View From the Cab

By David Tollefson, Columnist

In connection with Ag week, Chris Clayton of DTN/Progressive Farmer, offers the following, titled, “An Eye on National Ag Trade Day: Agricultural Trade Prospects Under Pressure Amid Tariff Uncertainty,” dated Wednesday, March 19, 2025. Here it is, edited slightly for length and clarity:

In the midst of a trade war on multiple fronts, it might not cover new ground, but United States agricultural groups would like to protect traditional export markets while opening up some new ones.

Agricultural groups on Wednesday championed “National Ag Trade Day” as part of National Ag Week. The group Farmers for Free Trade hosted a webinar examining the trade landscape.

Joseph Glauber, a former USDA chief economist and a research fellow emeritus at International Food Policy Research Institute, described the current situation facing farmers: “To talk about a multiple-front trade war is, frankly, quite disturbing for American agriculture.”

Darci Vetter, principal at Sower Strategies LLC and also a former chief agricultural negotiator at the Office of the U.S. Trade Representative during the Obama administration, said the big date now is two weeks away—April 2—when the Trump administration is expected to place reciprocal tariffs on other countries. Vetter said she understood this would translate into creating a “blended tariff rate” for a country based on its overall tariffs and non-tariff barriers for U.S. goods.

“Of course, that may also invite retaliation,” Vetter said.

Feed grains, oilseeds and meat products increasingly have relied on exports and top markets have evolved over time, Glauber said Three countries in the middle of the current trade disputes—Canada, Mexico and China—are also the three biggest markets for agricultural products.

Tom Madrecki, vice president for supply chain resiliency at the Consumer Brands Association, said tariffs complicate supply chains in multiple industries.  Much like auto parts, agricultural products soften cross borders multiple times, blending imports with domestic products.

Vetter pointed out that the pork industry depends on pigs from Canada that may have been fed from U.S. corn before being sent south.  Then, pork could be exported back to Canada.

“I think people think of the ag supply chain as being sort of simple and direct, but it’s actually quite complex as well,” she said.

When the 2018 trade war broke out, China was the largest market for U.S. agricultural products. The first Trump administration responded by paying farmers $23 billion between 2018 and 2019 to make up for the losses. Glauber said the situation led to distortions in planting decisions for producers.

“It was obviously very helpful to the industry to have that kind of compensation. The problem was that—the challenge was—how to put together a program without distorting production decisions,” Glauber said.

China had two large years of agricultural buys in 2021 ($32.8 billion) and 2022 ($38.1 billion), but since then, China’s imports from U.S. farmers also have slowed down,  Brazil now has 70% of the Chinese soybean market and the U.S. has 20%.

“So, all the growth we’ve seen in China since then has been essentially enjoyed by Brazil,” Glauber noted, adding that roughly 11 million acres in Brazil have gone into production since then.

Virginia Houston, director of government affairs for the American Soybean Association, agreed with Glauber that the 2018-19 trade war gave Brazilian farmers more incentives to ramp up production.

Houston said MFP payments amounted to a Band-Aid that kept farmers in business. The problem now is that farmers are already facing greater losses than in 2018. “The farm economy is in a much more dire place in 2025 than it was in 2018,” Houston said, pointing to higher expenses for land, equipment and inputs.

“Our concern is that an MFP payment may not be enough to keep farmers in the game,” Houston said. “I’m hearing from farmers who are worried that if this happens again they may just have to say they’re done.

One of the complaints by the Trump administration against China is that it did not meet its target of $40 billion in annual agricultural purchases. Treasury Secretary Scott Bessent said during his confirmation hearing that he intended to press China on that issue.

ASA is advocating for the Trump administration to expand opportunities for U.S. soybeans to be crushed for more bio-based diesel products. That would still lead to the need to increase exports of soymeal, however. “Again, all roads lead to trade.”

Soybeans currently face a 10% retaliatory tariff from China, which is coinciding with the peak of Brazil’s soybean harvest.

Houston noted soybeans could face retaliatory tariffs from both Canada and Europe.

“We do know that we are on Canada’s second list for potential retaliation, and that would be full beans, soybean oil and soybean meal,” she said.

Soybean groups are looking at ways to diversify markets, Houston said, but soybeans are already heavily tied to exports. “Our farmers are so efficient, and we produce more than we can ever consume here in the U.S. So, we have to look at trade policy as part of economic stability for U.S. soybean farmers,” she said.

Jordan Dux, senior director of national affairs for the Nebraska Farm Bureau, pointed out that producers in his state are susceptible to tariffs. At the same time, farmers are looking for new markets to sell more products.

“From our standpoint, we’re willing to go wherever folks need our products, Dux said. He added, “There are a lot of countries where we can try to improve market access.”

“It takes years to get these things done,” he said. “And that’s where all of our other competitors are out negotiating trade agreements, and I think we are all falling further and further behind on that front.”

Madrecki said the “America First” trade policy has positive goals and maybe it could use some refinement. But he said there is an aggressiveness to tariffs that the Trump administration expects will accelerate talks.

“You should acknowledge them for having the boldness to use that sort of economic cudgel of tariffs to drive negotiating strength. There is a certain leverage they are projecting from a geopolitical perspective, and the ability to get things done.”

Ast the same time, Vetter also noted tariffs operate like blunt instruments. “If you are a hammer, everything looks like a nail.”

Separately Wednesday the bipartisan Agriculture Trade Caucus in the House of Representatives introduced a resolution “expressing a renewed commitment to supporting market access, trade promotion programs, comprehensive agreements, robust trade enforcement, elimination of trade barriers, and the pursuit of science-based standards.” The resolution was backed by 19 House members and several agricultural groups.

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Please contact David Tollefson with thoughts or comments on this or future columns at: adtollef@hcinet.net