A Perfect Storm for US Agriculture Threatens 34 Million Jobs

Extreme weather, tariffs, DOGE, frozen funds, and inflation threaten America’s beleaguered farmers

American farmers face a financial cliff as tariffs and severe storms take a wrecking ball to spring planting and market prices.

It’s planting time in America’s rural heartland, those states in the Midwest, the Great Plains, and the Mid-South Delta that are the “breadbasket” of the country’s agricultural economy. But the usual spring optimism that fuels farmers is subdued this year by the implications of extreme weather — and a new world trade order of reciprocal tariffs that threatens U.S. agriculture exports. This threatens more than $21 billion worth of soybeans and corn produced last year for Mexico, Canada, and China, the top three American markets. That’s more than half of the total $49 billion worth of both commodities that were exported.

To make matters even worse, money that in the past has been used to bail out farmers may not be available. The coffers of the Commodity Credit Corporation (CCC), a wholly owned U.S. government corporation, used to finance farm price and income support, is depleted. At stake are the dozens of commodity programs, commodity export credit guarantees, and agricultural export subsidies. The beauty of CCC relief is that it can make payments quickly and to provide financial support to America’s producers and farmers immediately. The catch: The CCC account is currently depleted due to the large payouts of recent years. And Congress has to authorize funds for the CCC to make payments.

Finally, farmers face the threat of frozen funds and another potential bout of debilitating inflation.

The Weather Report: Severe Spring Storms Due to Climate Change

For the past several years, the ag production season in Mid-America has been swamped by torrential rains that have drowned freshly planted crops and delayed planting due to submerged farm fields. These spring deluges, often more than a foot at a time, have created “generational” flooding and been accompanied by more frequent and more powerful tornadoes that have damage everything from barns and irrigation equipment.

These catastrophic storm events have been followed by severe droughts during the summer growing season. In the Bootheel area of Missouri where my family owns farmland, from June to mid-July 2022 we recorded not one drop of moisture — a first, according to local farmers. In the fall, record-low levels of the Mississippi River, the primary transportation channel for the mid-country’s agricultural production, have delayed shipping at harvest for the past three years, adding extra costs.

Ironically, last year’s “normal” weather (moderate and timely rains, average-size storms, and good fall harvest weather) was considered “abnormal” by farmers who have now become inured to the past decade’s radical changes in weather patterns.

Weather at this year’s spring planting time which began in March saw multiple severe storm systems that generated torrential rainfalls, hail, and record numbers of tornadoes. Some early planted corn was drowned and had to be re-planted. And flooded fields meant that farmers couldn’t get onto the soggy land; delayed planting usually means lower yields.

New Tariffs Have Slowed Sales of Key Ag Exports

A new layer of financial storm clouds on the American agricultural horizon threatens to add that proverbial last straw to the already formidable pile of obstacles now facing producers: the sweeping tariffs applied to global trade. As 20 percent of all U.S. agricultural products are exported, the financial stakes are enormous.

American farmers are bracing for a repeat of 2018-2019, when trade wars with China, the largest buyer of U.S. agricultural products, cratered prices for agricultural commodities due to reduced purchases of soybeans and corn. Those prices have not recovered and now hover at four-year lows.

In addition, overseas markets for U.S. products have dropped as the Chinese have increasingly switched to other providers, notably Argentina and Brazil, which have surpassed the U.S. as a supplier of soybeans to China. After many years in which the U.S. was the leading trade partner, Brazil provided 69% of China’s soybean imports while the U.S. share shrank to 25%.

Now, the forecast for this year’s ag export business is even more dire. Tariffs with America’s largest trade partners, Canada and Mexico, are currently undecided, and there’s a virtual trade embargo currently in place with China. New Chinese tariffs of 15% on corn and 10% on soybeans add prohibitive costs to importing American products. Those three countries buy nearly half of all U.S. ag exports. (In 2024, Mexico became the top destination, with China sinking to the number three spot after Canada.) While China made some buys of U.S. soybeans earlier this year in anticipation of trade disputes, purchases of American ag commodities have paused. Instead, China is buying from Brazil, alternative sources with rapidly rising production rates.

The United States sells more soybeans to China, by value, than any other single product. Last year, that amounted to more than 27 million metric tons, worth $12.8 billion. A drop in this trade is bad news for American farmers and good news for the nation ready to step in: Brazil.

More Problems at Play: No Farm Bill, DOGE Cuts to USDA

There are other pressures this year. There has been no new farm bill since 2018; a new one is typically passed by Congress every five years. The 2018 bill has simply been extended since 2023 on a year-to-year basis through 2025, with no adjustment in its calibration of economic support for farmers to reflect current conditions.

In addition, at the direction of DOGE, $2 billion worth of American agricultural products, annually included in the now-eliminated USAID program, are in limbo. Also, a program that funded $1 billion in local food provided to schools has been cut. And as of today, plans are to close over 100 USDA offices and cut an estimated 10- 20% of the USDA’s 100,000 personnel.

Meanwhile, on top of several years of sagging market prices and shrinking market share, costs (seeds, fertilizer, diesel fuel, farm equipment) have risen, driven by several years of inflation and now, by tariffs. For example, 80% of potash, a crucial fertilizer for corn, used on U.S. farms comes from Canada and now carries a tariff of 10% on top of its usual price.

The Bottom Line: A Looming “Bust” in the American Ag Economy

Farming has never been more precarious. Family farm bankruptcies increased by 55% last year, compared to 2023, and at the start of 2025, the number of bankruptcies is already exceeding the same time last year, according to a new report by Bloomberg Law. The report notes “Unpredictable tariffs, immigration overhauls, federal program cuts, and frozen Agriculture Department funding are now part of the discussions farmers are having as they seek financial help.” The last time farm bankruptcy filings rose was in 2019, during the previous trade war with China. Eventually, the previous Trump administration sent farmers more than $20 billion in Market Facilitation Program payments (MFP) to help cover export losses.

Biden-era Payments Offer Limited Immediate Support

To date this year, the only federal support has come from a Biden-era program, the Emergency Commodity Assistance Program, part of the American Relief Act of 2025, which was passed by Congress in December 2024. The program authorized $10 billion for ECAP payments to help offset losses that growers incurred during the 2024 crop year, and these are being dispersed now.

Many other Biden-era agricultural-related programs have been frozen in place, as the current administration seeks to eliminate them while recouping funds already appropriated by Congress. These include the Rural Energy for American Program which promised to re-pay farmers and ranchers 50% of the costs of sustainable improvements, such as switching irrigation motors from diesel to electric power. Those who have fronted the investment and submitted their invoices for the 50% rebate are now being told that those reimbursements are frozen. This comes at a time when producers are taking on the annual hefty loans to put spring crops in the ground.

Where’s the Trump Administration Relief?

So far, comments on this dire situation by the administration and its allies have been as vague as its constantly changing tariff policies. Senator Jon Husted (R-OH), addressing the Ohio Farmers Bureau, noted that retaliatory tariffs on corn and soybeans would present yet another financial burden for Ohio farmers, who have lost market share of international corn and soybean exports to other countries during Trump’s first U.S.-China trade war. Ohio soybean exports have never recovered, sinking 60% from 2019 to 2023. As to any tariff-driven relief from the federal government, he said “I think the president is going to help work through those things. I think it remains to be seen what those impacts are. And once we see what those impacts are, then we’ll talk with the president about how to respond.”

You’d expect a more detailed, forceful statement from even a Republican senator in a state where one in eight workers in Ohio is engaged in agriculture, a business sector worth $124 billion annually, according to the Ohio Department of Agriculture, and where he state’s top crops are corn and soybeans.

“Trump Dollars” for Farmers, 2025-6

Given the scale of uncertain weather conditions that affect yields and even more uncertain tariff policies, which have roiled export markets, it is likely that the price tag to keep Mid-American farms in business would be a multiple of the $28 billion shelled out to farmers during the first round of geopolitical trade disputes in 2019. That amount was estimated to account for one-third of all farm income, given the significant impact on collapsed export markets.

Back then, payments in the form of checks signed by the president were issued by the Commodity Credit Corporation (CCC), a wholly owned U.S. government corporation, which served as a financing institution for the USDA’s farm price and income support commodity programs, commodity export credit guarantees, and agricultural export subsidies. The beauty of CCC relief is that it can make payments quickly and provide financial support to America’s producers and farmers immediately. The catch: The CCC account is currently depleted due to the large payouts of recent years. Congress has to authorize funds for the CCC to make payments.

The Numbers are Big

The economic impact is huge. Agriculture, food, and related industries contributed roughly $1.537 trillion to U.S. gross domestic product (GDP) in 2023, a 5.5 percent share, according to data from the Bureau of Economic Analysis. The output of America’s farms contributed $222.3 billion of this sum — about 0.8 percent of U.S. GDP. The overall contribution of agriculture to GDP is larger than 0.8 percent because sectors related to agriculture rely on agricultural inputs to contribute added value to the economy.

The climate and capital story on America’s agricultural economy is a developing story.

 

Article by John Howell, Finance Editor for Climate & Capital Media and a partner in his family agri-business firm in Missouri.

Article reprinted with Permission as part of GreenMoney’s ongoing collaboration with Climate and Capital Media.