Global Economy

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

Mon, 13 Apr 2026 21:22:19 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 .

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

Thu, 12 Feb 2026 14:27:14 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 17:46:42 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 00:20:02 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 20:20:35 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 21:13:24 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.

Dollars And Dirt: Navigating The Financial Reality Of Conservation Farming

Fri, 19 Dec 2025 20:48:35 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 22:54:51 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 21:14:40 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.

'The System Is Failing Us:' Why Real Change is Needed in U.S. Agriculture

Wed, 29 Oct 2025 13:57:31 GMT

Joe Maxwell doesn’t pull punches — especially on the topic of the future of American agriculture.

“The system is failing us,” says Maxwell, co-founder of Farm Action , during a recent episode of “Unscripted.” “It’s failing the people. It’s failing family farmers and ranchers. And it’s failing consumers. We can’t keep pretending everything’s fine.”

The Missouri farmer and former lieutenant governor shares an uncomfortable truth: The economic model that has shaped U.S. agriculture no longer works for those producing America’s food.

Commodity prices remain under pressure, input costs stay stubbornly high and government payments — while keeping some farms afloat — often mask deeper structural problems.

“We’re on this hamster wheel,” Maxwell says. “Government sends out a bailout, input companies raise prices and the money flows right back up to them. We think we’re being helped, but really, we’re just passing the money through.”

From Missouri Roots to National Reform

Maxwell grew up on a family farm in Missouri and lived through the 1980s farm crisis. That experience shapes his conviction that policy, not luck, determines who survives in agriculture.

That belief lead him and Ohio farmer Angela Huffman to co-found Farm Action, a nonprofit working to “connect the dots” between policy decisions, corporate consolidation and on-farm economics.

“We see a need for a farm organization that looks up and down the entire food chain,” Maxwell explains. “Everyone’s focused on one part of the system — fertilizer here, seed prices there, meatpacking somewhere else — but no one connects them. Farm Action connects those dots and pushes for policy that works for independent producers again.”

“We Don’t Feed the World Anymore”

Maxwell challenges one of agriculture’s most familiar slogans.

“Let’s be honest — we don’t feed the world anymore,” he says. “We import 60% of our fruit, over a third of our vegetables and record amounts of beef. We have a $47 billion agricultural trade deficit. The world is starting to feed us.”

He argues that U.S. farm policy has become overly dependent on exports of feed and fuel crops, while overlooking food crops and livestock production that directly feed Americans. Maxwell calls for farm programs that reward food production rather than commodity production.

“Every year we lose up to 1.8 million acres of pasture to row crops,” he notes. “That’s a failure of policy. We make it easier and more profitable to grow corn for fuel than to raise beef or vegetables for food. That’s not national security — that’s national vulnerability.”

“Let’s quit lying to ourselves. We don’t feed the world anymore — the world is beginning to feed us.”— Joe Maxwell, Farm Action

The Growing Grip of Consolidation

Maxwell points to consolidation as the most dangerous — and least understood — threat facing independent producers. From fertilizer and seed to meatpacking and grocery shelves, he says control has concentrated into the hands of just a few corporations.

“The power dynamic in agriculture has flipped,” Maxwell explains. “Farmers used to have leverage. Now, a handful of companies control nearly every input we need to farm — and they set the prices we pay. Then they control the markets we sell into, and they set those prices, too. That’s not a free market — that’s corporate feudalism.”

He points to Farm Action’s Concentration Tracker, a public data hub that compiles market share information across the food system. It shows that:

Four companies control over 80% of beef processing.
Two companies dominate more than 75% of corn seed genetics.
Three firms hold the majority of fertilizer production capacity.
The top five grocery chains now capture nearly 65% of all food retail sales.

“When just a few players hold that kind of power, they don’t compete — they coordinate,” Maxwell says. “They can raise input costs and suppress farmgate prices, and farmers have no real alternative. That’s why our concentration tracker matters — it exposes what’s really happening behind the curtain.”

The problem, he says, isn’t just economic — it’s political.

“These corporations have so much money and influence they shape farm policy to fit their own balance sheets,” Maxwell adds. “When we go to Washington asking for help, they’re already there, writing the rules. Until we restore fair competition and transparency, every bailout, every policy tweak is just feeding the beast.”

Farm Action’s data shows concentration doesn’t just hurt farmers — it hurts consumers, too. From fertilizer to feed to food, fewer companies mean higher costs for everyone.

“You see it every time you go to the grocery store,” Maxwell says. “Beef prices are high, but cattlemen aren’t seeing that profit. Fertilizer prices spike, but farmers don’t control the market. Consumers pay more, farmers earn less, and the middle consolidates the wealth. That’s not sustainable for anybody.”

It’s a concept gaining national traction. Just this week, the Senate Judiciary Committee held a hearing on the soaring costs of inputs.

Sen. Charles Grassley (R-Iowa) also introduced legislation to address the rising costs of inputs, called the Fertilizer Research Act . But the hearing brought together the larger issue of rising costs across the board for farmers.

“This hearing is focused on competition issues. However, there is something that the Trump administration can do right now to help ease the burden for farmers: lowering the countervailing duties on phosphate from Morocco. In 2024, the Biden administration increased duties on Moroccan phosphate to 18%,” said Grassley in his opening statement. “The Biden phosphate duties have only hurt farmers by boxing out access to this important market on an essential input with no substitute. I’m calling on the Trump administration to help American farmers and get rid of the Biden phosphate duties.”

The Beef Debate: “We’re Blindsided”

For ranchers, the issue of consolidation has long been a point of contention. But recent comments by President Trump sparked a renewed push for change and a probe into who and what really controls the prices consumers are paying.

When the White House signaled it will allow more beef imports from Argentina , Maxwell says many ranchers feel blindsided.

“Our cattle herd is at a 70-year low,” he says. “Ranchers finally see light at the end of the tunnel — and then Washington steps in to import more beef. That’s not just a policy mistake, it’s a psychological one.”

He argues that the frustration isn’t only about imports; it’s about the perception that the administration doesn’t understand the complexity of the cattle market.

“Cattle producers don’t set the price they’re paid — packers do,” Maxwell explains. “So when the president talks about lowering prices for consumers without addressing packer control, he’s aiming at the wrong target.”

“We’re finally seeing the light of day. Then government puts its hand back on our backs.”— Joe Maxwell on the U.S. cattle market

“It’s Time for DOJ to Step In”: Why the Beef Industry Needs an Investigation

He says instead of the Trump administration focusing on cattle prices, Farm Action thinks what happened in the egg industry during past price spikes is exactly what needs to happen now in beef: a full federal investigation.

“Two companies control 90% of hatcheries in the U.S. egg industry,” Maxwell explains. “When egg prices exploded, Farm Action presented evidence to the Department of Justice showing that those companies were profiting at historic levels while blaming avian flu. And you know what happened? DOJ opened an investigation. That’s what accountability looks like.”

Now, he says, the same pattern is playing out in beef.

“We’ve already seen price-fixing cases in the cattle sector,” he says. “Two of the major packers admitted it back in 2019. We shouldn’t have to spend years in court to prove what every rancher already knows — that a handful of companies are manipulating the market.”

The so-called “Big Four” — Tyson Foods, JBS, Cargill, and National Beef (controlled by Brazil-based Marfrig) — control roughly 85% of U.S. beef processing capacity. That concentration, Maxwell argues, allows them to influence both the price paid to producers and the price charged to consumers.

“It’s an abusive system,” Maxwell says. “They squeeze ranchers on one end and shoppers on the other, and everyone in between gets caught in the middle. The packers are the only ones guaranteed to make money, no matter what happens to the market.”

He calls for the Department of Justice to launch a new, comprehensive investigation into price manipulation and anti-competitive behavior within the beef industry — similar to what Farm Action pushed for with eggs.

“We need DOJ to do in beef what it finally did in eggs,” he says. “Follow the money, follow the profits, and hold these corporations accountable. Because right now, the people who produce our beef — the ranchers who’ve weathered drought, inflation, and decades of consolidation — are getting crushed while multinational packers report record margins.”

Maxwell says the Biden administration has taken small steps, but much more needs to be done.

“It’s not enough to tinker at the edges,” he warns. “We need enforcement — real enforcement — of the Packers and Stockyards Act, the Sherman Act, the Clayton Act. The laws are already on the books. What’s missing is the will to use them.”

Country-of-Origin Labeling: A “No-Brainer”

Maxwell says Farm Action is pushing hard for mandatory Country of Origin Labeling (M-COOL) as part of the upcoming USMCA review in 2026.

“Consumers deserve to know where their beef comes from,” he insists. “The president could fix this tomorrow by negotiating M-COOL into the trade deal. That one move would give American ranchers a fair shot.”

He dismisses claims that M-COOL violates WTO rules.

“WTO is dead in the water,” Maxwell argues. “There’s no functioning tribunal to even hear a case. The only people fighting this are the packers — JBS, Tyson, Cargill, Marfrig — because they profit when foreign beef gets a U.S. label.”

Structural Change, Not Another Bailout
When asked whether Farm Action supports another round of USDA bailouts for struggling producers, Maxwell doesn’t hesitate.

“We recognize farmers are in crisis,” he says. “We don’t want to see our neighbors driven off the farm. But we can’t just keep sending out checks without fixing the system. One day those bailouts won’t come, and then it’ll look just like the 1980s. We have to demand structural change.”

Those changes, he says, should include:

Capping farm subsidies to slow consolidation.
Rebalancing insurance and incentive programs toward food production.
Rebuilding local and regional processing capacity to compete with the “Big Four” packers who control 80–85% of the cattle market.
Stronger enforcement of antitrust laws like the Packers and Stockyards Act and the Sherman Act.

Rebuilding from the Ground Up

Despite his criticism, Maxwell frames his message as one of hope — if farmers and ranchers take the lead.

“We can’t sit back and wait for Washington to fix this,” he says. “We have to step up, be part of the conversation, and demand policies that keep family farms in business.”

He supports Rep. Thomas Massie’s Prime Act, which would expand small-scale meat processing and let states regulate local slaughterhouses directly.

“We’ve got the infrastructure,” Maxwell adds. “We just need to give it life again. Let’s rebuild local processing so farmers can sell directly to consumers and keep value in their communities.”

Why It Matters Now

Fresh data from the Farm Journal Ag Economists’ Monthly Monitor shows that 76% of agricultural economists expect conditions to persist or worsen over the next year. Many see echoes of the 1980s — though they warn today’s crisis is more complex.

“It’s not the 1980s all over again,” says Unscripted host Tyne Morgan. “But the pain is real. Economists say the situation could worsen in 2026 if structural issues aren’t addressed. That’s what makes conversations like this so important.”

A Call to Action

As the conversation wraps up, Maxwell’s tone shifts from urgency to determination. His message to rural America is both a warning and an invitation.

“We have to lead,” he says, pausing before adding, “because no one else is going to do it for us.”

He says the future of U.S. agriculture depends on whether farmers choose to engage in these hard conversations — the ones about fairness, policy, and the future of independent family farms.

“Look, we can’t afford to sit on the sidelines and hope someone in Washington suddenly understands our way of life,” Maxwell says. “Every farmer, every rancher, every person who believes in feeding people instead of feeding systems has a role to play. It starts at the local level — showing up, speaking up, refusing to accept that the current model is the only way forward.”He continues:

“This isn’t about right or left, or about politics at all. It’s about survival — for the people who feed this country. We can’t keep patching the same broken system and expecting it to serve us. If we want a food system that’s fair, resilient, and rooted in our rural communities, we’ve got to build it ourselves, together. That’s the hard truth — and the hopeful one.”

Maxwell’s words linger long after the conversation ends — a challenge, but also a call for courage. Change, he insists, isn’t something that happens to farmers. It’s something that must happen through them.

Listen to the Full Conversation

Listen to the full interview: “Unscripted” with Tyne Morgan and Clinton Griffiths featuring Joe Maxwell, a vailable on Farm Journal’s YouTube channel and anywhere you stream podcasts.

From Setback to Comeback: Sorghum Looks For More Market Opportunity

Tue, 07 Oct 2025 17:58:52 GMT

2025 has been a year of extremes for U.S. row-crop farmers, including grain sorghum producers. Many will harvest one of their best crops in recent memory – often referred to as milo – while they simultaneously endure some of the worst export markets agriculture has seen in the last four decades.

“There’s a lot of commodities that are hurting, I won’t deny that. But the loss of the Chinese market and any significant trade opportunities is more severe for sorghum than any other commodity,” contends Amy France, chair of the National Sorghum Producers (NSP).

That’s not rhetoric but reality for sorghum growers.

China historically purchased up to 90% of all U.S. sorghum exports. Those sales ceased in April, on the heels of tariffs and retaliatory tariffs. The remaining 10% of U.S. exported sorghum went to Africa to combat hunger. That market closed in January, when the Trump administration abruptly canceled the Food For Peace program.

Prices for the nutrient-rich grain dropped precipitously. Bids have been as low as $2.35 in key sorghum states, according to John Duff, founder of Serō Ag Strategies and a consultant to NSP.

For over a decade, China has been the No. 1 export market for U.S. grain sorghum. Countries in east Africa have been a distant second, while Mexico has been third. The National Sorghum Producers sees tremendous potential for trade with India. While the road forward will require patience it’s promising, as India became a net importer of coarse grains for the first time in modern history just last year.

(USDA)

Laser Focused On Opportunity
France is on a mission to move sorghum’s story from one of recent struggle to success. She’s working to identify new opportunities, expand upon those that exist domestically – such as with ethanol and gluten-free foods – and spur legislators to restore trade with China and other countries.

“We want trade first and foremost, but if we’re going to keep going with [these tariffs], then our farmers are going to need some help,” says France, who started her second term as NSP chair on Oct. 1.

The following week, in the midst of the federal government shutdown, France saw an opportunity for connection with legislators when others might have expected only closed doors. She flew to Washington, while NSP staff made calls to set up meetings with senators and representatives from the sorghum belt, which runs from South Dakota to South Texas, and includes Kansas, Nebraska, Oklahoma, and Colorado.

“I want to ensure our producers and the next generation can continue to farm, and that equates to what we are doing on the Hill,” she explains.

A Fresh Perspective
France took a unique path to the leadership role for the NSP. The daughter of two music educators, she embraced agriculture when she met her husband, Clint, 25-plus years ago. They farm, along with their five children, near Scott City, Kan., growing corn, sorghum, wheat and black Angus cattle.

Through their local Farm Bureau, France recognized her passion for creating opportunity via agriculture policy.

“I always say Farm Bureau opened the door for me. I just got involved on the county level and then kept going. I’m not afraid to ask tough questions and dig deeper,” she says.

Some of France’s tenacity was inspired by her late father-in-law, Leon, who told her grain sorghum kept him from losing the family farm in the 1980s.

“He told me, when I went onto the board, it was the only crop he could afford to put in the ground, because it didn’t have as much input costs as other commodities, and he would reap a good harvest,” she recalls.

France keeps their conversation in mind as she works to build a better future for sorghum and the farmers who grow it.

“In navigating the current farm economy, I think about what crop can farmers afford to put in the ground and still reap a harvest? I believe sorghum is that for a lot of farmers,” she says.

“We have the best product – far and above better than what any other country can grow,” she adds. “We just need markets, and that’s what is top of mind for me.”

Your next read: New Seed Treatment Offers A Solution to Soybean Cyst Nematode

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

Mon, 24 Mar 2025 21:14:17 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

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 18:09:21 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 00:07:53 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 21:14:26 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:

Your Next Read: D.C. Insider Jim Weisemeyer Explains How Trump’s Return Could Shape Ag’s Future

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

Thu, 02 Jan 2025 20:11:15 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 16:36:16 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

CoBank: Policy Will Shape Rural Economy In The Year Ahead

Thu, 12 Dec 2024 23:31:07 GMT

CoBank has released its 2025 outlook report , which outlines the key themes the organization expects to shape agriculture and the rural economy in the coming year. While there are several factors to watch, they mainly stem from one place: federal policy.

“The environment we enter in 2025 hasn’t fully defined itself yet, but many of the policies proposed by the incoming administration would likely have a negative impact on U.S. agriculture,” said Rob Fox, director of CoBank’s Knowledge Exchange. “Open access to export markets and labor availability are critically important for agricultural producers and processors. Depending on how policy plays out, those two areas could be big challenges in 2025 and beyond.”

As a new economic era begins, here are the six main forces at play:

Threat of A Trade War
A large focus of President-elect Trump’s campaign was on significant import tariffs. While we don’t know exactly what this policy would look like, it is unlikely to produce a positive outcome for crop or livestock producers.

Fox writes, “These policies could achieve some limited objectives, but it is very hard to paint them as anything but negative for the U.S. farm economy.”

If a trade war was to ensue, it could also be very costly for agriculture. A recent joint study by the national corn and soybean associations estimates the 2018-19 trade war with China cost the U.S. a total of $27 billion in agricultural sales to China over those two years.

Export Competition
Alongside the potential for a trade war, export competition from Russia and South America poses another treat.

According to the report, Russia’s currency is weakening - which is expected to anchor global wheat prices and allow Russia’s wheat to be more competitive.

At the same time, Brazil’s currency is also weakening and exports from the country will be cheaper than those from the U.S. This is coupled with the forecast of record South American corn and soybean crops.

With an abundance of soybeans globally, CoBank is anticipating many U.S. acres to shift from soybeans to corn this year as well.

Labor Challenges
Another likely outcome of the upcoming Trump administration is a decreased labor supply.

The president-elect has proposed deportation and reduced immigration, which could negatively impact the dairy, meatpacking and produce industries by causing labor shortages and driving up costs.

Livestock Sector Investment and Growth
It’s not all bad news for the dairy industry, though. According to the report, the U.S. will see an unprecedented $8 billion in new dairy processing investment through 2026 - and some of those plants will come online in 2025.

The livestock sector as a whole is benefiting from low feed costs, and specifically in the beef industry, a reduced herd size is supporting higher feeder and fed cattle values.

The USDA Economic Research Service projects per capita consumption of chicken, beef, pork and turkey to remain stable or grow up to 2% from 2024 to 2025.

It’s important to note, however, there could be retaliation from potential tariffs placed on major dairy export customers such as Mexico and China.

Tight Margins
Reduced income and tighter margins for the crop industry are expected to continue in 2025.

CoBank anticipates input decisions being driven largely by what provides the greatest return on investment, and farmers may look to switch chemicals to generics.

During this time, it will be critical for ag retailers to provide tailored agronomic advice and technical assistance.

Biofuel Uncertainty
On the biofuel front, headwinds are expected to continue into 2025 - with the Trump administration adding more regulatory uncertainty.

Projections of note include:

A modest increase in biofuel production next year, although ethanol supplies will maintain 2024 production levels of 1.05 million barrels per day, according to the Energy Information Administration.
Renewable diesel production capacity will grow just 100 million gallons from 2024 to 2025 to a total of 5.2 billion and remain steady through 2026, according to an updated analysis from University of Illinois.
Federal and state tax incentives and low carbon fuel policies will drive the future viability of sustainable aviation fuel.

To read the full report from CoBank, click here .

U.S. Agriculture Faces Growing Trade Deficit, USDA Projects a Record Ag Trade Deficit in 2024

Wed, 09 Oct 2024 20:34:04 GMT

U.S. agricultural exports were at $13.01 billion in August, essentially unchanged from July, against imports of $17.19 billion, which were down 2% from July, resulting in a monthly trade deficit of $4.18 billion.

So far in fiscal year (FY) 2024, exports total $161.3 billion compared to imports of $188.82 billion, creating a cumulative deficit of $27.52 billion. The sector has recorded monthly deficits in 10 out of 11 months in FY 2024, with three months seeing deficits of $4 billion or more and eight months with a deficit of $1 billion or more.

USDA forecasts agricultural exports at $173.5 billion and imports at a record $204 billion for a projected record trade deficit of $30.5 billion.
In FY 2023, the trade gap was $17.1 billion. Based on the FY 2024 forecasts and cumulative trade data, agricultural exports in September would need to reach $12.2 billion to meet the USDA forecast, while imports would need to be $15.18 billion. Historically, the value of imports has declined in September compared to August over the past three years, while the value of exports fell in two of the last three years, with September 2023 being an exception.

Since U.S. agricultural exports peaked at $196.1 billion in FY 2022, they have dropped by 11.5%. USDA’s forecast for exports of $169.5 billion in FY 2025, if accurate, would represent a 15.4% decline in the value of shipments since FY 2022. Meanwhile, imports have consistently set records in recent years, and in FY 2025, they are expected to rise to $212 billion, nearly 4% higher than FY 2024 forecasts.

This trend continues to fuel concerns in U.S. agriculture, particularly over the lack of new free trade agreements (FTAs) pursued by the Biden administration. FTAs are typically aimed at removing tariff barriers for U.S. agricultural products, which can significantly boost market access for American farmers.

Administration Touts Strides in Beefing Up Ag Trade

Just last week the U.S. Trade Representative’s Office and USDA reported the administration has made significant strides in expanding market access and boosting agricultural exports.

The agencies reported the four-year average of U.S. ag exports is 28.5% higher compared to the previous four years. It says the administration has secured more than $26 billion in ag market access globally. The agencies also added that the peak was reached in 2022 with a record of $196 billion in ag export values.

Officials cited the momentum from several key initiatives, including the “Regional Agricultural Promotion Program” and the
Assisting Specialty Crop Exports Initiative,” along with trade relationship improvements with India,
Colombia and gaining access for U.S. fresh potatoes to Mexico.

Washington watchers say some of the increase in export value may also be attributed to higher prices rather than only increased volumes, pointing the to record ag trade deficit on the books today.

New Report Reveals Ag Isn't On Track To Meet Rising Demand

Wed, 09 Oct 2024 18:43:36 GMT

Virginia Tech’s College of Agriculture and Life Sciences recently released its 2024 Global Agricultural Productivity (GAP) report , showing global agriculture productivity is falling behind the curve.

“Global agricultural productivity growth has slowed from 1.9% annually during 2001-2010 to 0.7% annually during 2013-2022,” said Tom Thompson, the report’s executive editor, associate dean of the College of Agriculture and Life Sciences, and director of CALS Global at Virginia Tech. “This dramatic slowdown will prevent us from reaching our agricultural production and sustainability goals by 2050, with potentially dire impacts on food and nutrition security, unless we reverse this trend.”

Agricultural productivity growth during this period was even lower in the U.S. – averaging 0.21% annually. The report’s authors attribute this in part to the lack of public funding in agricultural research and development. At the same time, South Asia led progress at 1.4%.

“South Asia’s TFP growth highlights the critical role of innovation and investment,” said Tabila Nakelse, the report’s research lead. “Achieving sustainable productivity growth requires bridging the gap between research and widespread adoption. This lesson is vital for all regions seeking to overcome challenges and boost agricultural efficiency.”

Global total factor productivity should be at 1.91% annually to meet the demand projected in 2050, according to the report. But due to current productivity being so far below that level, it may actually need to rise to 2%.

“Tackling agricultural productivity growth will require cooperation across political and philosophical lines throughout the food system,” said Jessica Agnew, associate director of CALS Global and the report’s managing editor. “Using our resources wisely and most efficiently is applicable to every farmer, in every farming system, at every scale of production.”

Some of the risks of not ramping up growth include:

Reduced competitiveness in global agricultural markets
Deterred investment in the agricultural sector
Increased inequalities, particularly for smaller farms and rural communities
Limited ability to adapt to climate change
Higher food prices
Overuse of inputs or natural resources

5 Recommended Priorities To Help Bridge The Gap
In order to meet these growth goals, the report emphasizes the importance of closing the disconnect between the development of new innovations and their delivery to producers, something the authors call “the valley of death”.

It outlines five main priorities to help solve this issue and drive agricultural productivity growth:

Invest in agricultural innovation systems, including the infrastructure, human capital and skills development, financial systems, partnerships, socio-cultural considerations and environmental conditions required for producers at all scales of production.
Expand market access so all levels of producers can access competitive input and output markets to make informed decisions.
Strengthen regional and global trade.
Reduce food loss and improve output quality as climate, pest, disease and resource challenges intensify.
Cultivate partnerships to accelerate the development and dissemination of technologies, practices, and knowledge.

China's Exports Surge Amid Weak Domestic Economy, Raising Global Concerns

Thu, 12 Sep 2024 15:30:14 GMT

China’s soybean imports reached a record high in August 2024, reflecting significant growth in the country’s demand for the oilseed, but meat imports declined.

China’s overall exports surged in the wake of a weakening domestic economy. However, the ag trade picture is mixed. While China is importing a record amount of soybeans, meat imports have seen a rapid decline.

In August, China’s exports surged by nearly 9%, reaching $309 billion, the highest since September 2022, while imports remained stagnant at 0.5%. The strong export growth provided a rare boost to China’s economy, which has been struggling with deflation and a housing slump. The trade surplus for the month was $91 billion.

Despite the positive export figures, the influx of cheaper Chinese goods has sparked concerns in the U.S., South America, and Europe, leading to tariffs on certain products like electric cars and steel. With exports to almost every market growing — particularly to the EU, India, and Brazil — questions remain about the sustainability of China’s growth strategy as global trade tensions rise. Analysts warn that China’s weak domestic demand, coupled with global economic uncertainty, poses risks to its overall economic recovery.

China’s strong export pace

(Bloomberg)

Taiwan’s exports reached a record $43.6 billion in August, driven by surging demand for semiconductor equipment fueled by the artificial intelligence boom. Exports to the U.S. rose 79% to a record $11.9 billion, surpassing shipments to China and highlighting a significant shift in Asian supply chains. Taiwan’s finance ministry expects exports to continue growing in the second half of the year, supported by the peak export season and ongoing AI-related demand.

China’s Soybean Imports Reach Record Levels

China’s soybean imports reached a record high in August 2024, reflecting significant growth in the country’s demand for the oilseed. China imported a record 12.14 million metric tons (MMT) of soybeans in August 2024. This represents a substantial increase of 29% compared to August 2023, when imports totaled 9.43 MMT.

Several factors contributed to this record-breaking import volume:

• Lower prices. Traders took advantage of lower soybean prices in the global market to stock up on supplies.
• Potential tariffs. Concerns about possible tariffs that could be implemented if former President Donald Trump wins the November election may have prompted increased imports.
• Customs clearance:.Ships that had been held up were cleared by customs, contributing to the higher import figures.

For the period of January to August 2024, China’s soybean imports reached 70.48 MMT, marking a 2.8% increase compared to the same period in the previous year.

USDA forecasts China’s soybean imports for the 2024-25 marketing year to reach 103 million metric tons. Increased soybean meal inclusion rates in animal feed, stable demand in the poultry sector, and growing demand in aquaculture are expected to support imports. But weaker demand in the swine sector due to declining production may partially offset the growth in other areas.

Chinese Meat Imports Decline

Chinese meat imports have declined significantly compared to previous years. Through the first eight months of 2024, China imported 4.40 million metric tons (MMT) of meat products, down 13.9% from the same period in 2023. In August 2024, China imported 565,000 MT of meat, which was 9.9% lower than August 2023. Beef imports have been particularly affected, with volumes down 27% year-over-year in July 2024.

Several factors are contributing to lower Chinese meat imports in 2024:

• Economic headwinds are impacting consumption of both pork and beef.
• China has ample domestic meat supplies after building up stocks in 2023.
• Pork production in China remains high, reducing import needs.
• Chinese consumers are seeking cheaper protein options due to economic slowdown.
• Import bans on some U.S. meat facilities have restricted supply.

Pork
• Pork imports may grow marginally to offset a forecasted 3% decline in domestic production.
• China’s pork output fell 0.4% year-over-year in Q1 2024, the first quarterly decline in nearly 4 years.

Beef
• Beef imports are expected to decline in 2024 due to high year-end inventory and flat demand.
• China’s share of global beef imports is forecast to be 5% below 2023 levels.

Poultry
• Poultry meat imports accounted for $282 million in July 2024, resulting in a negative trade balance.

Impact on global trade:
• The U.S. has seen a fall in meat exports as China scales back imports.
• Brazil has increased beef exports to China, up 10.2% in the first half of 2024.
• Australia has shifted more beef exports to the U.S. and Japan as Chinese demand weakens.

Bottom Line

While there have been some month-to-month fluctuations, overall Chinese meat imports remain well below 2023 levels as domestic production remains high and economic factors dampen demand. This has led to shifts in global meat trade flows, with exporters like the U.S., Brazil and Australia adjusting to changing Chinese import patterns.

In First Forecast for FY 2025, USDA Projects A Bulging Ag Trade Deficit to Top $42 Billion

Thu, 12 Sep 2024 15:30:04 GMT

The U.S. agricultural trade deficit is expected to continue growing in fiscal year (FY) 2025, with significant implications for the agricultural sector. USDA provided forecasts indicating that agricultural exports are projected to decrease, while imports are expected to rise, leading to a widening trade deficit.

USDA Raises FY 2024 Forecasts by $3 Billion

USDA raised its forecast for agricultural exports by $3 billion to $173.5 billion, largely due to increased exports of horticultural and grain products.

However, agricultural imports are also expected to increase by $1.5 billion, reaching $204 billion. This results in a projected trade deficit of $30.5 billion, which is a slight improvement from the $32 billion deficit projected earlier in May.

For FY 2024, U.S. ethanol exports are now seen at a record $4.3 billion, an increase of $800 million over the previous year and $400 million higher than the previous record set in FY 2022. USDA said the volume is seen at 1.9 billion gallons with U.S. ethanol “generally more price competitive with Brazilian product, helping to boost global U.S. sales.” But there are essentially no shipments to Brazil due to the 18% import duty. The U.S. supplies all of Canada’s imports with that country being the world’s top ethanol importer.

Canada is still expected to be the top U.S. agricultural export destination in FY 2024 at $29.3 billion with Mexico in the number two spot at $28.9 billion, with China in third at $27.0 billion.

USDA’s FY 2025 Projections

Looking ahead to FY 2025, which begins on October 1, 2024, USDA forecasts a decline in agricultural exports by $4 billion, bringing the total to $169.5 billion. This decline is primarily attributed to lower unit values of key commodities such as soybeans, corn, and cotton, as well as reduced volumes of beef exports. The decrease in exports to China, projected at $24 billion, is particularly notable and is driven by reduced import demand, strong international competition, and lower unit values of U.S. exports.

On the import side, agricultural imports are expected to reach a record $212 billion, up $8 billion from the revised figure for FY 2024. This increase is largely due to rising imports of horticultural products, sugar, and tropical products.

USDA’s initial outlook for FY 2025 anticipates a record agricultural trade deficit of $42.5 billion, up $12 billion from the current fiscal year. This trend reflects ongoing challenges in the U.S. agricultural trade landscape, including strong competition from international markets, fluctuating commodity prices, and changes in global demand patterns.

A factor in the FY 2025 export outlook is the value of the U.S. dollar which USDA expects will increase another 0.8% in calendar 2025 after a 2.2% rise in 2024.

“Labor talks at U.S. ports on the East Coast and Gulf of Mexico are another risk for shippers already grappling with longer transit times and higher costs,” USDA noted.
For FY 2025, Canada retains the top spot with forecast exports at $29.2 billion while exports to Mexico are seen holding at $28.9 billion but China is seen falling to $24.0 billion, still holding down the third spot. “Uncertainty still looms as China’s economy shifts from growth based, mainly on production and exports, to domestic demand with slowing population growth leading to reduced production capacity,” USDA noted.

Bottom Line

With these forecasts, concerns will increase about the outlook for the U.S. ag sector, with the updated U.S. farm income forecast due Sept. 5. It will also continue to generate criticism of the Biden/Harris administration’s lack of new free trade agreements. USDA has introduced the $1.2 billion Regional Agricultural Promotion Program (RAPP) to support and diversify U.S. ag exports, particularly targeting markets beyond the top buyers. While the program aims to expand export markets, its impact on reversing the current export slump remains uncertain in the short- to medium-term.

Your Next Read: More Than 50% of Ag Economists Now Think the U.S. Ag Economy is Already In a Recession

More Than 50% of Ag Economists Now Think the U.S. Ag Economy is Already In a Recession

Tue, 27 Aug 2024 17:48:46 GMT

U.S. corn prices hit a four-year low as the prospect for record corn and soybean crops takes shape in the field. The eroding outlook also appeared in the August Ag Economists’ Monthly Monitor as more economists are concerned U.S. agriculture is either already in a recession or on the brink of one, but economists point out if it weren’t for strong cattle prices, the ag economic picture would look even worse.

“When you look at, what we said for both, relative to last month or last year, some of the most pessimistic readings we’ve had, since we’ve been surveying here on 2024,” said Scott Brown, interim director, Rural and Farm Finance Policy Analysis Center (RaFF), University of Missouri who also helps author the Monthly Monitor each month.

August Ag Economists’ Monthly Monitor

(Lindsey Pound)

The latest Ag Economists’ Monthly Monitor tried to get a better gauge of the risk of financial stress in agriculture, and asked the more than 70 economists surveyed if agriculture is on the brink of a recession. Nearly 60% said “yes.”

“Maybe what was even more surprising to me is the responses to the question, ‘Are we already in a recession?’ More than 50% said ‘yes, we’re already in a recession.’ That’s a big change from where we were just 16 to 24 months ago, and it shows a lot of folks are worried about where we sit today.”

The Monthly Monitor also asked economists to provide more explanation of why they think the U.S. ag economy is already in a recession. Economists said:

“At least for most crop producers, the sharp drop in prices and cash receipts has resulted in lower net income and financial pressure on leveraged producers. The picture is generally less dire on the animal agriculture side of the ledger, as prices are up (cattle, milk) for some commodities and feed costs are declining.”
“I do think the U.S. ag economy is in a recession. The projection for 2023 and 2024 farm incomes in real dollars are the two largest declines in history. Costs exceed prices for most commodities. And the outlook doesn’t provide indication of improvement soon.”
“Farm incomes are down. Ag manufacturers are laying people off. Suppliers for those manufacturers are laying people off. What are the bright spots? Cattle, depending on the segment? Trade with Mexico? After that, the list gets pretty thin.”
“We aren’t in one yet, but we are on the brink of one.”
I think we’ll enter into a recession after the election.”

Cattle Are Helping the Overall Ag Economic Picture
As the concerns about the ag economy pour in, Brown points out the net farm income situation would look even worse if it weren’t for more positive prices in livestock.

“Cattle prices, I think, have been helpful in pulling it up. At the same time, we see corn and soybean prices continue to move lower,” Brown says. “We know crop receipts are going to be lower than what they would have said back at the start of the year, cattle probably higher, hogs probably higher and dairy probably higher. But economists also expect production expenses to not go up from where they were originally during the first part of the year.”

Net Farm Income Could Fall Further
U.S. Department of Agriculture’s (USDA) Economic Research Service (ERS) gave its first glimpse at 2024 Net Farm Income in February with the Farm Sector Income & Finances: Farm Sector Income Forecast. At that time, USDA ERS’ forecast showed net farm income to fall after reaching record highs in 2022.

USDA ERS’ forecasts showed:

· Net farm income, which is a broad measure of profits, reached $185.5 billion in calendar year 2022 in nominal dollars.
· After decreasing by $29.7 billion (16.0%) from 2022 to a forecast $155.9 billion in 2023, net farm income in 2024 is forecast to decrease further from the 2023 level by $39.8 billion (25.5%) to $116.1 billion .
· Net cash farm income reached $202.3 billion in 2022. After decreasing by $41.8 billion (20.7%) from 2022 to a forecast $160.4 billion in 2023, net cash farm income is forecast to decrease by $38.7 billion (24.1%) to $121.7 billion in 2024.

USDA is set to revise its 2024 Net Farm Income forecast in September.

(Lindsey Pound)

ERS will provide an updated 2024 forecast in September. Even with improvements in livestock margins, the August Ag Economists’ Monthly Monitor showed the majority of ag economists expect the further deterioration in crop prices to weigh on the overall net farm income picture and force the agency to revise their forecast lower.

· Nearly 57% expect USDA to revise its forecast
· 36% think the revision will be 5% to 10% lower
· 7% think USDA will leave its forecast unchanged from February.

What Will Impact Crop Prices Over Next 6 Months
The August Monthly Monitor also asked economists to outline what will impact crop prices over the next six months. Economists said:

Growing crop size and limited exports
Bioenergy and feed demand
South America’s weather and crop size, specifically the second crop final production numbers and plantings for the first crop
Potential for new tariffs and relations with China
Fertilizer prices and the impact on 2025 acreage.

What Will Impact Cattle Prices Over Next 6 Months
With a more bullish outlook for cattle, the August survey asked economists what will impact cattle prices over the next six months.

Weaker demand
Lower corn prices
Possibility of tighter cattle numbers

“I think the supply fundamentals are essentially unchanged since this spring. The big question is demand. If we have an economy-wide recession, what happens to beef demand,” responded one economist in the anonymous monthly survey.

What to Watch
From geopolitics to the evolving situation in supply and demand across all commodities, the Monthly Monitor asked economists to outline the factors not being covered enough in the media.

“Deterioration in liquidity.”
“Growing gap between the situation for crop and livestock producers.”
“Impact of a Trump vs. Harris win and misconceptions around who is better for the farm economy.”
“Continued high cost for many ag inputs.”
“I’m frustrated by the continued pressure on U.S. farmers to be more sustainable which often results in higher farm costs and could lead to more regulation or hoops to jump through or reduced production. At the same time, South American producers continue to rapidly expand production in a less sustainable way. I’m also concerned that this will lead to vertical integration in crop farming.”
“The cataclysmic risk of rising tariffs.”
“Will congress set in to support farm incomes at these levels? ARC/PLC are ineffective at this point. Ad hoc spending has been rampant.”
“Inflation.”
“Possible government farm program payments this fall (last year’s crop year).”
“Fund manager use of Algo computers.”

Your Next Read: The Ugly Truth: 2023 and 2024 Will Go Down As the Two Largest Declines in Net Farm Income Ever

Ag Economists Weigh In On the Biggest Opportunities for the Ag Economy in the Months Ahead

Tue, 02 Jul 2024 13:10:31 GMT

Ag economists are growing more negative regarding the financial health of the crops sector of agriculture, but their views on livestock is becoming more positive. The latest Ag Economists’ Monthly Monitor , a survey of nearly 70 ag economists from across the U.S., shows the lack of exports, as well as the current crop prices, are eroding outlooks on the crops side. While strong beef demand and cheaper feed prices are creating more optimism in cattle.

The June Ag Economists’ Monthly Monitor, which is a joint survey between the University of Missouri and Farm Journal, continues to track the volatility in ag economists’ views of not only what’s impacting agriculture today, but what to watch on the horizon. The June survey marked the one-year anniversary for the monthly survey, and it showed the risks to agriculture remain a major concern.

Even though economists’ views on the ag economy eroded slightly in June, their projection for net farm income in 2024 actually increased to $113.9 billion, which is up from the $110 billion in projected by economists in May.

Ag economists’ project a slight increase in net farm income, compared to the previous month. The June projection rose to $113.9 billion, up from the $110 billion in May.

(Lindsey Pound)

Weighing in on the Most Negative and Positive Aspects of the Ag Economy

When asked what economists view as the most negative aspect of their outlook of the ag economy, economists said:

Crop output prices retreating more rapidly than input costs
Commodity prices below economic break-even production costs
Export outlook from the U.S., specifically the lack of Chinese demand
U.S. trade policy regardless of party affiliation with more international trade competition
Constant challenges to demand and policy that adds barriers to existing and potential new demand streams

“Some farmers made production and investment decisions assuming that earlier wider margins would persist,” noted one economist.

While the negativity seems to outweigh the positives of the ag economy right now, the June Ag Economists’’ Monthly Monitor also asked economist to weigh in on the most positive aspect regarding the outlook of U.S. agriculture. Economists said:

Over the next couple of years, cow-calf operators should have good profitability, especially in areas of the country with good forage conditions
Adverse world weather boosting U.S. exports
The possibility of good yields that will help farmers hit their financial goals
Discipline by producers to keep acreage expansion in check and U.S. prices being more competitive in the global market.
Farmers eager to make adaptations necessary to stay in business

“There are some really bright producers that are positioned for some quick growth in the next 5 to pp10 years,” said one economist in the anonymous survey. “They will be positioned to buy farmland as older producers transition.”

Ag economy outlook in the June Ag Economists’ Monthly Monitor.

(Lindsey Pound)

The outlook for the U.S. production picture is anybody’s guess right now, but Scott Brown, interim director, Rural and Farm Finance Policy Analysis Center (RaFF), University of Missouri who helps author the Monthly Monitor, says weather continues to be one of the biggest variables in what happens with commodity prices in the months ahead.

“Number one, at the top of the list of almost all of these commodities, of course, is weather,” says Brown. “I think some are seeing some demand weakness as a big factor with soybean prices in particular, and seeing some other vegetable oil substitutes entering the picture. What’s maybe even a bigger factor on the soybean side is Brazilian supplies. A strong dollar continues to be important, in terms of our ability to move product out of the United States.”

Brown says one prime example of this is with cotton where the lack of Chinese trade has had an impact on prices.

“As we look at this month’s Monitor, and when you look at the survey results that comes through with almost all of these commodities with the exception of cattle, survey respondents are saying we’re slightly more pessimistic this month than we were last month,” Brown adds.

The June Ag Economists’ Monthly Monitor showed economists think the following factors will have the biggest impact on the outlook for corn prices:

U.S. and world weather
Better precipitation across the Corn Belt compared to the previous growing season
Growing end stocks continuing to a burden on prices

As for soybeans, economists say U.S. and world weather will also play a significant role in the direction of soybean prices, but other factors that are impacting outlooks on soybean prices include:

Demand is soft and imports of cheaper vegetable oil substitutes is creating more competition
Biofuel and sustainable aviation fuel (SAF) developments will have a bigger impact on prices in the months and years ahead
Expectation for larger soybean supplies in Brazil
Strong U.S. Dollar

The bright spot in the ag economy continues to be cattle prices. According to ag economists, the outlook for prices in the months ahead really hinges on three main factors:

If record beef demand can continue
Growing crop supplies creating lower feed costs
Strong U.S. Dollar

“It‘s hard to keep suggesting higher prices when we’re already at record levels, but when you look at where we’re at in terms of cattle inventory, we’re only going to get tighter,” says Brown. “USDA’s 2025 estimate for beef production is a decline of more than 1 billion pounds. That tells me we’re not done getting tighter.”

Brown says the one wild card for beef prices is demand. So far, demand has seem unfazed, despite record prices. Export demand remains strong, but so does demand for beef within the U.S. Those are underlying factors that are also supporting cattle prices. keep saying I’m not sure we’re done with record prices. So I think all hinges on demand staying strong for us beef, especially here in the United States.

The “Why” Behind a Growing Ag Trade Deficit in the U.S.

While meat exports have been strong, other commodities continue to struggle and at the same time, the U.S. is importing more ag products and goods. USDA’s Ag Economic Research Service (ERS) now projects the agricultural trade deficit to climb once again to $32 billion in fiscal year 2024, an increase of $1.5 billion from the February projection.

What factors are most important to the increase in the trade deficit? The June Ag Economists’ Monthly Monitor asked economists that exact question. Nearly every ag economist noted the strong U.S. dollar as one reason the trade deficit continues to grow, but other factors, according to the economists, include:

Increased used cooking oil imports for renewable diesel
Increased imports of horticulture products
Softer U.S. ag exports

ERS also projects Mexico to beat out China as the top buyer, with China projected to fall to third biggest importer of U.S. ag goods at $27.7 billion. ERS expects Canada to claim the number two spot and Mexico to reach number one at $28.7 billion, an increase of $300 million.

The rise of Mexico’s imports have come in spite of the ongoing GMO corn battle between the U.S. and China. In 2023, Mexico officially banned GM corn for human consumption. That same year, Mexico also made its largest corn purchase from the U.S. of 15.3 million metric tons.

Some economists say Mexico is treating U.S. corn as a threat, and while exports are up, it’s having a big hit on GM corn demand.

“It has impacted white corn demand specifically, and the reason that when we look at overall corn demand and we still see Mexico as being a big buyer, is because white corn is such a small percentage of our total corn,” says Krista Swanson, lead economist for National Corn Growers Association (NCGA) who also participates in the Monthly Monitor survey. “So, if you look specifically at white corn exports, you do see that impact. When we talk about the total corn complex, though, Mexico’s had a drought that has reduced their production. They already consume quite a bit more than they produce, so they tend to be an importer. But this year they’ve had to import more than normal. And so that’s where we’re seeing those big buys coming in from, from Mexico and where that’s really boosted U.S. corn exports this year.”

Future of Interest Rates

Higher interest rates are impacting farmers and major equipment manufacturers. On the heels of the Federal Reserve deciding to leave interest rates unchanged during their June meeting, the June Ag Economists Monthly Monitor asked the economists how many rate cuts, if any, we will see this year. 73% said one. 18% think two rate cuts this year. And 9% say there will be no rate cuts in 2024.

73% of ag economists think the Federal Reserve will make one interest rate cut this year, according to the Ag Economists’ Monthly Monitor.

(Lindsey Pound)

With the expectation for higher-for-longer interest rates, farmers are scaling back on big-ticket item purchases, which includes buying equipment.

The May Ag Economists’ Monthly Monitor asked economists to rank where they think farmers will look to cut costs. While all economists said scaling back on equipment purchases is either most likely or somewhat likely, 65% of economists think farmers will look for lower operating interest rates and 17% think it’s most likely.

Purchase changes

(Lindsey Pound )

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