Any federal aid package is unlikely to reach American farmers in time for 2026 crop planning

Farmers plan out their next planting season during
the winter. (Adobe Stock photo)

Relief money for American farmers caught up in the Trump administration's recent trade disputes is likely to arrive too late to help them plan 2026 crops. "For months, farmers have pleaded for government aid to soften the blow of trade wars and another unprofitable harvest," reports Kevin Draper of The New York Times. "Most farmers and bankers have concluded that any aid will be too little and too late to rescue the next planting season."

The post-harvest season is when most farmers take stock of their finances and partner with their bankers to plan expenditures for the following year; however, high crop yields, low commodity prices, and few sales to China have caused some farmers to forgo any 2025 sales and store beans and grain. Other farmers have sold their crops at a loss. Both groups face the prospect of having to take on debt or use their cash reserves to fund their next planting season.

Even if the Department of Agriculture and the Trump administration work with speedy precision, it could "still take months before farmers receive any checks," Draper explains. "That would be well after the crucial winter [decision] period."

Stephen Vaden, the deputy secretary of agriculture, said on the “AgriTalk” radio show last month, "We may need to have a bridge to next year, but how many lanes that bridge has is going to be determined by what the market does between now and then."

Farmers are also waiting on new Farm Bill decisions. Draper adds, "It is also unclear if Congress will pass a new farm bill, which expired in 2023 and was extended a third time as part of the legislation to reopen the government."

Mega merger would create first coast-to-coast rail company in U.S.; farming and manufacturing sectors voice concerns

Union Pacific and Norfolk Southern railroads signed an 
agreement to merge. (Photo by Tyler Silvest, DTN CC)

Union Pacific has announced plans to merge with its smaller rival, Norfolk Southern. The $85 billion merger would create the nation's first transcontinental railroad while giving Union Pacific the power "to reshape the movement of goods from grains to autos across the country," report Sabrina Valle, Shivansh Tiwary and David French for Reuters. "If approved, the deal would be the largest ever buyout in the sector."

The mega deal, which would connect 50,000 miles of track across 43 states, "will face lengthy regulatory scrutiny amid union concerns over potential rate increases, service disruptions and job losses," Reuters reports. "The 1996 merger of Union Pacific and Southern Pacific had temporarily led to severe congestion and delays across the Southwest."

Particularly at harvest time, railroad changes, costs, delays and timing can directly impact farming incomes. The National Grain and Feed Association said in a news release "that it will undertake an extensive evaluation of the proposed merger to better understand its implications for our industry," reports Mary Kennedy for Progressive Farmer.

The American Chemistry Council weighed in and cautioned against further rail mergers. ACC leadership told Kennedy, "The impact of a transcontinental merger between two of these railroads threatens to leave American manufacturers, farmers and energy producers with even fewer competitive options to ship by rail. . . . Many rail customers are currently dealing with high rates and unreliable service. Further consolidation within the rail industry is likely to make these problems worse."

The proposed merger "reflects a shift in antitrust enforcement under U.S. President Donald Trump's administration," Reuters reports. "Executive orders aimed at removing barriers to consolidation have opened the door to mergers that were previously considered unlikely. . . .The Union Pacific merger would give the company a 43% market share, dominating most categories of commodities."

Quick hits: Racing cars with a 'twist;' egg prices slide; lower tariff for 'happy nut;' bird flu cases slow; PFAS trial

The Gary Wilson Jr. 2009 Toyota Yaris heads down the track. (Photo by Sam Wolfe, NPR)

Camden, S.C., may only have 7,800 people, but it hosts a raucous event where residents and visitors are treated to cars with bad rap sheets and crazy detailing. "The race cars roll into downtown like an old-fashioned circus . . . . A Honda Civic has a lawnmower, squirrels and flamingoes on its roof," reports Bill Chappell of NPR. "They're all here for the local installment of 24 Hours of Lemons, an endurance car race with a major twist: The cars can't cost more than $500. The series bills itself as 'racing for real people.' The 24 Hours of Lemons races started more than 15 years ago in California. There are now 23 races each year, from coast to coast."

Good news! Sort of. "The average price for a dozen Grade A eggs declined to $5.12 last month after reaching a record $6.23 in March," reports Dee-Ann Durbin of The Associated Press. "It was the first month-to-month drop in egg prices since October 2024. Overall, the average price of eggs of all sizes fell 12.7%, the steepest monthly decline since March 1984. . . . Still, retail egg prices remain near historic highs."

California farmers grow millions of pounds of
pistachios a year. (Adobe Stock photo)

U.S. farmers aren't the only ones grateful for a break from extreme U.S.-China tariffs -- Chinese pistachio lovers are also rejoicing. "Chinese consumers crave pistachios for their taste and health benefits, referring to them in a way that translates to 'happy nuts,'" reports Jim Carlton of The Wall Street Journal. "Since 2017, the value of U.S. pistachios shipped into China has shot up 20-fold from $42 million to $842 million last year, accounting for almost a third of the $3 billion crop."

Dairy trade between the United States and the United Kingdom has historically been skewed in the UK's favor; however, the new negotiation framework announced by the Trump administration "marks a crucial turning point as the U.S. seeks a level playing field with global dairy exporters," reports Karen Bohnert of Dairy Herd Management. "According to Gregg Doud, president of the National Milk Producers Federation, achieving a robust trade agreement with the UK is a vital step in correcting the current imbalances in the dairy trade."

Chickens, farmers and farm workers enjoy a reprieve from bird flu infections. (MedPage Today photo)

While not entirely explainable, "detections of H5N1 avian influenza have slowed in both animals and humans, but continued surveillance is warranted, Centers for Disease Control and Prevention researchers said," reports Kristina Fiore of MedPage Today. "Someone questioned whether there was seasonality to H5N1. . . .Todd Davis, PhD, chief of the virology at the National Center for Immunization and Respiratory Diseases, said any seasonality noted in other countries 'primarily corresponds to migratory bird patterns.'"

The first PFAS, or "forever chemicals," personal injury trial will focus on plaintiffs who allege they developed kidney cancer from firefighting foam. "The trial, set for Oct. 20, could include up to three individuals who claim their exposure to per- and polyfluoroalkyl substances (PFAS) in aqueous film-forming foams (AFFF) caused their cancer," reports Pat Rizzuto of Bloomberg Law. "In [an] effort to manage the nearly 10,000 personal injury cases that are part of the Aqueous Film-Forming Foams Products Liability Litigation MDL 2873, Judge Richard M. Gergel, with the U.S. District Court for the District of S.C., established three batches of cases involving different illnesses."

Opinion: New USDA leader says she has plans to trim the department and refocus it to help U.S. farmers and families

Agriculture Secretary Brooke Rollins said she
aims to 'get back to basics.' (USDA photo)

The Department of Agriculture traces its humble beginnings back to 1862, when it opened with a commissioner and nine employees. Since then, it has grown into "29 sub-agencies with nearly 100,000 employees, and it reported its total outlays last year at $228.3 billion," writes Sierra Dawn McClain in her opinion for The Wall Street Journal. "Agriculture Secretary Brooke Rollins aims to get back to basics."

At the time the USDA was created, "more than half of all Americans worked on farms," McClain explains. Since the 1860s, the number of U.S. citizens who "work in agriculture has shrunk to less than 2%, but the USDA reaches into every farm, national forest, rural town, grocery store and school cafeteria."

Secretary Rollins sees herself as a bureaucracy trimmer and "says her broader mission is the 'restoration of rural America,'" McClain writes. "The government tends to ignore farmers, she says, except to impose 'burdensome and costly regulations that hamper innovation.'. . . She wants to ease off, and her plan to lower egg prices, announced in these pages, exemplifies her approach — offering services to farmers without rushing to add new requirements."

Rollins also plans to remake the Forest Service, a "USDA sub-agency that manages 193 million acres of land. The service faces a fiscal crisis that Rollins attributes to unprofitable forest-management practices and Biden-era wage and workforce increases," McClain writes. Rollins told her, “This is the classic case of government gone awry." 

As far as entitlements such as the Supplemental Nutrition Assistance Program, Rollins aims to "reduce fraud, establish stricter work requirements for SNAP recipients and re-evaluate the Thrifty Food Planants," McClain adds. "She wants to make sure the program continues 'serving the families that need it the most,' and she says she grew up in such a family: She and her two sisters were raised by a single mother making $5 an hour." She told McClain: “I will do everything I can to make sure that the people that truly need that will get it."

To read more about USDA plans for bird flu management, tariff responses and Rollins' approach to working with Robert F. Kennedy Jr., secretary at Health and Human Services, click here.

A federal plan to combat avian flu has 5 parts, but scientists disagree on how effective the changes will be

Major poultry and dairy organizations back vaccine
use to control the virus. (Farm Journal photo)

The Department of Agriculture has been hard at work "hatching" a plan to contain and prevent further avian flu, also known as bird flu, outbreaks among chicken flocks. USDA Secretary Brooke Rollins "released a five-pronged strategy and investment of $1 billion to combat avian flu and reduce rising egg prices," reports Dawn Attride of Sentient Media. "The new measures focus largely on fixing on-farm biosecurity gaps as well as push for a new poultry vaccine."

A large chunk of the USDA's investment will shore up farm biosecurity by "ramping up protocols to guard against disease spillover from wildlife — at no cost to farmers," Attride explains. "The Rollins plan is light on concrete details as to what exactly the new biosecurity strategies are," but it appears the rollout will lean on a set of biosecurity protocols created in 2016 as part of the National Poultry Improvement Plan.

In her Wall Street Journal commentary, "Rollins notes that of the 150 sites that followed recommended biosecurity protocols, only one was subsequently affected by avian flu," Attride reports. The USDA plan includes using "smart perimeters" to predict and prevent the disease from infecting flocks.

Not all scientists agree that "smart perimeters" can deliver bird flu prevention. Maurice Pitesky, an associate professor and expert in poultry disease modeling at the UC Davis School of Veterinary Medicine, told Attride, "[Smart perimeters] are a pretty crude way of assessing risk." Attride adds, "What works better, according to Pitesky: accurately tracking bird movement and holistically assessing different factors — such as wind or temperature — that might drive birds into this radius."

The USDA also plans to step away from its long-held insistence that infected flocks be culled; however, experts disagree on how that change will play out. Meghan Davis, an associate professor at Johns Hopkins Bloomberg School of Public Health, would like more details on which "strategies will replace depopulation," Attride reports. Davis told her, "These stamping out policies have been in place for quite some time. There’s a reason it exists and one of them is animal welfare issues –– these birds get really sick… and [rarely] recover."

The new plan looks to incorporate vaccinating chickens against the disease. "The USDA has given conditional approval to a Zoetis vaccine H5N2 for chickens, but has yet to give the go ahead for vaccinating commercial poultry flocks against avian flu," Attride adds. But "many countries won’t accept vaccinated chickens. The U.S. is the second-largest exporter of poultry and should a vaccine be rolled out, the federal government would have to negotiate agreements with its trading partners."  

"The plan’s success hinges on industry adoption and global trade acceptance," reports Jim Wiesemeyer of Farm Journal. "Balancing effective disease control with maintaining poultry exports remains a critical challenge."

Fentanyl imports saturate U.S. illicit drug market. U.S. tariffs aim to curb its transit as fentanyl continues to kill.

The global drug problem has ended countless lives.
(Unsplash image)

More than 70% of drug overdose deaths are due to opioids, with fentanyl as the main assailant. From August 2023 to 2024, 89,740 people died from overdoses in the United States. This number is 22% less than than the year prior, according to Centers for Disease Control and Prevention projections.

Fentanyl is a synthetic opioid that is up to 100 times stronger than other opioids like morphine, heroin or oxycodone. Its main use, as approved by the Food and Drug Administration, is as a pain reliever. Often fentanyl is mixed into other drugs as a cheap way to make them stronger. According to José de Córdoba, Vipal Monga, Julie Wernau and Brian Spegele of the Wall Street Journal, “The drug is cheap to make, provides huge profit margins and is easy to smuggle.”

“President Trump has declared that the illegal transit into the U.S. of migrants and drugs, chiefly fentanyl, is a national emergency, and he has targeted Mexico, Canada and China with tariffs to force them to halt the flow,” reports the Journal.

According to the Journal, Canada responded to the fentanyl problem in 2024, saying that it would invest "$900 million over six years to improve security." China cracked down on the production and sale of fentanyl in 2019, however it continues "to produce the chemical ingredients used to make fentanyl and to sell them to drug producers in Mexico, the U.S. and elsewhere.” Mexico also said that it would increase border security to focus on preventing drugs from crossing the border.

Mexico President Claudia Sheinbaum, “whose top security concern is a war between two factions of the Sinaloa cartel, said she asked for Trump’s help in stopping the smuggling of weapons to Mexico that end up in the hands of cartels,” reports the Journal.

Drought causes transportation headaches along the Mississippi River for the third year in a row

Bridge near Vicksburg, Miss., and a pusher tug headed up
the Mississippi River. (Photo by Justin Wilkens, Unsplash)

A drying Mississippi River is causing transportation headaches and delays for the third year running in what scientists suggest could be a long-lasting change. "Extreme drought conditions in the Midwest are drawing down water levels on the Mississippi River, raising prices for companies that transport goods downstream and forcing governments and business owners to seek alternative solutions," reports Kristoffer Tigue of Inside Climate News. "The situation could signal an emerging reality for the region, scientists say, as climate change alters the planet’s weather patterns."

Despite Hurricane Francine's water dump in the Ohio Valley, Mississippi River levels have dipped since mid-July, which slows traffic. "Load restrictions force barge operators to limit their hauls, which squeezes their profit margin," Tigue explains. "Barge rates from St. Louis reached $24.62 a ton in late August and $27.49 per ton by the following week, according to the Department of Agriculture."

Moving cargo via the Mississippi River is more "efficient pound for pound than ground transportation, business groups say, and gives the U.S. an edge in a competitive global market," Tigue reports. "According to the Waterways Council, a trade association for businesses that use the Mississippi River, a standard 15-barge load is equivalent to 1,050 semi trucks or 216 train cars—meaning domestic farmers and other producers can save significant time and money moving their goods by boat."

Too much rainfall or not enough causes river transportation backups, and over the past several years, weather fluctuations in the Midwest have swung between the two. Drought conditions at harvest time are particularly troublesome. Tigue writes, "While it’s typical for water levels on the Mississippi to drop during the fall months, Mike Steenhoek, executive director of the Soy Transportation Coalition, said the recent years of drought have been a real wake-up call for farmers to diversify their supply chains."

If there's a little good news, it's that this year's drought headaches are not as extreme as those from 2023, when the Mississippi dipped to record lows. Tigue reports, "Deb Calhoun, senior vice president of the Waterways Council, chalks that up to proactive efforts this year by companies and federal agencies, like the Army Corps of Engineers, to mitigate transportation disruptions."

The number of U.S. farms has shrunk to the smallest level since 1850; many of the remaining farmers are over 65

Treehugger photo by Dan Amos via SF

The decreasing number of U.S. farms and the increasing age of the country's farmers are concerning factors for a country considered an agricultural powerhouse. U.S. farmers feed America and their exports support the country's trade surpluses with other nations. "The United States has the smallest number of farms — 1.9 million — since 1850, when there were only 31 states and four territories, said the USDA Census of Agriculture," reports Chuck Abbott of Successful Farming. "Nearly four of every 10 farmers were over 65 in 2022, when the data was collected, an abrupt surge from the 2017 census, when one in three farmers was retirement age."

During the Great Depression, there were 6.8 million farms, but "mechanization, hybrid seeds, synthetic fertilizers, and pesticides allowed vast increases in productivity while reducing the need for labor," Abbott explains. "Farm output is so large that one-fifth of production is exported."

While many Americans may think that farm families simply pass down land to their progeny, that is more a myth than a reality. As it becomes harder for farmers to turn a profit due to regulations, labor shortages and extreme weather, fewer of the next generation view farming as a viable profession. Abbott reports, "'The number of producers [age] 65 and over increased 12%, continuing the trend of an aging producer population,' said a highlight sheet for the census, describing changes since 2017. There was a 9 percent decline in the number of farmers aged 35-65 years."

Agriculture Secretary Tom Vilsack told Abbott: "The hope would be that we would continue to encourage people to get in and remain in the farming business and that we would be able to preserve our farmland. But survey after survey continues to show a decline in the number of farms and farmland." 

The Census of Agriculture is available here.
A USDA chart of farm numbers over the years is available here.

In their first 3 years, Biden has sent as much federal money to farmers as did Trump, who likes to talk about his largesse

Politico illustration

Former president Donald Trump "makes hay in farm states like Iowa by reminding farmers of how much money the federal government paid them during his presidency," but President Biden has delivered about the same in the first three years of their presidencies: $57 billion.

So reports Garrett Downs of Politico's Weekly Agriculture, adding, "Nearly half of Trump’s total $109 billion in direct payments were delivered in his final year, 2020." That's when the Department of Agriculture "paid farmers more than $52 billion, an unprecedented sum since USDA began recording farm payment data in 1933. Those tallies don’t include billions in other types of farm support, like crop insurance and loan financing — traditionally the largest types of ag subsidies."

Applying other measures, "Biden has been better for farmers than Trump," Downs writes. "Net farm income has actually gone up since the Democrat entered the White House. On average, net farm income has totaled $165 billion between 2021 and 2023, compared to $94 billion between 2017 and 2019. Farm income reached a record high of nearly $189 billion in 2022. And while it is projected to drop off in 2023 (USDA is still tallying receipts from December 2023), it remains above the 20-year average for receipts."

Looking ahead, Downs notes that Trump is proposing "a universal tariff on nearly all goods," while Biden "is telling farmers that his administration is working to distribute the recent surge in ag profits to farmers across the spectrum, not just the largest ag conglomerates." Joe Glauber, former chief USDA economist, told Downs that Trump’s proposed tariff could bring another trade war and “really hurt U.S. agriculture.”

When that happened under Trump, he used the USDA's Commodity Credit Corp. to send $28 billion in relief to farmers, but Glauber said farmers shouldn't expect another bailout. “I think that’s taking a big leap of faith,” he said. “Those were big, extraordinary payments, and I think it may be naive to think that they would be there year in and year out.”

Frequently dredging the Mississippi River helps to keep cargo moving, but places to 'stash' sand are in short supply

The Mississippi River near Wabasha, Minn., is a dredging
hotspot. (Photo by Elizabeth Flores, Star Tribune)

Frequent dredging kept cargo moving along the Mississippi this year, but moving sand from here to there has its own complications. "Historic low flows turned the Mississippi River into a construction area in 2023 as the U.S. Army Corps of Engineers dredged huge quantities of sand to keep the channel open for barge traffic," reports Chloe Johnson of the Minneapolis Star Tribune. "Massive machines like the Dredge Goetz, a 225-foot-long vessel with a suction pipe nearly two feet wide, were moving through the river constantly to keep it clear. . . . From May to July, 'day in and day out, we were digging,'" said Tom Heinold, chief of operations for the Rock Island District of the Army Corps of Engineers.

Extreme weather fluctuations make preparing waterways more difficult. Johnson explains: "A sudden drop in flow means the water in the river loses velocity, and all the sand flowing with it drops to the bottom." This year's snowmelt and sudden drought caused that scenario to unfold, with sand blocking up many expected "choke points" and clogging some unexpected areas.

Constant dredging is expensive and leaves the corps searching for places to "stash the sand." Johnson reports. "It's expensive work for the corps and the taxpayers who fund it – between surveying potential dredging areas, sucking the sand up and moving it into storage areas. The dredging program on the Upper Mississippi cost an average of $45.4 million a year between 2014 and 2023. . . . As the corps seeks new places to dump sand in the future, Sabrina Chandler, manager of the Upper Mississippi River National Fish and Wildlife Refuge, told Johnson, "I'm not sure that it's going to be a very simple fix."

While environmental advocates push for wildlife protections, the river's ability to ship remains the top concern. "It's a challenge to tease out all the impacts of dredging and sand placement. The upper Mississippi has already been chopped into 29 pools, each ending in a lock and dam to keep water high enough for shipping navigation. Since Congress required the 9-foot shipping channel in 1930, that navigation mission remains first and foremost for the corps on the river," Johnson writes. "Wildlife managers who bargain with the corps on sand placement are left looking for the least harmful scenario in a river system that has already been massively changed by human intervention across 145 years."

How low will it go? Farmers worry over Mississippi River levels and fear repeat of last year's crop-transportation crisis

Towboats line the shore near Cairo, Illinois, where the Ohio
flows into the Mississippi. (Photo by Chris Kenning, USA Today)

As the Midwest grain harvest nears, farmers are hoping for higher water levels on the Mississippi River. But as time goes on, that does not look likely, and farmers fear a repeat of last year's expensive crisis. "Last fall, drought led to about 40 days of critically low water in parts of the Mississippi that hadn't seen it in years –grounding barges, stalling traffic, blocking river ports at the height of harvest season and causing an estimated $20 billion in losses, according to AccuWeather," reports Chris Kenning of USA Today. "As this year's harvest approaches, the river is again on the decline."

How far the river will drop is uncertain, but "Mississippi water levels have been falling since June. The Ohio River, which usually has more volume than the Mississippi at their confluence, "dropped almost 10 feet in the last two weeks of August. Levels are predicted to fall farther in the coming weeks," Kenning writes. Margy Eckelkamp of Farm Journal reports, "Most notably, fewer barges are being connected to form a single unit. And barges are being loaded to lighter weight." Soy Transportation Coalition Executive Director Mike Steenhoek told Eckelkamp: "When you start diminishing both the depths that barges can sink to and the number of barges you can put together, that changes the economics of barge transportation, which certainly impacts our competitiveness. . . . It's a movie sequel that none of us wanted to watch."

"With 61% of the Midwest classified as abnormally dry or in drought as of late August, most of the Mississippi is expected to face low water in September that will most likely affect industry and navigation, according to the National Integrated Drought Information System," Kenning reports. "That's worrying farmers who ship grains such as soybeans on the river to New Orleans and, from there, around the globe – relying on lower costs that help keep it competitive for the global export market. They fear another year of backups and spiking costs that eat into profits."

The forecast doesn't look hopeful. David Welch, a National Weather Service hydrologist at the Lower Mississippi River Forecast Center, told Kenning, "Right now, there's no rainfall in sight that will turn things around." Kenning notes that nearly 60% of U.S. grain exports use barges, which are "less expensive than trains, can each carry 70 semi-trucks worth of grain. Industry officials said it's a key reason U.S. soybeans are globally competitive. Last year, stymied barge traffic meant nearby granaries filled up, leaving some farmers scrambling for more expensive or distant storage options."

U.S. farm exports jump 14% to new record, but imports of farm goods rise 19%, eating up most of trade surplus

The U.S. exported a record value of farm products in the fiscal year that ended Sept. 30, but imports of agricultural products also surged, "leaving a scant trade surplus of $2.4 billion, compared to the surplus of $8.4 billion the previous year," reports Bryan Doherty of Successful Farming.

Farm exports were valued at $196.4 billion, 14% higher than the previous record of $172.7 billion, set in the previous fiscal year, the Commerce Department said. China remained the top buyer, at $36.4 billion; Canada was second at $24.3 billion and Mexico third at $23.9 billion.

Among farm goods, soybean exports rose 26%, to $33.3 billion. Wheat was up 15%, to $8.3 billion, and corn rose 12%, Doherty reports: "Cotton had the largest increase in percentage terms, 41%, to $9 billion. Dairy, red meats and ethanol also notched large increases. But rice sales fell 10% and tobacco 27%."

Imports rose 19%, to $194 billion. "Ag imports are dominated by shipments of fruits, vegetables, nuts, wine, beer, distilled spirits, sweeteners and tropical products such as coffee and cocoa," Doherty notes.

Big oilseed traders and processors share in rising U.S. farm profits, but face challenges of low water, strong dollar

"Two of the largest farm giants that dominate global grain trading and processing, Archer Daniels Midland Co. and Bunge Ltd., said this week that despite fears about a recession, demand for their grain, biofuels and livestock feed is strong," Patrick Thomas reports for The Wall Street Journal. 

"Higher energy prices are boosting demand for the oilseed processors’ biofuels," Thomas notes. "Russia’s invasion of Ukraine has disrupted supplies from one of the world’s top grain-exporting regions, pushing up prices for wheat and corn. Bad weather hitting other big crop-producing countries is also squeezing stockpiles, and agriculture executives have said at least two good crop years in North and South America will be needed to relieve a tight food supply."

Both ADM and Bunge reported sizable increases in profit that exceeded Wall Street analysts' expectations.  The Chicago Board of Trade prices for wheat are up about 12 percent over the past 12 months, corn is up around 26% and soybeans increased about 12%. 

"Global grain traders are also contending with a strong U.S. dollar and lower water levels in the Mississippi River that are hurting grain exports from the U.S," Thomas writes. Some grain elevators on the river have stopped accepting deliveries. Despite the hearty demand for U.S. farm exports, "ADM said that lower water levels in the Mississippi River will cut its soybean export volumes in North America this year, and corn exports from North America will likely be delayed until the first quarter of 2023." Some global buyers are going for rice instead of U.S. grain due to the strong dollar.

Ukraine conflict raises grain, energy prices; fertilizer next?

Russia's recognition of two separatist Ukraine provinces as independent countries, and its military move into the region, could presage a full-scale war that is already affecting world markets for grain, energy and fertilizer.

"With the two countries accounting for around 29 percent of global wheat exports, 19% of world corn supplies, and 80% of world sunflower-oil exports, traders worried that any military engagement could impact crop movement and trigger a mass scramble by importers to replace supplies from the Black Sea region," report Naveen Thukral and Gavin Maguire of Reuters, "Chicago wheat futures jumped more than 2% on Tuesday, corn hit a seven-month high and soybeans also gained ground." 

Reuters quoted an unnamed trader as saying that ships are avoiding the Black Sea, but Bloomberg reported that "Cargoes are flowing freely and there's no indication of significant disruptions."

Fertilizer prices, already at record highs and threatening farmers' profit margins, may increase even more because Russia is a major exporter of fertilizer. "If Russia invades Ukraine, and the U.S. and other North Atlantic Treaty Organization countries retaliate with trade sanctions, that could cause shortages and drive up prices," Andrew Ozaki reports for Omaha's KETV.

The Associated Press reports that Agriculture Secretary Tom Vilsack said Saturday that "American wheat farmers will boost production and prevent supply chain problems in the event that a possible Russian invasion of Ukraine chokes off agricultural exports from the global grains powerhouse."

Vilsack to speak at webinar Monday on the supply-chain crisis in U.S. agriculture exports and how to fix it

Agri-Pulse will host a free webinar at 1 p.m. ET Monday, Jan. 31 to discuss how supply-chain problems are hurting American agriculture exports and what can be done about it.

The webinar includes two discussion panels: one featuring policy experts and one featuring industry experts. Krysta Harden, president and CEO of the U.S. Dairy Export Council, which Vilsack headed between stints as USDA secretary, will moderate a panel featuring the following policy experts:

• Agriculture Secretary Tom Vilsack
• White House Ports Czar John Porcari
• Rep. John Garamendi, D-Calif.
• Rep. Dusty Johnson, R-S.D.

Jaime Castaneda, executive vice president of policy development and strategy at the National Milk Producer Federation will moderate an industry panel featuring the following guests:

• Mike Durkin, president and CEO of Leprino Foods
• Andrew Hwang, manager of business development and international marketing at the Port of Oakland in California
• Jon Eisen, director of the Intermodal Motor Carriers Conference at the American Trucking Association

The event is sponsored by the National Milk Producers Federation and the U.S. Dairy Export Council. Click here for more information or to register.

Retaliatory tariffs during trade war led to $27 billion in lost agricultural exports by end of 2019, USDA report concludes

Percent share of estimated annual losses caused by
retaliatory tariffs, by commodity. (USDA chart)

The Trump administration's trade wars with China and other nations led to a significant reduction in U.S. agricultural exports, a loss of more than $27 billion from 2018 through the end of 2019, according to a new report from the Agriculture Department's Economic Research Service.

The federal government tried to make up for the loses with $28 billion in payments, but the payouts weren't always equitable; corn farmers were paid too much, the Government Accountability Office concluded. Yet, soybeans were the hardest-hit commodity, accounting for nearly 71% of losses, or $9.4 billion annually, the ERS report says. The next largest annualized losses came from sorghum ($854 million), and pork ($646 million).

China accounted for about 95 percent of the losses, or $25.7 billion, followed by the European Union ($0.6 billion), and Mexico ($0.5 billion). Tariffs from Canada, Turkey and India accounted for smaller losses. The U.S. and China signed a trade agreement in January 2020, but China did not fulfill its commitment to buy $80 billion in U.S. agriculture, seafood and other food exports by the end of 2021. Through November 2021, China had only purchased $56.3 billion.

Rural Midwestern bankers still optimistic about economy, but worry about drought, hiring shortages, and infrastructure bill

Creighton University chart compares current month to last month and year ago; click here to download it and chart below.

A July survey of rural bankers in 10 Midwestern states that rely on agriculture and energy showed slightly declining but still strong optimism about the economy, with the overall Rural Mainstreet Index falling slightly to 65.3 from July's 65.6. The index is a survey of bankers in about 200 rural communities with an average population of 1,300 in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

Record-low interest rates, solid grain prices, and growing exports are key to rural economies in the areas surveyed. Agriculture Department data show that 2021 agriculture exports are more than 25 percent higher than from the same period in 2020, reports Creighton University economist Ernie Goss, who compiles the index.

The home-sales index hit a record 84.4 from July's 77.4, while the retail-sales index dropped from July's 64.1 to a still-positive 54.7. The farmland price index rose to 76.6 from July's 71.0, marking the first time since 2012-2013 that the survey has recorded 11 straight months above growth neutral. The farm equipment sales index declined to 64.7 from July's 67.2, but the readings over the past several months have represented the strongest consistent growth since 2012, Goss reports.

However, the confidence index for local economies six months out fell to 59.7 from July's 65.6. That reflects bankers' worries about drought, rising coronavirus infections, political turmoil in Afghanistan, and widespread dislike among the surveyed bankers about the $3.5 trillion social-infrastructure spending bill before Congress. Only 9.4% of surveyed bankers support the bill (see chart below). And, though the new hiring index rose to 70.3 from July's 67.6, many bankers worry about continuing labor shortages that hinder rural businesses' growth.

USDA announces African swine fever plan

The U.S. Department of Agriculture announced Friday a plan to deal with African swine fever if the fatal disease shows up in the United States. If a hogs in the U.S. tests positive for the disease, the USDA will halt all hogs shipments for at least three days, according to a press release. That would prevent farmers from delivering hogs to slaughterhouses.

The U.S. government is trying to "avoid the type of devastation seen in China, where the disease has reduced the herd by more than 40 percent and pushed pork prices to record highs. Since the China outbreak, African swine fever has broken out in 10 countries in Asia," Tom Polansek reports for Reuters. An outbreak could devastate the nation's $7 billion pork export market, especially when it's poised to become the largest export to China.

If an infected hog is detected, the USDA will lead a coordinated effort with state governments and the pork industry to contain the spread of the disease. If a farmer has an infected hog, the USDA recommends slaughtering it, then burying or composting it. "To reduce paperwork, USDA plans to pay for virus elimination at a uniform, flat rate, based on the size of affected premises," according to the press release.

Trump tells farmers more trade aid coming soon; Perdue says they hope and expect that will be the end of it

On Sunday President Trump spoke at the American Farm Bureau Federation's annual convention, promising farmers that they will soon get a final round of $3.6 billion in trade-war compensation, though trade deals have been signed meant to spur agricultural export sales. He noted that farm income increased in 2019, greatly aided by the federal Market Facilitation Program payments, and predicted, "The big stuff is yet to come," Chuck Abbott reports for Successful Farming.

Agriculture Secretary Sonny Perdue said Monday that the payments "didn’t have a timeline on when the third MFP payment would be coming, other than to say it is assured and imminent," Successful Farming reports. Perdue said the Trump administration is “hoping and expecting” that recent and upcoming trade deals will make further payments unnecessary.

"So far, producers have received $10.8 billion to offset the impact of the Sino-U.S. trade war on 2019 crops and livestock, on top of $8.6 billion in cash for 2018 production," Abbott reports. "A decision whether to release the final tranche of $3.6 billion, depending on market conditions and the state of trade negotiation, was due this month."

The Agriculture Department's recent Farm Income Forecast said direct government payments, mostly MFP funds, accounted for almost a quarter of all farm income, the largest share in over a decade, and a high-interest alternative lender was the single largest beneficiary of those payments.

Farmers are an important demographic for Trump, and one he wants to keep happy. "Farmers, who are often social and fiscal conservatives, voted for Trump in landslide numbers in 2016. Trump remains highly popular in farm country, partly because of tax cuts, regulatory relief, and support for corn ethanol," Abbott reports. "In a 2019 study by the Center for Agricultural and Rural Development, farmers in three Midwestern states said the trade war hit them in pocketbook but they agreed with Trump that it was important to end predatory trade practices by China – seeing it as short-term pain for long-term gain. Most of them said the trade-war payments were helpful."

Though the Trump said that the Phase I deal with China and the soon-to-be-signed USCMA deal with Canada and Mexico will "massively boost exports," some trade analysts are skeptical that U.S. exports can be rebuilt quickly enough to hit the $40 to $50 billion a year level required by the China deal. "The National Farmers Union, the second-largest farm group, said the trade war 'bruised our (U.S.) reputation, making other trading partners reluctant to work with us,'" Abbott reports. "The U.S. International Trade Commission has estimated that trade with Canada and Mexico will grow by 1% under USMCA."

In new trade deal, China keeps tariffs on U.S. farm goods but promises to buy more over next two years

Chinese and U.S. officials signed the first phase of several planned trade resolutions Wednesday at the White House. The agreement has more than 50 agriculture-related commitments, including a faster approval process for biotech crops and tariff exclusions for many U.S. commodities.

"The pledged changes will remove obstacles for U.S. ag exports from beef, pork, poultry and seafood to avocados, blueberries, pet food and hay," Ryan McCrimmon of Politico's Morning Agriculture reports. "China won’t lift any of its retaliatory duties on American farm goods, which total $110 billion, but the new tariff exclusions will facilitate an uptick in agricultural purchases from U.S. producers."

China promised to buy about $40 billion in U.S. farm products this year and next year, contingent on market conditions. "Beijing had balked at committing to buy set amounts of U.S. farm goods earlier, and has inked new soybean contracts with Brazil since the trade war started," Ryan Woo and Jeff Mason report for Reuters. "Although the deal could be a boost to U.S. farmers, automakers and heavy equipment manufacturers, some analysts question China’s ability to replace imports from other trading partners with more shipments from the United States."

Another possible issue: if China reneges on its promises, the deal allows the U.S. to again put tariffs on Chinese goods. "But according to the text, if the offending party disagrees with such a result, its only recourse is to quit the agreement. There are no provisions for appeal or levying retaliatory tariffs," David Lawder reports for Reuters. "Trump administration officials insist that they have set up a robust process for resolving disputes, with each country opening an enforcement office to field and review complaints about compliance. Those grievances will be aired through a series of consultations with escalating levels of officials over a roughly 90-day period before penalties can be levied."