By Joe Schulz
Farmers harvesting their crops this fall are also waiting to hear whether they can expect a check from the government.
The administration is reportedly eyeing $10 billion to $15 billion in aid to farmers. President Donald Trump has said he’d like to use tax revenue generated by tariffs to provide relief for farmers, who’ve lost a key soybean market due to the trade war with China. Yet the expected announcement has been pushed back indefinitely in the midst of the federal government shutdown.
Matt Rehberg operates a farm near the Wisconsin-Illinois border and is the vice president of the Wisconsin Soybean Association.
He says the boycott from China which purchased around half of all U.S. soybean exports last year has made this year especially hard for soybean farmers. But he believes bailout programs are only a temporary solution.
“We want markets. Markets are consistent. We can bet on them,” he said. “When you go to these ad hoc bailout programs, they definitely help. But it’s kind of like putting a Band-aid on a gunshot wound.”
Along with international trade uncertainty, farmers are also struggling due to a mix of low crop prices and high costs for things like fertilizer, making this an especially tough year for farm finances.
A survey of 1,034 farmers released in September by the National Corn Growers Association showed that nearly half believe the U.S. economy is on the brink of a farm crisis, and two-thirds are more concerned about their farm’s finances than a year ago.
Corn prices, for instance, are down to $4 per bushel this year compared to around $7 per bushel in 2022, according to the U.S. Department of Agriculture. On the input side, the USDA reports labor costs are up 47 percent since 2020, fertilizer 37 percent, fuel and oil 32 percent and seed 18 percent.
Zac Soltvedt runs a family farm in Seymour, Wisconsin, growing corn, soybeans and wheat. Much of the corn he grows is sold as feed to Wisconsin’s dairy farms and “doesn’t hit the international market as much,” he said.
But the prices he expects to get this fall aren’t keeping up with production costs, he said.
“A lot of guys can adjust to low corn price if input prices are lower as well,” he said. “It’s (tough) when the corn price falls below cost of production, but input prices are still through the roof. It seems like it’s just becoming more and more of a gap there lately that we can’t get out from underneath.”
Loss of markets
During the first Trump administration, more than $23 billion in taxpayer dollars was given to farmers to compensate for their trade-related losses, according to a report from the libertarian Cato Institute.
That time around, the tariff battle resulted in a $27 billion reduction of U.S. agricultural exports from mid-2018 through the end of 2019, the report says. Soybeans made up 71 percent of that lost value.
Rehberg, with the Wisconsin Soybean Association, said the soybean market never fully recovered after the first trade war with China.
“We never regained that lost ground,” he said. “In fact, China went shopping for a new supplier. We became a little less reliable to them, so they went to mainly South America and started buying soybeans there.”
And another bailout wouldn’t do anything to help farmers regain ground in the Chinese market or grow other international markets, said Jonathan Coppess, a professor of agricultural policy at the University of Illinois.
“It’s not going to fix the lost market problems that we’re talking about,” he said. “It could harm farmers in the long run if, for example, costs stay high or we plant soybeans for a market that doesn’t exist.”
Because grain farmers typically rotate between soybeans, corn and wheat, most are likely to feel the impact of international trade barriers, Coppess said.
Continuously shifting federal trade policy also makes it hard for farmers to plan for next year’s crop, he said, because they don’t know what markets will or will not be available to them.
“Farmers can’t plan around political talking points or slogans and social media posts,” Coppess said. “None of that helps deal with the uncertainties and risks in farming.”
At the same time, Coppess said new federal bailouts to farmers could run the risk of keeping input costs high.
“If all these payments do is pass right through from the farmer to the fertilizer companies and the seed companies to the landlords, then the farmer’s still stuck in this situation where the market isn’t there but the costs are not adjusting for what the new market reality is,” he said.
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