The impacts that tariffs will have on the U.S. ag economy continues to concern both larger and small farmers and ranchers. Last week, California filed a lawsuit seeking to block Trump’s wide-ranging tariffs on foreign trading partners, accusing him of abusing his powers and inflicting financial harm on both the state and nation. Dr. Chad Hart, extension grain markets specialist with Iowa State University points out that we knew in general that tariffs were coming, but the chaos comes from looking for the details, and he’s concerned about the amount of moving parts that are still remaining that may cause markets to be indecisive, leading to uncertainty in the uncertainty in farming and lender communities. He added that what we are seeing today is reminiscent of the trade war with China in Trump’s first term, but he was quick to point out that there is a difference, mainly the numbers and amount of tariffs placed on other countries in recent weeks.
According to USDA statistics, the U.S. exported $176 billion in agricultural products to a total of 189 countries and territories in 2024, with 75% of these exports going to 10 markets, and nearly half of these exports went to three countries, Mexico, Canada and China. At this point, we don’t know whether the Trump administration is going to grant special tariff exemptions for U.S. agricultural products being shipped to any of those 189 countries. Many observers expect that the often-changing Trump trade policies will affect agricultural markets throughout this year. Farm income specialists at the U.S. Department of Agriculture point out that the U.S. farm economy is already facing tough times, and tariffs will likely weigh heavily on profits this year. According to USDA, 2025’s net farm income will be $137.7 billion, that’s slightly less than last year’s slim $139.1 billion, considering that farm income for 2022 was a record $182 billion.
University of Illinois Farm Doc Daily points out that the U. S. and Brazil are our major competitors, supplying over 80% of global soybean exports, with China purchasing about 60% of total U.S. soybean exports over the last five years. But now, Brazil has become heavily reliant on Chinese import demand, with 73% of Brazil’s exported soybeans going to China, versus the 51% of soybeans coming from the U.S., So it appears that Trump’s tariffs imposed during his first administration are still haunting U.S. soybean farmers. What the 2nd Trump Administration doesn’t seem to realize is that they shouldn’t give Brazil a reason to plant more soybeans, because Brazil’s growing season allows them to raise two soybean crops each year, while U.S. growers can only raise one. Then there’s Brazil’s capacity to add crop acres. According to a study by the Brazilian Agricultural Research Corporation, there are about 70 million acres of planted pastures in Brazil that can be converted to crop production, while USDA data, indicates that the since 2014, U.S. planted acres have fluctuated between 303 and 327 million acres, indicating that the U.S. has little capacity to add more crop acres for additional grain production.
While crop producers are facing significant headwinds, the cattle sector is seeing record prices and returns for cow-calf producers, according to Cattle Fax, an information and analysis service for the beef and agricultural industries. They predict that the U.S. beef industry is poised for another year of strong market performance due to tight cattle supplies and robust consumer demand. Kevin Good, vice president of market analysis at CattleFax, reports that U.S. beef cow herd is expected to see cattle cycle numbers to start 2025 at 28 million head, that was 150,000 head below last year and 3.5 million head below the 2019 cattle cycle high numbers.
British Businessman Sir Harold Bowden wrote,” Facts that are not frankly faced have a habit of stabbing us in the back.”
