeing more farmers share equipment and labor with their neighbors to spread fixed costs without extra capital.

Opportunity Will Still Knock

During a Top Producer podcast, Barron told Host Paul Neiffer that the tight times ahead will create new land-rent opportunities for some farmers who want to expand. What commonly happens when margins get tight is some farmers pull back, and that’s when expansion possibilities open up for others.

“We’ve had numerous clients call us about opportunities to rent land and not like in small amounts. When times are tight and when things aren’t good, that’s when these opportunities present themselves,” he says.

Barron’s message for those farmers in expansion mode: have your numbers, working capital and lender relationships in order now, so if the right block of ground comes available, you can move quickly and confidently on it.

If you’re interested in the ROI spreadsheet Barron’s team uses to analyze market trends, email cbarron@agviewsolutions.com .

Hear the complete discussion between Barron and Flory on Farm Journal TV . Also, you can listen to the Top Producer podcast discussion between Barron and Neiffer at the link below:

Caleb Ragland Named Pro Farmer's 2025 Person of the Year

Mon, 29 Dec 2025 21:32:20 GMT

Caleb Ragland , president of the American Soybean Association (ASA), was thrust into the national media spotlight in 2025, where his steady demeanor and devotion to fact-based arguments made him an effective advocate for all farmers as they fought their way through the trade fire storm. That’s why Pro Farmer selected Ragland as its 2025 Ag Person of the Year.

“If you could pick a word to describe the year, uncertainty would be it,” says the Kentucky-based farmer. Following the trade ructions of President Trump’s first term, Ragland told Pro Farmer he knew another trade disruption was possible. Like most farmers, though, he was caught off guard at the sheer scale of the trade war and the lack of a firm deal with China before harvest began.

With commodity prices suffering as harvest began, ASA knew action had to be taken. Their approach was to “respectfully, but firmly” communicate the plight of soybean farmers to the general public and lawmakers in Washington.

“We’re not presenting ourselves as victims, we simply want to make a living and let the markets work like everyone else,” Ragland says.

The lack of soybean demand made waves far beyond the reach of traditional agricultural news outlets, with nearly 45,000 pieces of online media mentioning “soybeans” since September of this year. Ragland shares he sees those efforts paying off in smaller ways. Just last week, while traveling, he had an interaction at an airport when two fellow travelers noticed his ASA hat and struck up a conversation about soybeans after hearing about them in the news.

During today's Senate Judiciary Committee hearing, ASA President Caleb Ragland (KY) urged Congress & the administration to take immediate action to reduce #farm production costs & prevent additional family farm closures. https://t.co/wPUdObCxyC #AgEcon #AgPolicy #Soybeans pic.twitter.com/hkBqgUghWs
— American Soybean Association (@ASA_Soybeans) October 28, 2025

Over the course of 2025, Ragland had direct contact with legislators, administration officials and other policymakers. He spoke at Congressional hearings to push for lower tariffs on farm inputs, policy changes to bolster demand for soy and direct assistance to farmers impacted by ongoing policy decisions. Progress has been made with some tariffs on fertilizer dropped in December, and a $12 billion bridge payment to support crop producers was announced earlier this month. Despite movement in the right direction, Ragland knows more work remains.

“We really don’t want to leave anything out there on the table, and the rules around biofuels and renewable fuel standards is one practical area we could still see improvement,” he says.

Ragland finishes up his term as president this month, and will move into the role of chairman for his final year on the board in 2026. He remains optimistic the trade deal with China will be honored going forward, but reserves some uneasiness due to the complex political situation between the two countries. His key takeaway from his time in the spotlight is the importance of farmers banding together to influence policy.

“If we’re not unified we have very little influence, but there’s a lot of strength in numbers when we come together to point to common goals,” Ragland says.

In addition to a Person of the Year, Pro Farmer also selects an Event of the Year and a Story of the Year . In 2025, there was a distinct theme. The trade war and its disruptions to both exports and inputs made it a shoo-in for Story of the Year. Trump’s announcement of sweeping tariffs on April 2 , and the volatility that shook global financial markets in its wake, made it a clear choice for Event of the Year.

—Bill Watts and Hillari Mason contributed to this article.

Don’t snooze on Japan

Fri, 19 Dec 2025 21:54:42 GMT

What do Japanese bond investors have to do with the prices of grain or livestock? Directly, not much, but when they make sudden shifts it can send ripple effects across all markets. So it’s worth paying attention to the Bank of Japan and the market’s reaction to its latest policy moves.

The Bank of Japan raised its key policy rate on Friday to its highest level in 30 years to 0.75% from 0.5%, citing sticky inflation. The hike comes after the U.S. Federal Reserve last week delivered the latest in a series of rate cuts. The yen actually weakened after the move, in part because BOJ Governor Kazuo Ueda was murky on the prospects for additional tightening. But the yen has rebounded more than 8% versus a broadly weaker U.S. dollar over the last six months in part to the contrasting monetary policy stances between the two countries.

And expectations for further tightening could mean more yen strength, which could threaten what’s known as the “carry trade,” in which traders borrow in cheap yen to buy higher-yielding assets, such as U.S. Treasuries and equities, elsewhere.

The bigger worry, however, is that the slow move away from ultralow interest rates raises the attractiveness of Japanese government bonds to domestic Japanese investors. The Treasury market has seen occasional bouts of volatility, including in the summer of 2023 , on such concerns. Japanese investors have vast holdings of U.S. fixed income, and anything that sends them running for the exits would serve to lift U.S. yields and strengthen the dollar, with implications for other markets. That isn’t a prediction or base-case scenario, but it’s smart to be aware of where lie the potential fault lines in the global financial system.
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Dollars And Dirt: Navigating The Financial Reality Of Conservation Farming

Fri, 19 Dec 2025 20:47:18 GMT

Farmers like Ted Hamer and April Hemmes aren’t opposed to conservation practices or regenerative agriculture—both Iowa row crop growers already use some. What they are opposed to is taking on unmanageable risk in an environment of tight margins, volatile markets and rising input costs without clear, reliable benefits.

During their recent, wide-ranging conversation on AgriTalk, a central theme emerged: if policymakers and companies seek broader adoption of conservation and regenerative practices, they must pair expectations with practical, well-designed incentives.

Here are some of the key points the two farmers made during their discussion with Host Davis Michaelson.

‘Regenerative’ is Just Good Farming
When new programs are announced with big dollar figures and bold language, they often imply that farmers need to be “fixed.” That doesn’t sit well with farmers, many of whom have been stewarding the same land for generations.

As Hemmes, based in Franklin County, Iowa, puts it, many practices highlighted under the umbrella of “regenerative agriculture” are simply standards for good farming.

“What you’re saying is regenerative ag, I just call farming. That’s just what we do. Taking care of our ground and having healthy soils is what we farmers do because it’s our legacy to our family,” says Hemmes, who uses no-till, cover crops and water management practices.

In her and Hamer’s perspective, farmers are not resistant to regenerative practices. Instead, they dislike being told they are “farming wrong” by groups and individuals outside of agriculture who may not fully grasp the on-the-ground economic and agronomic realities.

Tight Margins Make Experimenting A High-Stakes Decision
Hamer, based in Tama County, Iowa, explains that adopting new practices—such as cover crops, reduced tillage, or diversified rotations—often means incurring upfront costs, significant management changes, and a lot of uncertainty.

“It’s terribly risky with the margins we have right now… I’ve got to make a buck… I can’t have it be so risky that I don’t see a return on my investment,” Hamer says.

This is the crux of the matter: even when farmers are supportive and willing to adopt new practices and technologies, the math has to work, and some profit must be realized.

Their collective perspective is clear: without robust ROI data, strong cost-share or incentive payments, and integrated risk-management tools (like multi-year contracts or crop insurance integration), shifting current practices is often unjustifiable.

“The margins are too tight to stick your neck out very far at this time,” Hamer says.

Incentives Must Include Technical Support
National agricultural announcements often tout the dollar amounts available, such as the recently announced $700 million Regenerative Pilot Program . While funding is crucial, Hemmes points to an equally pressing need: technical support in the field to help implement the programs effectively.

“They need more dollars for people in the field…. I’ve been a soil and water commissioner for over 30 years, and we are in desperate need for technicians out here. So, throwing money at this is one thing, but getting the people in place to carry out the programs is another,” she says.

When USDA service centers, Extension offices, and others at the local level are understaffed and technical assistance is stretched thin, good programs can stall at the farm gate. Hemmes outlines the requirements for effective incentives:

Adequate Technical Assistance: To help farmers correctly design and implement complex practices.
Reasonable Timelines: Recognizing that some benefits, like improved soil structure and organic matter, take time to develop and build.
Simple, Predictable Processes: Application and compliance should be straightforward.

Without the necessary technical support and manpower, Hemmes notes that even the best programs often just turn into frustrating paperwork exercises.

Aid Payments Don’t Fix Structural Issues
Short-term “bridge” or aid payments can help keep farms afloat during difficult years, but Hemmes and Hamer say they don’t structurally support the long-term decisions that can improve grower practices and profitability.

The main issue, they contend, is that much of the money from these aid programs never truly stays on the farm.

“This payment (the $12 billion Farmer Bridge Assistance program) isn’t for us. It’s all going to input costs, fertilizer, equipment. None of that money stays in our hands,” Hamer says.

Hemmes agrees, noting that people outside of agriculture often “don’t see what the problem is” because farmers are seemingly getting “free” money.

“It’s not like we go to Amazon and order a bunch more crap off there because we got some money,” she says. “No. It goes to everything we have to do to put the next crop in the ground.”

Ultimately, she believes, major policy change requires facing difficult truths.

“We’d love free and fair trade, but we know that’s not a possibility,” she contends. “It’s going to hurt to make a change, and I think that’s what politicians don’t like. They want to get reelected, so [their attitude is] ‘let’s just keep doing it this way.’ That’s the tough part of it all, because anything that revolves around changing policy is messy.”

Hear the complete conversation between Hamer, Hemmes and Michaelson on AgriTalk:

‘Farmers Can’t Outyield the Balance Sheet Anymore’

Fri, 12 Dec 2025 22:39:11 GMT

Randy Dowdy, high-yield corn and soybean farmer and agronomic consultant, paints a stark picture of the economic pressure bearing down on American farmers.

Fresh from a visit with customers, Dowdy says the same three questions dominate almost every discussion he had with growers:

Where can we cut costs?
Where do we have to spend money to stay in business?
How do we service existing debt when margins are razor thin?

Even with strong yields this year, many of the farmers, he notes, “could not outyield the balance books.” Commodity prices have not kept pace with rising costs, he says, leaving farmers struggling to keep their operations in the black.

Costs Have Soared, Partly Due To Regulations
Dowdy contrasts his early years in farming with today’s reality. When he started farming in 2008, his first tractor cost between $150,000 and $175,000. Now, he says, a similar horsepower tractor “can run roughly three times that dollar amount.”

He traces a significant part of that escalation to emissions and environmental regulations that began ramping up in the late 2000s. He recalls an initial price jump, followed by annual increases of 6% to 8% since then, compounding the burden on farm finances. The complexity that comes with the machinery systems, he argues, also has stripped farmers of their ability to repair their own equipment.

“You can’t work on [equipment] without a computer. Even the technicians can’t work on them without a computer,” he mentioned on a recent AgriTalk segment.

Noting not all of the price jump is due to emissions controls, Dowdy believes the regulatory wave gave some manufacturers cover to raise prices.

Tension Between Policy and Reality
Dowdy’s comments on AgriTalk came following a White House roundtable on Monday tied to a new $12 billion “bridge payment” plan . President Donald Trump said his administration will move quickly to ease environmental requirements affecting tractors and other farm machinery , arguing the changes will lower sticker prices and simplify repairs.

On Wednesday more news followed with Ag Secretary Brooke Rollins and Health Secretary Robert “F” Kennedy Jr., announcing a $700 million initiative for regenerative agriculture .

Dowdy said he’s not opposed to supporting agricultural niches — all of the profitable corn and soybean growers he and Total Acre business partner David Hula met with recently have some kind of specialty angle.

“If there’s a little help for those guys, I don’t have a problem with it. But at the end of the day, the row crop farmers are where the help needs to be,” he notes.

Part of the help has to do with machinery costs. He highlighted cotton pickers as one example.

“The cotton industry’s got one manufacturer that I’m aware of that makes a cotton picker. One. And it’s $1.2 million,” he says. “Where’s the competition that helps make that thing affordable?”

Dowdy doesn’t claim to have all the answers, but he would like a “seat at the table” to have a candid conversation with policymakers and regulators focused on one core goal: bringing equipment and input costs back within reach so farmers can keep their operations viable.

“I’m all for the farmer,” Dowdy says. “If the farmer wins, everybody wins.”

Dowdy and Hula address farmer profitability needs in more detail in their new Breaking Barriers With R&D podcast, available here:

You can also catch the AgriTalk discussion between Dowdy and Host Davis Michaelson below:

Can China Live Up to Its 12 MMT Soybean Promise?

Mon, 01 Dec 2025 21:14:39 GMT

As year-end approaches, soybean markets are entering what is normally a quiet stretch, but this year, the calm might be deceptive. Arlan Suderman, chief commodities economist at StoneX, says two uncertainties could spark volatility: the EPA’s final biofuel regulations and China’s ability to follow through on its promise to purchase 12 million metric tons (MMT) of new U.S. soybean sales.

And as USDA weighs market loss payments due to tariffs and trade disruptions, which are reportedly coming this week , ag economists cast doubt on if China will buy 12 MMT yet this year, Suderman says the market might have have already priced in a lower amount.

Markets in a Holding Pattern But Not for Long

Suderman describes the current market tone as typical for late November and December, saying: “We’re in a holding pattern right now, and typically between Thanksgiving and Christmas, you get kind of sluggish markets as we’re waiting for new direction after the first of the year.”

But he immediately adds that this year could carve its own path.

“I think this year we have more potential for volatility, perhaps in both directions, because over the next few weeks, we anticipate getting direction from the EPA on the final regulations for the biofuel program,” he adds. “That could be very bullish, it could be bearish. Our bias is to the positive side, but until we know, that’s an unknown that the market’s really not pricing in yet at this point.”

The Million-Dollar Question: Can China Really Buy 12 MMT?

A major focus remains China’s pledge to buy 12 MMT of soybeans in 2025, but even the timing of those purchases is unclear.

“The White House says it’s new purchases for the calendar ’25. China hasn’t given their side of it. That’s why we need to see the agreement, and we hope to get that this week. That should detail it out in addition to details on the other commodities,” Suderman explains.

Beyond the calendar debate, he says there are real logistical limitations.

“What we hear from our cash sources on the ground in China is they don’t have enough storage space if their state grain buyers are going to buy all these because it’s not economical for the private crushers,” he says. “So the only way they could do it would be to wash out some purchases from Brazil. Now that would be bearish for Brazil, cause their basis to collapse, and then some customers who normally buy from us might go to Brazil instead, kind of rearranging the deck chairs, so to speak.”

Suderman says the core issue is straightforward and there are two looming questions that only China can answer.

“How it all plays out is a big question mark. But I think the big key is: Does China make the full 12 million metric tons of new purchases by the end of the year? And when do they take shipment? They can make the purchases and not take shipment till the next marketing year, or they could take shipment in the next few months. That’ll have a big impact on the dynamics of this market,” says Suderman.

Economists Cast Doubt

U.S. Secretary of Agriculture Brooke Rollins and the White House have said China will live up to its promise to buy 12 MMT of soybeans this year, but ag economists aren’t so sure.

Farm Journal’s November Ag Economists’ Monthly Monitor , an anonymous survey, found more than three-quarters (76%) of economists surveyed say China won’t purchase that amount of soybeans this year; 24% of economists think China will.

(Farm Journal)

Those same economists are also divided on whether additional trade aid is needed. Exactly half of economists say yes, trade aid is still necessary, while the other half say no.

But economists overwhelmingly agree on two key risks:

U.S. agriculture has become too reliant on ad hoc payments. A striking 94% say the industry has become “too addicted” to emergency programs. And it’s not just farmers, but also industry and input suppliers who have become reliant upon these payments. Many economists say repeated aid packages distort land values, cash rents, equipment purchases and overall decision-making.
One hundred percent of economists argue tariff-aid payments will keep fertilizer prices high. Every economist surveyed says tariff aid would keep input prices elevated, particularly fertilizer.

November Ag Economists’ Monthly Monitor

(Lori Hayes )

But this also leads to a bigger issue: Is there enough competition in the fertilizer market? Two-thirds (67%) of economists surveyed say there is not enough competition in fertilizer markets.

Fertilizer prices track crop prices, not energy costs — a sign of market power.
The market is concentrated and driven by a handful of global producers.

“The fertilizer market appears to be very concentrated, limiting competition,” said one economist in the anonymous survey. “In a competitive fertilizer market, fertilizer prices should track more closely with energy costs as the primary input cost in fertilizer production (supply) instead of tracking more closely with crop prices as the primary demand for fertilizer. Prices correlating more closely to production costs suggest a competitive supply-driven market. Prices correlating more closely with crop prices suggest a demand-driven market with some market power.”

“More competition is always better, but closing out competition with trade barriers right now is a bad idea,” one economist said.

“While we only have a few suppliers, there is not competition to offer lower prices. Fixing this is a whole other issue,” said another economist in the monthly survey.

“Economies of scale are so large that firms will be few in number. Breaking them up may lead to more competition but also higher prices as economies of scale are lost,” was another comment in the November survey.

What Traders Are Actually Pricing in

Right now, Suderman says the market is assuming something less than the full 12 MMT pledge.

“I think the market has priced in expectations that maybe they’ll take 8 to 10 million metric tons, and they’ll take it during the marketing year between now and the end of August,” he says.

He adds that traders expect the 25 MMT earmarked for 2026 could be purchased sooner but shipped later.

U.S. Soybeans Still Too Expensive for Private Buyers

Even if China lifts its 10% retaliatory tariff, as many expect, it still won’t make U.S. soybeans the cheaper option for commercial crushers.

“For the private crushers, what they would have to pay if there were no additional tariff—and there still is a 10% retaliatory tariff—we expect that to come off soon. But even if it comes off, our U.S. soybeans are priced 70 to 80 cents above Brazilian soybeans landed at the port in China,” he says. “And so we’re still not competitive from that standpoint. And with new crop harvest just weeks away in Brazil now, we’re probably not going to get competitive. So it’s going to have to be state purchases.”

Livestock Margins, Not Disease, Are the Real Drag on Feed Demand

While there are recurring late-year rumors of disease in China’s hog herd, Suderman doesn’t see unusual issues at the moment.

“Every year we hear this time of year about disease in China,” he says. “We don’t see anything at this point that’s out of the ordinary.”

Instead, he points to weak margins across all major protein sectors.

Instead, he says the real challenge is weak livestock economics.

“The bigger problem is the poor returns, the poor margins for livestock feeding—be it pork, be it poultry, be it all forms of protein right now. Demand for protein is simply not there,” Suderman explains. “So they’re shrinking the size of their herds, their flocks, etc. And that’s reducing demand for corn consumption. They actually expect to see corn consumption go down next year versus prior year. That’s a reversal of the normal trend for soymeal demand as well.”

He adds that China is still buying soybeans for a strategic reason and one that agriculture needs to prepare for now.

“Soybean demand is only being held up right now by China building its reserves so that when President Trump’s no longer in office, they can never buy another soybean from us again.”

If the U.S. Must Rely Less on China, What’s the Quickest Way to Do So?

Rollins recently warned that reducing reliance on China will be difficult. Suderman agrees but insists it’s necessary and will take not only striking new trade deals and finding new markets, but building domestic demand.
That includes:

A strong biofuel program
New trade agreements
Expanded global access
Domestic demand growth

“I’ve been saying that for four or five years, that we were going to lose China. Let’s go to all of the above,” he says.

He believes some recent trade pacts signed by Trump are “very good for demand,” though he cautions nothing can fully replace China’s market size.

Still, Suderman says there is reason for optimism as biofuel infrastructure.

“With the all-of-the-above approach, we do have a bright picture down the road,” he says.

What to Watch Through the End of the Year

China’s ability to follow through on its 12 MMT soybean promise remains highly uncertain. Storage constraints, price disadvantages, and weak domestic protein margins are all complicating factors.

Suderman says the market is prepared for 8 MMT to 10 MMT but not the full pledge.

What China does, or doesn’t do, over the next few weeks could shape the soybean market well into 2026.

“Some of these trade packs that President Trump has signed are very good for demand. It’s not going to replace China by any means. You can’t do that, it’s not the same size market. But I think with the all-of-the-above approach, we do have a bright picture down the road as we get the biofuel infrastructure built up,” says Suderman.

Economy Nears Recession as Labor Weakness and Policy Uncertainty Mount

Mon, 14 Jul 2025 20:36:24 GMT

The U.S. economy is teetering on the edge of a recession, with key indicators showing signs of stress even as headline numbers paint a rosier picture, according to Dr. Vince Malanga, president of LaSalle Economics. He warns that “the economy is inching closer to some sort of recession,” pointing to persistently sluggish growth and deteriorating labor conditions beneath the surface.

While official unemployment rates remain low, Dr. Malanga notes that these figures are “being held down by weak labor participation.” He explains, “In June, Household employment was flat relative to May, and it was 500,000 workers below January’s level.” Compounding the issue, June saw a decline in the average workweek, the slowest rise in private payrolls this year, and a drop in aggregate hours worked. “Aggregate hours worked declined in June and were flat over the past three months,” Malanga observes, highlighting the hidden frailty in the labor market.

Despite expectations that the initial round of Trump administration tariffs would fuel inflation, that impact has yet to materialize. “If GDP growth was 2.5% annually as forecast by the Atlanta Fed model, it was all in faster productivity,” Malanga points out, suggesting that productivity gains and deregulation are offsetting price pressures for now. Still, he cautions that “a second round of tariffs is now in play, adding uncertainty to business decisions and to Federal Reserve policy choices.”

Malanga remains cautiously optimistic on inflation: “Productivity growth, the benefits of deregulation, and weak demand will continue to hold down goods price increases. With housing costs moderating and energy prices more stable, inflation could still hit the Fed’s target once near-term calendar effects pass.”

Malanga also flags ongoing volatility in energy markets, driven by persistent Russia-Ukraine tensions and potential renewed sanctions against Iran. “OPEC is adding about 2 million barrels per day to the market in monthly increments,” Malanga notes. While OPEC has agreed to speed up production adjustments, actual output still lags targets, serving as a reminder that supply risks remain.

On the fiscal front, the passage of the “One Big, Beautiful Bill” is expected to be “mildly stimulating to the economy in the near term and more stimulative longer term as the benefits of full expensing of structures and equipment gain momentum.”

Yet, bond markets are uneasy about the bill’s deficit implications. Malanga recommends two steps to restore market confidence: “First, the administration must hone its message of the noninflationary growth aspects of the package… Second, the Federal Reserve needs to make up for lost time and cut interest rates to accommodate economic growth. If inflation and inflationary expectations remain contained as we expect, bond markets will become comfortable and long rates will fall.”

Malanga underscores the centrality of the housing sector to any economic recovery. “The key to restoring growth is housing, which has and continues in recession,” he asserts. He believes that “were the 10-year treasury note to fall below 4% and stay there, mortgage rates will decline, and housing could then reassume its role as a leading indicator, spurring overall growth and easing deficit concerns.”

Malanga concludes on a note of guarded hope: “The process becomes self-reinforcing once the gears are set in motion.”
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Can Farmers Weather The Trade Uncertainty Storm From China?

Tue, 15 Apr 2025 19:44:40 GMT

China is vitally important to the U.S. as an ag trading partner: 50% of the soybeans the U.S. sends abroad are destined for Chinese ports. You can’t snap your fingers and replace that demand, even if every single one of the 130+ currently-in-negotiation trade deals are resolved to favorable terms for the U.S.

“And I keep pointing out to people that it is soybeans, but also other crops as well,” says Joe Glauber, former USDA chief economist and a current emeritus fellow with the International Food Policy Research Institute. He says 80% of U.S. grown sorghum is also exported to China.

Related: China Increases Tariffs to 125%: What Ag Exports Will Be Most Impacted

The last time these two world power ag markets were besieged with trade uncertainty, during the first Trump administration, soybean exports to China dropped 75% from the previous year, Glauber says. He also thinks it’s too early to get a long-term read on how the market will react to the Trade Wars, because tariff policy seems to shift as often as an eastern Iowa headwind.

And unfortunately, if you’re looking for a silver lining in the renewable fuels arena, Glauber also thinks it’s too early to know how that market will be impacted. There have been increases to domestic biofuels processing capacity over the last five years, but its hard to get a read on how EPA will approach the market.

“I don’t have a sense yet of how this EPA will operate,” he adds. “There’s always been tensions in those agencies between oil on the one hand and renewables on the other. Obviously, those would be good alternative markets for our soybeans if you can’t export, and going into invested crush would be a nice alternative, but we’ll see.”

Cotton is another domestic crop that is in a world of hurt, Glauber says. Acres are “really seeing a decline” and that’s not a one off this year either, it’s become a long standing trend at this point.

With soybeans, cotton, and even corn prices in a bad spot, one would presume there will be a wave of farm foreclosures hitting rural America this year. Thankfully, though, direct payments have helped stave off that potential nightmare, for now. But nevertheless, the threat is real and it looms large.

“Remember, we are getting a ton of money put into the sector this year from the bill that was passed by Congress in December,” Glauber says. “So that’s $31 billion coming in with $10 billion of that going out to farmers as direct income support to offset low margins. So, I don’t think we’ll see a lot of farms going out of business. But certainly, if these short, tight margins persist for a long time, then that’s going to affect people.”

Glauber is optimistic though that it won’t take a seismic “Big Bang” level event to punch up some upside into crop prices. He thinks some drought, or even “a little dryness showing up in the part of the world” would make the markets react positively.

“That tells me that stocks are still…it’s not burdensome that they’re really depressing prices,” he says. “But that said, I mean, these are low prices and relative to where we’ve been, margins are still tight.”

One area of American ag that is thriving right now is the protein side, with hog, beef, and poultry markets all “a bit of a different situation (going on) there,” Glauber adds.

You can listen to the full AgriTalk episode here.

Your Next Read: Follow These 3 Rules To Manage Commodity Market Uncertainty

Grassley: Farmers Can Feed And Fuel The World At The Same Time. It’s Not Either/Or

Mon, 24 Mar 2025 21:12:38 GMT

A still-agitated Sen. Chuck Grassley spoke to AgriTalk Host Chip Flory on Monday, detailing a list of frustrations from the town hall meeting Grassley hosted last Friday night at the Franklin County Courthouse in Hampton, Iowa.

The event marked the kickoff for Grassley’s 45th annual tour to each of Iowa’s 99 counties, done so he could hear directly from Iowans.

He heard from them all right.

About 150 Iowans worried and upset about funding cuts and mass firings of federal employees, led by Elon Musk and the Department of Government Efficiency, showed up and volleyed questions at the senior senator from Iowa.

In the overflow crowd were also a number of corn and soybean growers and county-based Republican party leaders Grassley and team had personally invited.

“A lot of them showed up. I’d have assumed I’d got a friendly question… And do you know that for a whole hour, not a single farmer or a single Republican leader asked me a single question,” the senator told Flory.

Instead, Grassley said he had to listen to “an hour of people complaining about President Donald Trump, Musk and Congress,” claiming the latter is not doing enough to provide a check on the president’s authority.

“Why wouldn’t they take an opportunity to ask Grassley something about international trade, or about the five-year farm bill or stuff like that?” Grassley asked Flory.

“I’ll ask you right now,” Flory responded. “Let’s talk about E15 and year-around availability. There’s a big push for it right now. Is that going to happen?”

“I think so, but I don’t know exactly when, because you’ve got to be bipartisan,” noted Grassley, who has long-championed year-round E15.

E15 Decision Requires Bipartisan Support

In mid-February, Grassley and Deb Fischer (R-Neb.), both members of the Senate Agriculture Committee, had reintroduced the Nationwide Consumer and Fuel Retailer Choice Act of 2025. The legislation is currently the only permanent, nationwide solution they said that will unleash the power of E15. The legislation would enable the year-round, nationwide sale of ethanol blends higher than 10 percent, helping to lower fuel prices and provide certainty in fuel markets for farmers and consumers.

“We’re hoping all those things get done, but we need permanency and predictability with ethanol and biodiesel,” Grassley told Flory. “And we need certainty, and this administration ought to give us that certainty.”

On his first day in office of his second term, President Trump directed the Environmental Protection Agency to explore the benefits of making E15 available year-round through his Executive Order Declaring a National Energy Emergency.

“We got plenty of leadership here in the Midwest, and all the president would have to do is say, ‘Well, why doesn’t Congress get off of its butt and get something passed to help and bring certainty to this very important industry, because we have the capability of feeding the world, and we have the capability of fueling the world,” Grassley said.

Trump Tariffs Are Concerning

Grassley has been very consistent over the years in his messages to American farmers and the public at large that he is not a proponent of using tariffs to negotiate trade decisions.

Flory asked Grassley what his take is on what’s currently happening on the trade front, and whether he anticipates any long-term gains resulting from implementing tariffs.

“I’m a free and fair trader. I want to negotiate tariffs down,” Grassley replied. “If the president’s plan works, I’m going to say, ‘Praise the Lord.’ And if it doesn’t work, I’m going to say, ‘I told you so.’ But I’m not telling him that yet.”

Grassley said while he’s been in the Senate, he has spent 40 years trying to eliminate or reduce tariffs. “If he (Trump) can do it in a better way, I’m going to honor him for doing it.”

Another trade-related issue Grassley brought up is the decision by the Trump administration to impose fees of up to $1.5 million on Chinese-built vessels entering U.S. ports as part of the administration’s efforts to revive the U.S. shipbuilding industry.

“I don’t know that the president understands what he’s doing,” Grassley said. “The president is just creating a problem every time a ship docks in the United States, putting up to a million-dollar-plus cost on it. It is going to make it much more difficult for us from a competitive standpoint. I don’t know if they really think this stuff through or not.”

Augusto Bassanini, president of the United Grain Corporation, said as much in a March 21 letter to U.S. Trade Representative Jamieson Greer. Bassanini, quoted in an online article by the South China Morning Post, said the “unintended consequences” of the proposed actions “are already beginning to surface, with global shipping markets reacting by reducing bookings to U.S. ports, increasing shipping rates, and modifying contractual terms.”

Are More Tough Economic Times Ahead?

Flory asked Grassley if the various issues are signaling a prolonged period of tough economic times for agriculture. “Should we be anticipating some payments to farmers like, you know, the market facilitation program payments under the first Trump administration?” Flory asked.

“Well, already we got the $29 for soybeans and $42 for corn going out now to farmers. That was the $10 billion appropriation of the previous bill, but that deals with the Biden economics,” Grassley replied.

“The only thing I’ve got to tell you is when (Trump’s) tariffs screwed up our sale of soybeans to China, then he put $28 billion out through the CCC (USDA’s Commodity Credit Corporation), which I think is too liberal of a delegation of authority to the president of the United States. But anyway, farmers want their money from the marketplace, not from the federal treasury,” Grassley added.

Flory’s final question to Grassley was regarding the timeline on tax cuts and budget reconciliation in the Senate.

Grassley said, “I hope today the chairman of the committee tells me he’s put together a bill. If he does that today, that will give us an opportunity to get something moving. Because until now, we’ve had 10 weeks of nothing but talk, talk, talk, going over the same thing week after week, and we got to move.”

The full discussion between Sen. Grassley and Flory on AgriTalk is available here.

Your next read: USDA Announces Key FPAC Appointments to Advance ‘America First’ Farm Agenda

Ag Research and Export Markets At Risk Without USAID

Fri, 07 Mar 2025 22:04:51 GMT

When the Feed the Future Livestock Systems Innovation Lab at the University of Florida launched in 2015, it was the only one in the country focused on animals and livestock, conducting research projects primarily in sub-Saharan Africa and southeast Asia. The lab was supported largely by a $59 million award from the now mostly dismantled United States Agency for International Development (USAID).

On Jan. 24, the Trump administration ordered a 90-day freeze to foreign assistance programs along with termination of most USAID-funded grants and contracts , which immediately impacted active Livestock Systems Innovation Lab projects in Rwanda, Kenya, Tanzania, Ghana and Haiti.

“All those projects are now suspended,” says Geoffrey E. Dahl, Ph.D., director of the lab. “We can’t pay staff or maintain infrastructure.”

Among the shuttered Feed the Future projects was one investigating the impact of increased essential nutrients from animal source foods on fetal development and maternal health.

“We had 400 [pregnant] women enrolled, each receiving two eggs a day, with a lot of prenatal oversight,” Dahl says.

Designed to improve maternal and infant health outcomes, the project is one among hundreds of paused food and ag-based research initiatives at 75 universities in 40 states, according to data from a recently furloughed USAID contractor.

Dahl says Feed the Future’s Tanzania and Ghana-based research to develop a Newcastle disease-resistant chicken has also ground to a halt.

“We already completed a 10-year selection of chickens that had resistance to the disease, but now those lines of chickens are not being fed,” he says. “All told, we have 30 projects on complete pause right now.”

Future of Ag Research Lies in the Balance
With nearly half a billion in ag research funding at stake, according to data from former USAID contractor Jordan Schermerhorn, labs around the country are facing personnel layoffs, at best, and shutdown of hundreds of research projects, at worst.

Florida’s Livestock Systems Innovation Lab received most of its funding from USAID, according to Dahl. While the university also receives support from the Gates Foundation, the latter can’t make up the difference.

“Right now [we’re] backstopping the staff because we still have work to do up until the time of the stop work order [on April 15],” Dahl says, “but the university can’t maintain the staff forever.”

Peter Goldsmith, Ph.D, director of the Soybean Innovation Lab (SIL) based at the University of Illinois Urbana-Champaign, is facing similar challenges.

“Our mandate [as a lab] was to establish the foundation for the soybean market in sub-Saharan Africa,” he explains, looking at how to improve yield, seed, supply and mechanization.

SIL had a $30 million award from USAID funded through 2027.

“That money stopped on Jan. 27 at all 19 labs [nationwide]. Everyone on that contract is out of job now.”

Among impacted labs is one overseen by Kerry Clark, Ph.D., director of International Programs for the College Agriculture at the University of Missouri.

“Our research has focused on improving soybean production and use in Africa, but there have been benefits to U.S. farmers,” she explains, pointing out researchers at the university have been working to develop stronger soybean lines with better disease resistance by improving soybean genetics. “Disease could wipe out [U.S. soybean varieties] because there’s not a lot of genetic diversity.”

In her team’s field research on soybeans in Africa, rust already represents a major threat.

“It’s harder to do that research in the U.S. because we don’t want [the disease] here,” Clark explains. “Fungicides are expensive, so developing genetic resistance is important.”

Clark says SIL discovers new diseases in Africa that aren’t in the U.S. yet, such as red leaf blotch.

“This helps protect U.S. farmers as well as African farmers,” she explains. “USAID programs are required by law to have a benefit to U.S. farmers.”

Economic Impacts Extend Beyond Farmers
At present, worries about future pest outbreaks and opening of new markets have become secondary to U.S. producers concerned about maintaining the markets they already have.

“There’s a wait and see on [the research] side,” says Peter Laudeman director of trade policy for U.S. Wheat Associates. “We’ve been focused in the near term on the Food for Peace program.”

In mid-February, Republican Representative Tracey Mann of Kansas introduced H.R. 1207, which, if passed, would transfer the functions of USAID’s Food for Peace to USDA. While the bill remains in committee , Laudeman says he’s optimistic about it moving forward.

“I think it’s really got solid momentum and broad support from key Congressional Republicans,” he says.

In the short term, Laudeman adds any grain already tendered to USAID and in the queue is moving to its destination. However, according to a still active USAID senior humanitarian advisor, who oversees more than $1 billion in U.S. government global food assistance, the agency remains in financial lockdown and is unable to process or distribute shipments.

Members of U.S. Wheat and the National Association of Wheat Growers have expressed support for moving Food for Peace from USAID to USDA .

“If USDA can forecast [humanitarian food needs] better that would be great. Forecasting was hard with USAID,” Laudeman says. “We understand that humanitarian aid can be unpredictable, but in recent years, they haven’t even provided a rough forecast.”

While USAID funds a Famine Early Warning System Network that provides the public with a six-month forward outlook of emergency food assistance needs on a monthly basis ( the site is currently down in accordance with new USAID orders ), Laudeman says USAID does not translate that data into notices to the agriculture sector for the types of food, volumes and locations they intend to program for a given year.

USAID spent about $5 billion in food assistance globally in fiscal year 2023/24, with roughly $2 billion (or 41%) of that going to purchase and program U.S. commodities. To support that emergency assistance, the agency purchased 648,000 metric tons of commodities, worth almost $481 million, from U.S. producers in FY 2024. “The previous year was higher, closer to 1.1 million metric tons.

The $2 billion in U.S. commodity food assistance includes the cost to purchase commodities and move them overseas, he adds: “roughly 30% of that is direct commodity cost that went to farmers.”

The senior adviser also notes USDA (which purchases commodities for USAID) tracks the benefits of exports on the American economy , including payments for warehousing, port facilities and transportation.

“For every $1 that goes to purchasing a commodity, another $1 goes into the U.S. economy,” he says, and every billion dollars USAID invests in procuring American commodities translates into 6,338 American jobs. Some of those jobs are with USAID, many of which have now been eliminated .

When asked about H.R. 1207’s proposal to move USAID’s Food for Peace program to USDA, the adviser says, “I don’t care what agency it goes through. My first priority would be that our assistance continues to reach families facing hunger and famine. USDA has procurement capacity — they already do that for us. What you lose are humanitarian-related skill sets. We have a global footprint of staff who know where food needs to go in their countries.”

As of late February, the senior adviser says USAID partners such as Catholic Relief Services and International Rescue Committee are facing massive staff layoffs and financial cuts of up to 50%.

“All our partners are scaling down activities because they have no funds to continue,” he explains. “Despite humanitarian waivers, finance systems have been locked for anything that USAID has been paying for.

“There is something about America’s traditional values and image abroad, which is in the process of being lost,” he adds. “For ages, Americans have understood that with great power and resources comes great responsibility.”

Researchers Point to Interdependency of Global Markets
U.S. Wheat’s Laudeman says his members are happy for the short term and hopeful about H.R. 1207.

“However, no one is going to say this is as easy as turning a switch off and turning it back on again,” Laudeman says.

Goldsmith at SIL says he hopes industry partners and legislators will give the research programs around the nation that no longer have funding some review.

“These are cherished, highly productive mechanisms based in land-grant universities in 17 states doing good market development work,” he explains. “SIL isn’t the only game in town, but it’s the biggest, operating in 31 countries.”

It also has a huge private-sector network devoted to developing new markets that now won’t develop, he adds: “The U.S. farmer is going to be at a disadvantage.”

Dahl agrees: “Having been in agriculture my whole life, I know there is a linkage not fully appreciated between what we do here in the U.S. and what we’re doing elsewhere. We need to look at improving productivity in these countries, getting them feedstuffs, which may be supplied by U.S. farmers, and technical support provided by U.S. manufacturers.”

But looking past the economic benefits of providing research and food aid abroad, Dahl is worried about long-term impacts on U.S. agriculture, food security and immigration.

“We will have less of a chance to observe disease outbreaks that may end up here from other places,” he explains. “Without our input, you’ll see a continued decline in the ability of some of these places to feed themselves. Hunger is a great motivator to move.”

Dahl believes the better job the U.S. does of helping people improve their own productivity, the less likely they will try to emigrate.

Your Next Read: USAID Dismantling: What It Means for Farmers and Ag Research

USDA Prepares to Protect Farmers in a Trade War

Tue, 04 Mar 2025 22:28:13 GMT

As the clock struck midnight on March 4, President Donald Trump’s new tariffs on imports from Canada, Mexico and China went into effect. Almost immediately, global markets started to react, and trading partners retaliated.

While the full economic consequences of the trade war remain to be seen, Secretary of Agriculture Brooke Rollins has promised to have a plan, such as the Market Facilitation Program (MFP), ready for farmers, if needed. In 2019, MFP provided direct payments to producers impacted by retaliatory tariffs, resulting in the loss of traditional exports.

“Everything is on the table right now. Everything. I know that President Trump, whom I speak with regularly, realizes the state of the farm economy in this country,” Rollins said on Sunday at Commodity Classic . “The last time, I know, he pushed Secretary Perdue to ensure we were able to make whole–as best as we could–some of those, and hopefully most of those, if not all, who had been hurt. We’re building the team at USDA to ensure we have the structure and the plan in place to allow us to move very quickly.”

In an interview with Farm Journal at Commodity Classic, USDA Economist Seth Meyer says he has been instructed by Secretary Rollins to be ready for a relief program, and he’s started calculating what possible relief could look like.

“Calculating something right today would not be helpful because we don’t know where we’re going to be, but absolutely, the Secretary instructs: ‘You need to be ready, have your pencil sharpened and have your tools available. Think about how you would proceed,’” Meyer says. “We are ready in that backstop. It won’t be easy. We’ve talked a lot about different countries. We’ve talked about reciprocal trade, but we are indeed sharpening our pencils to be able to do what she’s asked us to do.”

Here are the key details of the U.S. tariffs and retaliation from Canada, Mexico and China.

(Farm Journal)

Canada responded swiftly with plans to impose 25% tariffs on nearly $100 billion of U.S. imports over two tranches. Mexican President Claudia Sheinbaum plans to announce retaliatory tariff and non-tariff measures against the U.S. at an upcoming rally in Mexico City’s central square.

Meyer’s question is, “Can Mexico afford to retaliate?”

(Farm Journal)

As President Trump’s tariffs drew swift retaliation from trading partners, the ag industry was quick to react.

Impact on Farm Machinery
Equipment makers are concerned about the additional duties, especially after a rough year for the industry.

“We have spent decades laying down supply chains across the world. Our industry is global — 30% of all equipment made in the U.S. is destined for export. Canada is our largest market outside of the U.S.,” says Johan “Kip” Eideberg, senior vice president – government and industry relations, Association of Equipment Manufacturers (AEM). “If we want to create more jobs here in America, we need to sell more equipment and that means selling to customers outside of the U.S.”

As detailed in From the Factory to Your Fields: Where Farm Equipment Is Made , the ag equipment manufacturing industry is fully integrated across the three North American allies involved in the so-called “trade wars.”

“Anytime you disrupt those tightly connected supply chains — and tariffs would be a direct disruption — it’s going to have a serious impact on equipment manufacturers and on our farmers,” Eineberg says. “Given that Canada is our largest export market, we’re sending almost $10 billion worth of goods to Canada every year, there’s a lot at stake here.”

In 2018, Eineberg estimates, tariffs on steel, aluminum and farm inputs from China drove up the cost of making equipment in the U.S. by about 9 percentage points.

“Obviously, manufacturers will try to absorb as much of that as they can, but inevitably some of it will be passed down to the consumer, which in this case is our farmers and ranchers,” he adds.

AEM is also sounding the alarm on the compounding effect of tariffs, specifically due to the tight integration of manufacturing cycles on both sides of the border. There are often cases, Eineberg says, where components and raw materials are shuttled three to five times across the border between different factories in the manufacturing process. That means each time a piece of steel or other raw material being manufactured into a component for a tractor crosses the border, the tariffs multiply.

An example of the cross-border journey of one piece of agriculture equipment from raw material to delivery on the farm.

(AEM)

Impact on Rural America and Fertilizer
American Farm Bureau President Zippy Duvall expressed alarm about potential harm to farmers resulting from imposing stiff tariffs on the top three agricultural markets by value for the U.S.

“Farm Bureau members support the goals of security and ensuring fair trade with our North American neighbors and China, but, unfortunately, we know from experience that farmers and rural communities will bear the brunt of retaliation.” Duvall says.

Of note, more than 80% of the U.S. supply of potash , a key fertilizer product, comes from Canada.

“Tariffs that increase fertilizer prices threaten to deliver another blow to the finances of farm families already grappling with inflation and high supply costs,” Duvall adds. “The uncertainty hits just as operating loans are being secured and spring planting approaches, leaving farmers in a tough spot.”

(Farm Journal)

Read: Fertilizer Manufacturers and Retailers React to Trade Tariffs

Impact on Soybeans
During the 2018 trade war with China, U.S. agriculture experienced more than $27 billion in losses, with soybeans accounting for 71% of those losses, according to the American Soybean Association (ASA). Unlike in 2018, farmers are in a more tentative financial situation in 2025. Commodity prices are down nearly 50% from three years ago, while the costs for land and inputs, such as seed, pesticides and fertilizer, are high.

In an ASA statement, it says for years the organization’s farmer-members have consistently maintained their position that they do not support the use of tariffs, which threaten important markets and raise input costs for farmers, as a negotiation tactic.

“Farmers are frustrated. Tariffs are not something to take lightly and ‘have fun’ with. Not only do they hit our family businesses squarely in the wallet, but they rock a core tenet on which our trading relationships are built, and that is reliability. Being able to reliably supply a quality product to them consistently,” says Caleb Ragland, ASA president and soybean farmer from Magnolia, Ky.

Soybeans by far make up the largest volume of ag products exported to China. In 2024, U.S. exporters sent 27 million metric tons of soybeans to China valued at $12.76 billion, according to USDA. Mexico is the second-largest customer for whole soybeans, soybean meal and soybean oil. Canada is the fourth-largest customer for soybean meal.

“Soybean producers face huge, disproportionate impacts from trade flow disruptions, particularly to China,” Ragland says. “And we know foreign soybean producers in Brazil and other countries are expecting abundant crops this year and are primed to meet any demand stemming from a renewed U.S.-China trade war.”

Impact on Corn and Ethanol Demand
Market analysis shows tariffs won’t solve the U.S. trade deficit and instead will just shift business to other countries, says Neil Caskey, CEO, National Corn Growers Association (NCGA).

“We issued a study back in the fall that documented the implications of tariffs and specifically retaliation in a trade war — it’s not good for corn farmers, farmers in general,” he says. “We did that in conjunction with the American Soybean Association, and it concluded a trade war is really only good for Brazil, and we hope to avoid that.”

The top two destinations for corn and ethanol are Mexico and Canada. According to Krista Swanson, chief economist, NCGA, 40% of U.S. corn exports go to Mexico and more than 40% of U.S. ethanol exports are shipped to Canada.

“[Corn] is a commodity [those countries] consume way more than what they produce, so they’re going to have to get it from somewhere,” she says. “There’s definitely some concern about losing corn [exports], but how much is lost is left to be seen because it depends on what happens with shifting trade flows.”

Impact on Beef and Pork Sectors
U.S. meat export could be impacted by the tariff war as well, with China singling out pork and beef for a 10% counter tariff. Mexico, China and Canada accounted for 8.4 billion in U.S. red meat exports last year, according to the U.S. Meat Export Federation (USMEF).

USMEF is disappointed no agreements were reached to avoid or postpone the tariffs, but president and CEO Dan Halstrom says just because there are tariffs, doesn’t mean trade will stop.

“I do think the thing that we have definitely in our favor is that demand for our products globally is record breaking. I mean, it’s as good as I’ve ever seen it in 40-plus years,” he says. “I think that we have a very unique product. We got to keep that in mind because that’s a big leverage point.”

Halstrom says it could be a bumpy ride for a while, but it’s not something exporters can’t overcome.

Read: Industry Comments on Retaliatory Tariffs on U.S. Pork and Beef

China Hits U.S. Agriculture, Says It Won't Be Bullied by Fresh Trump Tariffs

Tue, 04 Mar 2025 16:27:36 GMT

China retaliated swiftly on Tuesday against fresh U.S. tariffs with hikes to import levies covering $21 billion worth of American agricultural and food products, moving the world’s top two economies a step closer towards an all-out trade war.

Beijing also slapped export and investment curbs on 25 U.S. firms, on grounds of national security, but, unlike when it retaliated against the Trump administration’s February 4 tariffs, this time avoided punishing any household names.

“Trying to exert extreme pressure on China is a miscalculation and a mistake,” a foreign ministry spokesperson told a press conference in Beijing, adding that China had never succumbed to bullying or coercion.

The latest retaliatory measures came as the extra duty of 10% U.S. President Donald Trump threatened for the world’s second-largest economy took effect at 0501 GMT on March 4.

That makes for a cumulative 20% tariff in response to what the White House considers Chinese inaction over drug flows.

China has accused the White House of “blackmail” over its tariff hike, saying it has some of the world’s toughest anti-drug policies.

Analysts say Beijing still hopes to negotiate a truce on tariffs, deliberately setting its hikes below 20% to leave its negotiators room to hash out a deal, but each escalation reduces the chance of a rapprochement.

“China’s government is signaling that they do not want to escalate,” said Even Pay, an agriculture analyst at Trivium China.

“It’s fair to say we’re in the early days of Trade War 2.0,” Pay said, adding there was still time to avoid a protracted trade war if Trump and Chinese President Xi Jinping were able to strike a deal.

Later on Tuesday, China said it would investigate U.S. producers of a type of optical fibre for circumventing anti-dumping measures, suspended the import licenses of three U.S. exporters, and halted China-bound shipments of U.S. lumber.

Additional Levies to Hit About 15% of U.S. Exports

The new U.S. tariffs represent an additional hike to pre-existing levies on thousands of Chinese goods.

Some of these products took the brunt of sharply higher U.S. tariffs last year under then President Joe Biden, including a doubling of duties on semiconductors to 50% and a quadrupling of tariffs on electric vehicles to more than 100%.

The 20% tariff will hit several major U.S. consumer electronics imports from China that had previously escaped untouched, from smartphones and laptops to video game consoles, smartwatches, speakers and Bluetooth devices.

China responded immediately after the deadline, with an additional tariff of 15% tariff on U.S. chicken, wheat, corn and cotton and an extra levy of 10% on U.S. soybeans, sorghum, pork, beef, aquatic products, fruits and vegetables and dairy imports from March 10.

The additional levies will hit about 15% of U.S. exports to China or $21 billion worth of trade, according to Reuters calculations based on U.S. census data for 2024.

Beijing also added 15 U.S. companies to its export control list that bars Chinese firms from supplying American companies with dual-use technologies.

It also put 10 U.S. companies on its Unreliable Entity List for selling arms to Taiwan, which China claims as its own territory, although the self-governing island rejects that.

“We’re still on track to 60% (tariffs),” said Cameron Johnson, a supply chain expert at Tidalwave Solutions, referring to Trump’s campaign trail threat.

“At the moment, with 20%, it just barely moves the needle for companies wanting to move potential supply chains out of the country,” he added.

“At 35%, we start to see that companies will start to move or consider other strategies.” China is the biggest market for U.S. agricultural products, and the sector has long been vulnerable to being used as a punching bag at times of trade tension.

Chinese imports of U.S agriculture goods fell for a second year to $29.25 billion in 2024, from $42.8 billion in 2022.

China’s futures markets were steady on the news.

The most actively traded soymeal and rapeseed meal futures in the world’s biggest agricultural importer rose 2.5% on Monday after the Global Times said Beijing planned to target U.S. agricultural exports.

Supply Chain Shifts

Trade tension risks exacerbating U.S. inflation and China’s efforts to ensure a durable post-COVID economic recovery, which has been heavily reliant on exports.

On Tuesday, the U.S.-China Business Council (USCBC) applauded Trump’s goal of tackling illegal trade in fentanyl, but said raising tariffs on Chinese products was not the way to achieve that goal.

“Across-the-board tariffs will hurt U.S. businesses, consumers, and farmers and undermine our global competitiveness,” its president, Sean Stein, said in a statement. All the same, the China-U.S. trade war could benefit third countries.

Since the United States and China imposed tit-for-tat tariffs during Trump’s first term, Beijing has moved to cut its reliance on American farm goods by spurring domestic production and buying more from countries such as Brazil.

U.S. agricultural exporters could also step up efforts to replace the China market by shipping more to Southeast Asia, Africa and India.

“Chinese tariffs on U.S. wheat and corn imports should be supportive for demand for Australian wheat and barely exports,” said Dennis Voznesenki, an analyst at Commonwealth Bank in Sydney.

“However, China’s recent slowdown in imports of feed grains from all origins should temper the excitement.”

(Reporting by Joe Cash, Mei Mei Chu and Nicoco Chan; Additional reporting by Ethan Wang, Qiaoyi Li, Ellen Zhang, Lewis Jackson and Ella Cao; Editing by Christian Schmollinger and Clarence Fernandez)

USDA's Rollins: 'Let's Go Barnstorm The World And Find New Partners' For Trade

Tue, 18 Feb 2025 18:04:15 GMT

On Brooke Rollins’ first full week on the job as Secretary of Agriculture, she addressed the 600 farmers, ranchers and industry leaders in Kansas City for the 2025 Top Producer Summit.

High on Rollins’ list of priorities was the topic of trade and President Donald Trump’s vision for U.S. agriculture moving forward.

While Rollins did not shy away from addressing the administration’s decision to implement trade tariffs, noting “farmer and rancher concerns are legitimate,” she focused on what she sees as her role ahead.

“My job is to ensure that as President Trump and our trade representatives are making their decisions that I am in the room and advocating on behalf of our people, on behalf of all of you,” she told Top Producer Summit attendees.

One of her key objectives, she says, is to find and expand market access for U.S. agricultural products domestically and abroad.

“Let’s go barnstorm the world, and let’s go find some more trade partners and access [to market opportunities],” she says.

Rollins says her goals for trade are a reflection of Trump’s vision and his determination to make agriculture part of the “golden age” he sees ahead for the U.S.

Trump is the consummate deal maker, Rollins notes, able to side-step bureaucracy and red tape in the process to work with world leaders.

“I don’t know that in the last 250 years, we’ve had anyone in office like President Trump,” she says. “He is a very unusual, remarkable and fearless man, and he wants to make a deal, and in the best way, and put America first.”

Agriculture Secretary Brooke Rollins spoke to a crowd of 600 farmers, ranchers and industry leaders at the 2025 Top Producer Summit.

(Jim Barcus)

Making Headway With Trade
Sen. Roger Marshall of Kansas, who moderated the conversation with Rollins, highlighted Trump’s work to build trade during his first term.

“He redid USMCA, and now that’s our largest ag partnership, with Mexico and Canada,” Marshall says. “He gave us South Korea and Japan, which has been so important to Kansas and our cattle industry, as well as trade 1.0 with China.”

Marshall then mentioned the headway he believes Trump and team have made with India.

“I see India replacing China as our major trade partner, as well that China is growing right now,” Marshall says. “I think there’s huge opportunities in India.”

U.S. ethanol, cotton and tree nuts are three of the top agricultural exports to India, a country that has in the past impeded agricultural trade with tariffs and non-tariff barriers alike. Trump called out the barriers to trade following recent conversations with India’s Prime Minster Modi.

A joint statement after the Trump-Modi meeting said Washington welcomed New Delhi’s recent steps to lower tariffs on select U.S. products and increase market access to U.S. farm products, while seeking to negotiate the initial segments of a trade deal by the fall of 2025.

Rollins says the progress underway with India was just one step forward to address what she described as a trade crisis for the U.S.

“Our exports are down $37 billion this year and likely to be down $42 billion in the months to come. This is a crisis, and this is something that I understand inherently,” Rollins says.

“We have a tremendous amount of work to do,” she adds. “But my promise to you is this, and my commitment will never waver, that every minute of every day for the next four years, I will do everything within my power with hopefully God’s hand on all of us and our work to ensure that we are not just entering the golden age for America, as my boss, President Trump, likes to say, but that we are entering the golden age for agriculture.”

Secretary Rollins joined Chip Flory on AgriTalk. Listen to their discussion about trade policy and tariffs; avian flu; and disaster and economic aid.

Your next read: Senate Overwhelmingly Confirms Brooke Rollins as 33rd Secretary of Agriculture

USAID Dismantling: What It Means for Farmers and Ag Research

Sat, 15 Feb 2025 00:07:52 GMT

In Pawnee County, Kan., some farmers are rethinking their spring planting plans. With the sudden dismantling of the U.S. Agency for International Development (USAID), sorghum farmers are worried there won’t be a market for their product. They’re not alone. At least 400 producers around the country rely on contracts with USAID, and many more rely on the agency without even knowing it.

“USAID often buys from grain elevators, so that impacts smaller farmers,” says Jordan Schermerhorn, a recently furloughed USAID contractor who worked with two countries in Asia. “Tons of small farmers provide USAID assistance without even knowing it.”

USAID spent about $5 billion in food assistance globally in the 2023/24 fiscal year, with roughly $2 billion of that going to purchase U.S. commodities.

According to a former deputy assistant administrator at USAID’s Feed the Future program, the agency purchased 1.1 million metric tons of food from U.S. farmers and ranchers last fiscal year, including sorghum, corn, beans, rice and vegetable oil, for distribution to 45 million people in need of emergency food and acute nutrition assistance in 35 countries.

Sorghum Sits In Storage
Kim Barnes, chief financial officer with the Pawnee County Cooperative Association (PCCA) in Larned, Kan., says the 2,200-member cooperative currently has 1.5 million bushels of sorghum in storage and no one to buy it given the Chinese market is dissipating right along with the Food for Peace program, the longest standing permanent program for international in-kind food aid, which is administered by USAID.

The 120-year-old PCCA’s members grow not only sorghum but wheat, corn and soybeans. “If we kept all those commodities at home, we couldn’t afford to eat,” says Barnes, who indicates the local economy is dependent on Pawnee County producers’ access to global markets.

“[Our association] is the largest property taxpayer with a corporate office in Pawnee County,” Barnes adds, contributing $3.2 million in property taxes the last 10 years, and the organization generates some $300 million in revenue. “When the farm economy is hurting, it hurts all of us.

“My concern is with another crop coming, will the economy be affected that much more?” Barnes adds. “These farmers may not have any place to go with their product.”

He’s heard local producers talk about planting dryland corn instead of sorghum, but “you’ve got to have moisture to do that,” he notes.

Sorghum is a critical cash crop in western Kansas, where the Ogallala Aquifer is shrinking because it requires less water to grow than corn, soybeans or wheat.

While a federal judge has extended a restraining order preventing the Trump administration from fully dismantling USAID until Feb. 21, $489 million of food assistance and more than 500,000 metric tons of food sourced from American producers is currently sitting in ports or in transit, much of it at risk of spoiling, according to a Feb. 10 report from USAID’s Office of Inspector General .

Schermerhorn says even if that food gets moving, with all the furloughed USAID staff and contractors, there is no one to get it where it needs to go.

“It’s really hard to drive a car with two wheels,” she says. “You need all the other parts. You can’t just put it on a ship. Someone has to be there to receive it and work with local non-government agencies in that country to distribute it.”

Bill Introduced to Transfer Program to USDA
Last week Republican Representative Tracey Mann of Kansas introduced H.R.1207, which, if passed, would transfer the functions of USAID’s Food for Peace program to USDA. The bill is currently in committee . While Mann’s office declined to comment on the bill, PCCA’s Barnes says he’s hopeful that, if passed, the legislation would relieve some of the economic concerns of farmers who rely on the Food for Peace program as a market for their products: “I very much believe that it will make a difference to get it out of the hands of USAID and to USDA, which has the money to run this program.”

It doesn’t matter who runs the program, Barnes says, as long as it’s an agency that can make things happen.

“If you can stabilize the economy in these [developing] countries, then you’ll create consumers,” he adds.

Research Programs — and Market Access — Take a Hit
However, with the dismantling of USAID, the likelihood of developing consumers in places like Africa or Southeast Asia diminishes greatly. Among the other impacts of USAID’s dismantling are cuts to agricultural research programs across the U.S. USAID provides significant funding to 19 land-grant university-based innovation labs across 17 states conducting thousands of ag research projects, many of them directed at helping develop agricultural markets abroad.

Kerry Clark, Ph.D., associate research professor at the University of Missouri and director of International Programs for the College of Agriculture, says, “helping countries thrive enough to become consumers” is a critical part of the innovation labs’ missions. Until USAID funding was cut off Jan. 25, Clark oversaw research, in partnership with the Soybean Innovation Lab (SIL) based at the University of Illinois Urbana-Champaign, focused on building the mechanization of farms in sub-Saharan Africa. Another SIL-affiliated research project at the University of Missouri was working on developing soybean lines with natural resistance to rust.

The innovation labs essentially “de-risk the market” by conducting research, developing new seed varieties, mechanizing agriculture and opening markets in emergent nations the private sector cannot afford to do, explains Peter Goldsmith, Ph.D., SIL director. Among other projects that halted with USAID’s dismantling was funding for developing a pull-behind combine that a U.S. agribusiness was looking to license in Africa.

“But now that’s done; nobody is going to see those plans,” Goldsmith says, “and the American company has no market.”

Goldsmith indicates Africa is the new frontier for soybeans, as an export market for U.S. growers.

“One of the most important things the innovation labs were doing was providing market access to U.S. farmers,” Clark says, “not just in trade negotiations but also in indirect ways by creating a populace that is not starving so they have extra income to buy poultry, for example, which in turn expands the global market for soybean-based feeds.”

Clark also fears impacts could be far-reaching and long-term even if universities can ultimately gain other funding for ag research.

“With USAID pulling out of these countries, those programs are all going to be left to China,” she says. “If a country is looking at importing grain, they’re going to look at what benefits come with grain. USAID was providing more benefits than just food.”

Your Next Read: The True Cost of What Farmers Argue is a Broken Immigration System in the U.S.

What A Battle Over the Panama Canal Means For U.S. Agriculture

Mon, 27 Jan 2025 19:21:26 GMT

The Panama Canal is in President Donald Trump’s crosshairs with him pledging in his inaugural address to take it over due to Chinese influence. As a result, Panamanian authorities have initiated an audit of Panama Ports Company. Because any disruption in access to this critical logistics channel would hurt U.S. ag exports, the industry is closely watching the developments.

The Panama Canal has been at the center of controversy since the U.S. turned it over to Panama in 2000 under a treaty signed in 1977.

“An ingredient of that treaty is the canal must be neutral. It can’t prefer one country over the other,” says Mike Steenhoek, executive director, Soy Transportation Coalition. “If that ever was in danger or peril, U.S. military intervention would be justified.”

The Areas in Question
While Trump has called Chinese influence in Panama a national security issue, Steenhoek says the specific issue is their influence at two regional ports.

“Two of the five are actually operated by a Hong Kong-based company called Hutchison Port Holdings,” Steenhoek says. “The company originally received a 25-year concession to operate those two ports: one on the Pacific side and one on the Atlantic side in the late 1990s. Just recently, that 25-year concession came up and was re-extended.”

Trump also claims U.S. ships have been unfairly charged for using the canal. Steenhoek attributes higher freight charges to the drought, which limited service, but also points out the tolls are transparent and governed by the treaty signed with the U.S.

“Part of the treaty made sure it had to be governed on a neutral basis, so one country or one industry didn’t receive preferential treatments,” Steenhoek says. “The tolls are very public and how they’re assessed is based on different types of vessels and different types of tonnage that’s utilizing the canal.”

Meanwhile, Panama’s president has declared Panama’s control of the canal as “non-negotiable.” The ag industry can only hope for a resolution that doesn’t disrupt trade.

Watch this 3-minute video to learn more about the Panama Canal:

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Ag Economist Offers Farmers What He Calls 'Some Contrarian Advice'

Fri, 17 Jan 2025 19:27:56 GMT

With president-elect Donald Trump set to re-enter national office on Monday, Scott Irwin offers row crop growers a word of caution and what he describes as a bit of contrarian advice.

“I know farmers have had some optimism about recent grain prices, but I think it’s a good time to dip toes in the water and consider getting some downside price protection for the 2025 crop,” Irwin told Farm Journal during the Illinois Soybean Association Field Advisor Forum earlier this week.

“It’s a little hard to do that when you’re pricing at what would be a full cost loss, but I think that potential immediate downside risks of trade problems we could be heading into could hit both corn and soybean prices moving forward really hard,” he adds.

In analyzing corn and soybean prices, Irwin is predicting corn at $4 per bushel and soybeans at $10 per bushel for 2025. Furthermore, while net farm income hit a peak at over $180 billion in 2022, his latest projections for 2024 show a significant drop to around $40 billion.

The University of Illinois agricultural economist says that procuring some downside price protection is his No. 1 recommendation to farmers for the short-term.

Will Trump Impose Tariffs?

Weighing on Irwin’s mind is what Trump will do regarding trade, namely whether he will impose tariffs on any or all of the United States’ three largest trading partners - Canada, Mexico and China.

Trump has said he will impose a 25% tariff on imports from Canada and Mexico until they clamp down on drugs, particularly fentanyl, and migrants crossing the border. He has separately announced the U.S. will impose tariffs from 10% to 60% on goods from China.

“The one thing I learned thinking about economic implications during Trump 1.0 is that when he makes a pronouncement on economic policy, you better take him seriously,” Irwin says.

A Look In The Rearview Mirror
U.S. agriculture has some recent history of what could happen if tariffs are imposed and trade partners decide to implement tit-for-tat retaliations.

Irwin specifically referenced China’s decisions during Trump’s first administration as an example. When the U.S. imposed tariffs on China in 2017-18, the country retaliated on U.S. soybeans and took its business to South America, namely Brazil.

The financial fallout for U.S. agriculture was significant. USDA Economic Research Service data show the United States exported $12.2 billion in soybeans to China in 2017. However, in 2018, U.S. exports to China fell to $3.1 billion, a 75% decrease.

“A lot of people downplayed that experience because, honestly, it didn’t last that long,” Irwin recalls. “The worst of it was only about six to eight months.”

He attributes the short duration partly to the crisis China went through at the time with swine flu, which decimated pig herds and required the company to undertake extensive herd rebuilding. In the process, China was unable to source enough soybeans from Brazil to meet demand.

“Unless China gets a new swine flu disease that’s not going to bail us out this time,” Irwin says.

China Is Already Changing Course
In response to tariff concerns, Chinese oilseed importers have already shifted gears to purchase competitively priced Brazilian soybeans.

The move is hitting U.S. suppliers towards the end of their peak marketing season in January, according to a Reuters article published on Friday (Chinese buyers switch to cheaper Brazilian soybeans ) .

The Reuters article says the move is likely to leave the U.S., the No. 2 soybean exporter after Brazil, with 10.34 million metric tons of beans by the end of the 2024/25 marketing year in August, the highest in five years, according to U.S. Department of Agriculture estimates.

‘Something Always Happens’
Regardless of his concerns about trade, Irwin says it’s important to keep some perspective on what he describes as a normal price cycle for agricultural commodities currently.

“Don’t get too pessimistic ever about prices or too optimistic, that’s my attitude,” he says. “Something always happens eventually (to send prices up or down).

“This summer, we could get a big drought here in the U.S., and all of a sudden, grain prices are at very profitable levels,” Irwin says. “Or it might take us several years to grind our way out of the trade problems that I think we could be facing, and that’ll be a lot tougher environment. But even if that happens, it won’t last forever, and that’s, I think, a very important mindset to have.”

Your Next Read: Treasury Nominee Bessent Defends Trump Policies in Testimony; Promises to Press China to Resume Ag Purchases in Phase 1 Agreement

Ripple Effect of Tariff Uncertainty on the Global Economy

Tue, 07 Jan 2025 21:18:53 GMT

The uncertainty surrounding potential U.S. tariffs is already exerting significant pressure on the global economy, according to a Bloomberg Economics model. Even before new tariffs are implemented, this uncertainty is impacting stock markets, trade and production.
Economic impact of tariff uncertainty

Stock market pressure: Global stock prices are expected to decline as investors react to fears about trade tensions affecting corporate profits and economic growth.
Trade disruption: Businesses face a challenging environment for international transactions, with hesitation stemming from the unpredictable trade landscape.
Production slowdown: A cautious approach to investment and expansion could lead to reduced global production soon.

Broader economic context

Trump’s tariff stance: President-elect Donald Trump has reinforced his commitment to a broad tariff policy, contradicting earlier reports of a potential scaling back, heightening market concerns.
Historical context: Past tariffs imposed during Trump’s first term negatively impacted the U.S. economy, as noted by the Federal Reserve Bank of New York.
Weaponizing uncertainty: Adam Posen of the Peterson Institute for International Economics describes the strategy as “weaponizing uncertainty,” potentially amplifying the economic strain.
Global growth risks: A UBS study warns that extreme tariff scenarios, such as a 60% tariff on Chinese exports, could significantly harm global growth, particularly for China.

Bottom line: This analysis highlights how trade policy uncertainty alone can create tangible economic effects, including market volatility and cautious behavior across sectors. With potential U.S. trade policy shifts looming, the global economy is bracing for continued challenges.

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What We Learned in 2024: The U.S. Dollar Matters, A Lot

Thu, 02 Jan 2025 19:49:41 GMT

2024 was full of lessons in the commodity markets. One of the biggest lessons just might be how critical the value of the U.S. dollar can be, according to AgResource Company founder and president Dan Basse. And to start 2025, the U.S. dollar continued its impressive run.

The first trading day of 2025 saw the U.S. dollar reach the highest level since September 2022. Not only does the news mean the Federal Reserve could keep interest rates at elevated levels, but there’s also expectations the U.S. dollar will remain strong this year due to policies proposed by President-elect Donald Trump.

Looking back at 2024, though, Basse says the biggest thing we learned is the U.S. dollar matters.

“Thursday morning, the Russian Ruble was at 115; the Brazilian Real was at 6.21. This is stimulating production around the world outside of the United States. And I think that’s something we really need to understand and learn from going forward,” says Basse. “Our margins are bad in United States. But for Brazilian farmers and for Russian farmers, they are still making money and willing to expand. So, I don’t have any expectations for any supply lever to pull global production back. And I think that’s going to be very important as we look towards the new year.”

Basse points out the Brazilian real was down 23% in 2024, which ranked the worst of all emerging currencies. The ruble was not far behind.

The Real and Ruble rates.

(AgResource Company )

China’s Crumbling Currency

Basse says the other important lesson from 2024 deals with China, and the fact China doesn’t have to come to the U.S. to buy commodities.

“The Chinese really have slowed down their corn and wheat imports this past year. I think that’s important for next year. And for soybeans, they’ve really tapped on the brakes,” says Basse. “With that in mind, I don’t have a demand driver that really keeps markets heading higher for long periods of time outside of weather scares.”

According to Reuters, China’s yuan fell to 14-month lows as worries about the health of the world’s second-biggest economy, as well as the prospect of increased tariffs under Trump. Pro Farmer Washington correspondent Jim Wiesemeyer calls China a major wild card to watch in the new year.

“You have to watch China because they’re flexing their muscles, but they have a relatively weak for them economy,” Wiesemeyer says. “I think that’s part of the problem in their import side. So for China, not only from a market aspect, but geopolitical stance and Taiwan there are concerns.”

5 Biggest Policy Takeaways from 2024

Wiesemeyer provided his list of the top 5 takeaways from 2025 when it comes to policy and politics.

Your Next Read: China 2025: 5 Predications to Watch

China 2025: 5 Predictions to Watch in the New Year

Thu, 02 Jan 2025 16:36:15 GMT

China was plagued with challenges in 2024. From economic headwinds and an erosion of trust to a deteriorating political environment, those struggles in 2024 aren’t expected to be resolved anytime soon.

James Palmer’s analysis in Foreign Policy’s China Brief described 2024 as a “ relatively quiet if depressing year for China .” But Palmer pointed out 2025 could be a lot stormier, especially when it comes to clashes with the U.S.

Palmer outlined five significant trends shaping China in the coming year:

A harsh trade war: With Donald Trump’s second term, his tariff-heavy policy could escalate economic tensions, intensifying China’s manufacturing struggles while leveraging its global supply chain strength.
Brooding public discontent: Amid record youth unemployment and lingering effects of the pandemic, social disillusionment is growing. U.S.-imposed tariffs could become a scapegoat for economic grievances.
Grassroots government crisis: Local governments face crippling debt and revenue shortfalls, leading to withheld wages and corruption. This financial strain could spark unpredictable public protests.
Global opportunities: As the U.S. withdraws from international organizations under Trump, China positions itself as a stable global leader, particularly in U.N. forums.
The PLA on a leash: Military reforms and anti-corruption drives are curbing the PLA’s capacity for adventurism, with a focus on resolving internal issues rather than engaging in conflict.

Bottom line:
Palmer’s insights underscore both the challenges and opportunities facing China in 2025, painting a complex picture of its domestic and international dynamics.

China’s Manufacturing Slowdown in December
China’s manufacturing sector shows slower expansion in December. China’s private Caixin manufacturing purchasing managers index (PMI) indicated continued expansion for the third consecutive month in December, standing at 50.5, down from 51.5 in November. The slower pace highlights the stabilizing effect of Beijing’s recent economic stimulus measures.

While supply and demand improved, the pace of growth in output and new orders decelerated, and export demand remained weak amid global uncertainties. Employment contracted for the fourth straight month, and business optimism waned due to concerns over economic recovery and U.S./China trade tensions.

Experts suggest policies should focus on boosting household income and supporting disadvantaged groups to enhance economic resilience.

Xi Jinping Acknowledges Economic Challenges in New Year’s Address
In a rare deviation from his usual celebratory tone, Chinese President Xi Jinping acknowledged the challenges facing China’s faltering economy during his New Year’s address. Speaking on state broadcaster CCTV, Xi noted uncertainties in the external environment and the difficulty of transitioning economic drivers but urged confidence, asserting, “These can be overcome through hard work.”

The acknowledgment comes as China grapples with a sluggish post-pandemic recovery, marred by a struggling real estate sector and deflationary pressures. Recent government efforts include increased public borrowing, spending, and interest rate cuts aimed at stimulating weak consumer demand.

Xi confirmed that China’s economy grew “about 5%” in 2024, meeting the government’s target, though analysts question the validity of the figures. The Rhodium Group estimated growth closer to 2.4–2.8%, citing the government’s aggressive economic measures as inconsistent with moderate growth claims. The group projects 3–4.5% growth for 2025, contingent on favorable conditions.

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New Data: How The Fertilizer Industry Contibutes To The Economy

Fri, 13 Dec 2024 15:36:02 GMT

The Fertilizer Institute (TFI) has released its 2024 Fertilizer Industry Economic Impact Study , which details the contributions of the U.S. fertilizer industry to the economy and also explains the global nature of fertilizer markets.

“Fertilizer is a cornerstone of modern agriculture and a critical component of the global food supply chain,” said TFI president and CEO Corey Rosenbusch. “While the latest data reveals the industry’s significant domestic economic impact, it also provides an opportunity to educate people about fertilizer’s complex global network and its reliance on open markets and fair competition to meet the needs of American farmers.”

Imports and Exports
TFI’s study highlights how the United States operates as both a major fertilizer producer and consumer. Overall, it’s the world’s third largest fertilizer consuming country and accounts for nearly 11% of world consumption.

On the production side, it ranks as the world’s third largest producer of phosphate rock and third largest ammonia producer. U.S. phosphate is mined extensively in Florida’s Bone Valley region and nearly 40% of U.S. phosphate exports went to Canada in 2023.

Though the U.S. is the fourth largest producer of urea, it must also import a substantial amount to meet demand – serving as the third largest importer of urea in the world.

When it comes to imports, the U.S. leads the pack in potash – relying on imports for 98% of its potash needs. These mainly come from North American trading partner Canada.

Why the World Can’t Ignore the Demand for Potash

“Our ability to feed the world depends on maintaining and strengthening these vital trade relationships,” Rosenbusch concluded. “And what makes our industry so strong is the balance between domestic production and having reliable global trading partners.”

Direct Fertilizer Employment
The fertilizer industry is an important piece of the U.S. economy – contributing nearly $140 billion. According to the study, fertilizer directly accounts for:

46,301 manufacturing jobs
17,133 wholesale jobs
49,038 retail jobs

For each of those direct jobs in the fertilizer industry, TFI estimates 3.26 jobs outside of the industry are supported – totaling nearly 500,000 jobs for American workers. That makes up $36.5 billion in employment income.

To see how fertilizer impacts your specific region, or to view the full report, click here .

Your Next Read: Make Fertilizer Decisions With Confidence and Insight

Global Economy

The New Ag Economy: Why This Downturn is a Structural Shift, Not Just a Cycle

What You Need to Know:

The Evolution of the Cycle

Change Fatigue and Modern Volatility

Global Competitiveness and the Trade Reallocation

The Shift to “Friend-Shoring” and Resilient Supply Chains

The Rise of Generics and Decision Paralysis

AI: The “Undergraduate Intern”

Livestock and the GLP-1 Impact

Financial Stability: Not the 1980s

Strategic Reassessment: Winning at the Bottom

So Is This Ag Cycle Different?

A 'Neighbor' in Need: Why Cuba’s Energy Collapse Could Spark a U.S. Ag Export Surge

$40-a-Gallon Gas and a Grid in Collapse

Rice: A Massive Deficit for U.S. Growers to Fill

Looking Toward a Two-Way Future

The "What If" Scenario: How Geopolitical Anxiety Could Shift the U.S. Corn Market

The “What If” Scenario

U.S. Soybeans at a Crossroads: Navigating China Trade and Brazil’s Rise

China Trade Framework Details

Opportunities to Expand China Trade

China to Buy 8 MMT More Soybeans?

Brazil Primary Supplier of Soybeans to China

Brazil Has Room to Expand Soybean Acres

The Brazil “Paradox:” Expansion Amid Bankruptcies

Rethinking Global Competition in Soybeans

U.S. Needs to Pivot to Domestic Demand

Argentina Viewpoint

44 Million Acres: The New Frontier of Farm Consolidation and Growth

1. Scale Does Not Immune Operations from Consolidation.

2. Geography Trumps Diversification.

3. The 44-Million-Acre Transition.

4. Mapping the “Sweet Spot” for Expansion.

5. Integrity Is the Top Currency in Rental Markets.

6. The “Willingness” Factor in Technology.

Download the Full Report

Atlanta Fed Chair Bostic Recognizes Sectors of Agriculture Are in Crisis

Rising Expenses and the Growing Debt Burden

Fed Policy: Why Patience is Required for Rate Cuts

Consolidation and the Transformative Potential of AI

Companies Team Up To Accelerate Ag Innovation With Artificial Intelligence

Farmers Face Budget Squeeze And Balance Sheet Challenges—Echoes Of A Decade Ago

More Cost Pressures Heading Into 2026

This Is Not A Repeat Of The 1980s

Strategies for the Current Climate

Opportunity Will Still Knock

Caleb Ragland Named Pro Farmer's 2025 Person of the Year

Don’t snooze on Japan

Dollars And Dirt: Navigating The Financial Reality Of Conservation Farming

‘Farmers Can’t Outyield the Balance Sheet Anymore’

Can China Live Up to Its 12 MMT Soybean Promise?

Markets in a Holding Pattern But Not for Long

The Million-Dollar Question: Can China Really Buy 12 MMT?

Economists Cast Doubt

One hundred percent of economists argue tariff-aid payments will keep fertilizer prices high. Every economist surveyed says tariff aid would keep input prices elevated, particularly fertilizer.

What Traders Are Actually Pricing in

U.S. Soybeans Still Too Expensive for Private Buyers

Livestock Margins, Not Disease, Are the Real Drag on Feed Demand

If the U.S. Must Rely Less on China, What’s the Quickest Way to Do So?

What to Watch Through the End of the Year

Economy Nears Recession as Labor Weakness and Policy Uncertainty Mount

Can Farmers Weather The Trade Uncertainty Storm From China?

Grassley: Farmers Can Feed And Fuel The World At The Same Time. It’s Not Either/Or

Ag Research and Export Markets At Risk Without USAID

USDA Prepares to Protect Farmers in a Trade War

China Hits U.S. Agriculture, Says It Won't Be Bullied by Fresh Trump Tariffs

USDA's Rollins: 'Let's Go Barnstorm The World And Find New Partners' For Trade

USAID Dismantling: What It Means for Farmers and Ag Research

What A Battle Over the Panama Canal Means For U.S. Agriculture

Ag Economist Offers Farmers What He Calls 'Some Contrarian Advice'

Ripple Effect of Tariff Uncertainty on the Global Economy

What We Learned in 2024: The U.S. Dollar Matters, A Lot

China 2025: 5 Predictions to Watch in the New Year

New Data: How The Fertilizer Industry Contibutes To The Economy