- Agricultural groups are raising concerns about the dire situation farmers are facing. Crop prices are dropping continuously, while the costs of production and inputs are climbing. They’re urging lawmakers to push for better access to export markets, including China, which remains entangled in a trade war with the U.S.
Prices for U.S. corn and soybeans have taken a nosedive in recent years, spreading panic among farmers, particularly as President Trump’s trade war intensifies their plight.
Recently, the National Corn Growers Association (NCGA) sounded the alarm bells regarding the economic turmoil squeezing rural communities as commodity prices drop while the costs of inputs remain shockingly high.
Corn prices have plummeted over 50% since their peak in 2022, but production costs have edged down by only 3%, leading to an approximate loss of 85 cents per bushel. According to the NCGA, the forecast for the next year appears grim with predictions of even lower prices and rising costs.
The NCGA has urged Congress and the Trump administration to boost demand through measures like increasing ethanol blends and expanding access to foreign markets.
Just last week, the American Soybean Association reached out to Trump, expressing that U.S. soybean farmers are on the precipice of a trade-induced crisis.
They’ve requested that Trump put soybeans front and center during trade discussions with China, aiming for major purchasing commitments and the elimination of Chinese tariffs on U.S. imports.
Historically, the U.S. was China’s go-to supplier. However, ongoing tariffs have driven long-time customers to source their needs from South American producers, who have significantly ramped up their output since the last trade boom.
With the harvest season just around the corner, the association noted that China hasn’t placed any soybean orders with the U.S. recently.
The longer the trade talks drag on without resolutions, the worse the situation will get for farmers. Like corn producers, soybean farmers are also contending with a sharp drop in prices amid soaring costs. Soybean prices have dipped nearly 40% since peaking in late 2022.
“Farmers dealing with soybeans are facing extreme financial difficulties,” they stated. “Prices keep falling while our farmers are spending a lot more on things like seeds and equipment. U.S. soybean farmers can’t withstand a prolonged trade spasm with our biggest buyer.”
Deteriorating Farm Incomes and Credit Conditions
The grim outlook for agriculture is echoed in a recent Federal Reserve survey on farm financial conditions. It reports that falling incomes are putting a dent in farmers’ liquidity, leading to a heightened need for loans.
Simultaneously, credit conditions are worsening, with roughly 30% of those surveyed in the Chicago and Kansas City Fed areas noting lower repayment rates compared to a year ago. In the Minneapolis Fed district, about 40% reported similar issues, while the share was around 50% in the St. Louis Fed area.
Fortunately, American farmers are expecting some relief soon. Following the initiation of Trump’s most recent trade conflicts this year, the administration and legislators have been discussing a potential bailout for farmers as early as April, resembling the earlier assistance provided during Trump’s first term.
The One Big Beautiful Bill Act, signed in July, is proposing an allocation of approximately $66 billion directed towards agriculture enhancements, with around $59 billion set aside specifically for improving farm safety nets, as reported by the American Farm Bureau Federation.
Plus, other trade agreements the Trump administration has arranged are anticipated to stimulate purchases from more Asian countries.
Notably, Indonesia and Bangladesh are ramping up their purchases as agreed. Reports indicate that Vietnam, the Philippines, and Thailand might likely increase their feed grain orders in the wake of these deal structures.
“There have been encouraging trade talks presenting a chance for the U.S. to bolster its access to regional markets,” Timothy Loh, Director of the U.S. Soybean Export Council for Southeast Asia & Oceania, mentioned to Reuters.
“We foresee a rise in demand for American products like soymeal and various agricultural exports in Southeast Asia.”
