Trump’s Tariffs - Farmers on the Brink

“It’s a dire situation in the farm economy and that situation is only getting worse.”   Farm Journal.

No Labour No Harvest

In the USA, farmers are facing a deepening crisis. Arkansas farmers are currently at the epicenter although other states including Iowa, North Dakota, Illinois and California are also struggling. Farmers are experiencing severe financial losses due to a combination of:

• Record-high input costs

• Low commodity prices

• Loss of key export markets

• Loss of labour.

These factors have created a “perfect storm,” pushing many farmers to the brink of collapse. A lender likened the situation to a hurricane: while the Midwest is just feeling the winds, Arkansas is already in the eye of the storm.

Farmer Response and Urgent Plea

During harvest season, up to 400 farmers attended a meeting in Brookland, Arkansas. All expressed urgency toward the State and Federal Governments stating, "the mood was somber, described as “funeral-like,” with farmers deeply concerned about the future of agriculture “We need help, and we need it now.”

Financial Breakdown

• Many Arkansas farmers have faced four consecutive years of losses.

• Operating loan data shows:

  • 2022: 40% of producers lost money

  • 2023: 50% lost money

  • 2024: 70% lost money, averaging $150 loss per acre, even after government payments

• Predictions for 2025 suggest similar losses, despite strong yields.

Young and beginning farmers with little equity suffered the most. High land rents with multi-year losses and growing debt compounded the issues for them. Farmers called upon the government to provide ad-hoc payments similar to what happened during covid. Without this help farmers projected that 25-40% of them will not be farming in 2026. It will be history repeating itself, as in the 1980s when farms collapsed due to rising equipment costs or having to sell vital equipment in order to survive.

Economic Perspective

Economist John Newton notes that crop cash receipts have dropped $71 million (inflation-adjusted) over three years, matching the largest historical decline. Stephen Sinski of the American Soybean Association warns that this downturn is worse than the 2018 trade war, due to lower starting prices and higher input costs. Trumps first term was from January 20, 2017, to January 20, 2021.

Long term concerns are Government aid often getting absorbed into land rents and values, reducing its long-term effectiveness. Farmers prefer market access over subsidies, especially to China.

Conclusion

Without sustainable markets or meaningful support, many fear this could be their last year farming. Trump’s tariff policy is backfiring big time with the loss of markets for farmers; China was the biggest of them all.