America Has Failed Its Farmers

Kian Nolan-Landwehr

John Deere combine harvester in a soybean field | (Via: Ohio Soybean Issue)

The U.S. agricultural sector is in big trouble, but it’s nothing new, and certainly not unpredictable. Trump’s sweeping tariff reform over the past year created a huge shift in international trade. But in an effort to bolster domestic manufacturing, Trump has sacrificed other parts of the economy, namely agriculture. Farmers have been forced into dire positions, and farm foreclosures this year have skyrocketed past 2024 levels, with more farm closures in the first half of this year than all of 2024.

President Trump and Brooke Rollins, the Secretary of Agriculture, now prepare for yet another taxpayer bailout of American farmers, who overwhelmingly voted for Trump in the past three elections. Trump claims that the bailouts will be paid for by tariff revenue, although at the end of the day, those are also paid for by the American consumer. America has extremely high agricultural productivity and has appropriately dominated global corn and soybean markets for decades, exporting roughly 60% of American soybean production and claiming a slowing but solid 33% share in global corn markets in 2024.

China has remained America’s largest soybean customer, due to its rapidly expanding middle class and its growing preference for pork and chicken, which are mostly fed on soybean meal. However, in 2018, China placed a 25% retaliatory tariff on American soybeans and corn, which led to a 77% drop in American soybean exports to China that has never since recovered.

Instead, China has diversified its soybean imports, finding suppliers within other countries. Brazil is the most notable, having since overtaken American dominance as the top global corn and soybean exporter due to increasing availability of arable land and the modernization of its agricultural chains. Although the U.S. is a net importer and thus will face fewer hits to export competitiveness, Americans will still feel the pressure of a trade war, just ask any American farmer.

Farmers have faced surging prices in the past few years. Higher fertilizer costs in recent months from tit for tat tariffs in potash and phosphorus markets have resulted from rifts in U.S. and Canadian relations. Machinery costs and imported equipment have seen recent price hikes largely due to domestic steel tariffs and complicated regulatory hoops that attempt to track foreign metal content.

In addition, farmers and investors have little certainty about future rates given the whiplash created by the current administration, by repeatedly flips the tariff switch on and off. This has made producers and importers hesitant about pricing and taking safer positions to avoid dipping into profit margins, which has created spikes in prices across farm machinery.

Furthermore, the crackdown on immigration and the administration’s strong deportation effort have increased farm labor costs, driven by a dwindling farm labor supply as both illegal and legal workers fear for their safety. On top of this, U.S. farmers have had another great bumper crop this year with record high yields, which, coupled with a dwindling overseas demand, will only further contribute to a glut in prices that also force American farmers to pay mounting storage costs.

Part of the problem is the continued issuance of crop insurance payouts from the U.S. government. Over 80% of these insurance premium subsidies flow to corn, soybeans, wheat, and cotton. This has left American agriculture poorly diversified and heavily reliant on foreign buyers to maintain demand to satisfy the ever-expanding supply.

Government crop subsidies create all sorts of problems of moral hazard. Some farmers use inefficient or unsustainable farming techniques in fear of losing their insurance claims, because it’s cheaper to take the government payout than to actually become a more efficient producer.

Given that farm bankruptcies during the first half of 2025 exceeded those for the entire year of 2024, it’s no surprise that farmers hedge their risk and focus production on crops with good insurance premiums. Other government market influences, like biofuel standards, have encouraged American farmers to produce corn and soybeans specifically for ethanol and diesel. In a sense, government policy has corralled farmers into overproduction of specific crops that are heavily export dependent, on America’s biggest adversary, and heavily dependent on a government-formulated biofuel market.

Ideally, the current administration should try its hardest to reach a deal with Chinese importers, with possible good news coming from the administration as of late, prompting soybean futures to rise briefly. If the U.S. cannot mend its relations with China, then it must desperately seek to diversify its export market and reach deals with soybean meal processing facilities in other countries. Otherwise, repeated bailouts of farmers dependent on poorly formulated trade policy and agricultural policy will continue to fail American farmers and American taxpayers.