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Ag Sector Alarm Bells Are Going Off

By Charlie Schlenker

There are big warning signs in agriculture right now. And many experts are warning an aid package announced by the Trump administration is not likely to go very far or come soon enough.

Between loss of markets and low prices caused by tariffs and high costs, a lot of farmers are under water this year, despite a bumper crop, if they can even find someone to sell to.

“I’m scared that we’re rivaling a scenario like we saw in the 80s for agriculture,” said Illinois Agriculture Director Jerry Costello.

Costello said the stress farmers are seeing is enormous. Illinois farmers are averaging a 30 cent per bushel loss on corn, and a $1 a bushel on soybeans this year. That adds up.

“Break even across the state on a bushel of corn is about $4.60 give or take. As we’re talking [Dec. 12] I think corn is somewhere around $4.30-$4.27 give or take. Break even on a bushel of soybeans, if you average in the entire state, is about $11.60 $11.65, I think beans are somewhere around $10.60, right now. We’ve had a bumper crop this last year. Farmers are doing their part,” said Costello.

Ag economists are estimating U.S. farmer losses on this year’s crop at $35 billion to $43 billion. Costello blamed mostly the president’s tariff policies.

“It’s beyond logic where we are in the trade wars that we’re having with so many different countries,” said Costello.

Costello said he could have understood strategic limited tariffs as a tool to get to an agreement. But not this.

“It’s scary as hell to think about where we’re at and how widespread this is,” said Costello.

For perspective, Costello said Illinois has around $8.7 billion in agricultural exports per year. 80% of that goes to Canada, Mexico, and China, all places on which the federal administration has imposed tariffs.

“And that’s not adding everything in. You can’t talk about affordable housing and be in a trade war with Canada which is a huge lumber producer and supplier for the U.S.,” said Costello.

It’s not just tariffs hitting the ag sector.

“One of the situations everybody’s dealing with in agriculture right now is the lack of profitability. We’ve got the same prices, if you adjust to inflation, as we had in 1974, but our input costs have quadrupled in that same time period,” said Illinois Farm Bureau President Philip Nelson.

Nelson said the only input price that has gone down is the cost of diesel fuel.

“You got four seed companies that control about 80% of the seed market. You got four meat packers that control over 80% of the meat packing capacity. And you got about four fertilizer companies that do about 80% of the business worldwide,” said Nelson.

Nelson said he’s pleased Congress is looking at the lack of functional markets on inputs.

“I think we need to continue to look at that to have better transparency in those markets so that they work and they don’t just get set by the big four, you know, take it or leave it,” said Nelson.

Both Nelson and Costello agreed interest rates are still high.

Catherine Bertini is a former assistant secretary of agriculture in the Bush-41 administration, an emeritus professor at Syracuse University, and is now a distinguished fellow of Global Food and Agriculture at the Chicago Council on Global Affairs. Bertini was the first American to be appointed executive director of the United Nations World Food Program.

“It’s hard to find a bank that will want to lend to agricultural interests,” said Bertini during a Council on Foreign Relations briefing.

Bertini said the present crunch is mostly caused by tariff policies. Yet, farmers have always been subject to cycles.

“And then all of a sudden, boom markets got pulled out from under them. So what do they do?” said Bertini.

In the past, sometimes crops were sent abroad. That’s the rationale behind the World Food Program, to deal with surpluses.

“The U.S. administration isn’t doing much overseas. That could be an avenue for at least some. But it’s obviously not one that it’s explored, and not fast enough for those crops not to spoil,” said Bertini.

What the U.S. administration has done is propose $12 billion in aid — most of it for corn and soybean farmers. First, there’s a question about the timeliness of that. Bertini said the administration has yet to put out details on how farmers apply and get the money. Aid is supposed to be available by the end February 2026.

“That’s still quite a delay for guys and women that owe money for various reasons and didn’t get to sell their crops,” said Bertini.

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Western Canadian Agriculture: Hard Times Made the World's Best Farmers

Video: Western Canadian Agriculture: Hard Times Made the World's Best Farmers

Western Canadian agriculture produced the most advanced farmers in the world not through abundance but through adversity. The crow rate fell. The wheat price went nowhere. The brown envelopes stopped.

When the subsidies disappeared, the bad farmers left and the good ones stayed. And the ones who stayed could not just grow wheat anymore. They started growing lentils and canola and peas and flax and faba beans. They built crop rotation. They got serious about agronomy because there was no government backstop. That process produced the Western Canadian agriculture Dennis Bulani describes in this clip: the most advanced, most educated farming culture in the world.

His contrast with Iowa corn and soybean farmers is sharp. At a DeKalb farmer meeting in Okoboji, Iowa, he asked what crop rotation they ran. Beans on corn stubble, corn on bean stubble. How do you fertilize? The co-op agronomist handles it. Have you considered other crops? No need. We make so much money on corn and soybeans. Western Canadian agriculture was never allowed that comfort. And now those Iowa farmers are watching soybean markets lock up with China and corn prices slide, and they do not have the agronomy knowledge or the research base to pivot. Western Canadian farmers adapted on a dime because they had done it before.

Dennis also makes the case that Western Canadian agriculture keeps adapting in real time. Low commodity prices over the past year have pushed growers to look seriously at precision spot-spray technology. He knows a neighbor who bought a sprayer with the seeing-eye system and sprayed only 80 out of 320 acres. As a chemical retailer Dennis acknowledges that will affect his sales. He supports it anyway, because if it advances Canadian agriculture and makes farmers money, that is a good outcome.

The lesson Dennis draws from the tale of two farms: continuous improvement is the only durable strategy. When canola was $22 a bushel some growers went to Arizona instead of the Crop Production Show. When the price came down those same growers came back to the research and the discipline. Products do not go on Rack Petroleum's shelves unless they pass a replicated trial first. That is what Western Canadian agriculture built through hard times: farmers who do the work whether the times demand it or not.

Dennis Bulani is CEO of Rack Petroleum and Ultimate Yield in Biggar, Saskatchewan. Dan Aberhart hosts GTF Productions, Western Canadian Agriculture's foremost live briefing platform and its foremost AI training platform for ag operators