Across the United States, harvesters are beginning to scythe their way through fields of crops. How well or badly the harvest goes has traditionally been a farmer’s make-or-break moment, but this year there is another concern. “Nothing’s moving,” says Darin Johnson, a farmer who serves as president of the Minnesota Soybean Growers Association. America’s farmers are on the front line in the trade war, and they are taking casualties.
Blowback
Last year, China bought $12.6 billion of soybeans from the United States, around 25 percent of the country’s total crop. This year, the Chinese have halted these purchases in retaliation for President Trump’s tariffs, opting for South American producers instead. China has not ordered a shipment of American soy since May and, last month, it announced that it would be buying no soybeans from the United States this fall.
The disappearance of this market is forcing many farmers to pay to store their crops or sell them at reduced prices. Either represents a financial hit.
These costs of the trade war are being felt especially heavily in Minnesota, which produces the third-largest soybean crop in the United States after Illinois and Iowa. Soybean exports in Minnesota account for over 25 percent of the state’s total exports, around $2 billion in sales annually. The state’s 26,000 soybean farmers send 60 percent of their produce overseas with China as their leading market. These were the state’s number one agricultural export.
Joel Schreurs, a Minnesota farmer who serves on the US Soybean Export Council executive board, explains that “the cash flows don’t work for this coming year. I mean, you’re showing at average yield and average expense anywhere from $150 to $200 deficit per acre.” The state’s Agriculture Commissioner, Thom Petersen, explains: “We have a lot of soybeans. We’re gonna have a big harvest. We need somewhere for them to go. And we’ve worked years to build relationships and build those markets. So it’s kind of frustrating to not have that market that’s been there for us and China is a big bucket.”
The shock from the new trade war comes on top of longer-standing pressures on American farmers. A decade ago, Minnesota sold one out of every three rows of soybeans to China, the Minnesota Soybean Growers Association says: Since the tariff war of 2018 and 2019, the state now sells only one out of every four rows. “[W]e’re coming up on about three years of negative profitability,” Minnesota Farm Bureau President Dan Glessing explains. “If you look about a year ago, prices are similar; they’re still not at a profitable range.”
And then there are issues of the kind which crop up every year. Low water levels on the Mississippi River are driving up barge rates which makes transporting soybeans on the river more expensive and pushes up the cost of agricultural inputs like fertilizer and herbicides that travel on the river.
But the shock of the trade war in addition to these pressures has pushed many farms over the edge. The Minnesota Department of Agriculture reports that the number of farmers in the state entering mediation due to financial hardship has increased sharply this year and the Minneapolis Federal Reserve reports that farm bankruptcies in the Upper Midwest have increased from last year.
Government to the Rescue
The Trump administration acknowledges these problems. “Right now, the farm economy is not in a good place,” Agriculture Secretary Brooke Rollins said last week. With 78 percent of American farmers estimated to have voted for President Trump in 2024, it also feels the necessity to act. “We’re working around the clock,” Sec. Rollins claims.
The administration could just roll back the tariffs which have exacerbated agriculture’s underlying pressures. Congress could assert its power to tax. Instead, having hobbled the country’s farmers, federal government officials are now scrambling to offer them a Band-Aid.
Rep. Glenn “GT” Thompson, Chair of the House Agriculture Committee, has proposed federal financial relief for distressed farmers. Senate Majority Leader John Thune — from South Dakota, where farms account for the highest share of state GDP in the United States — has also floated the idea of a federal aid package. Both have suggested that revenues from the tariffs which have provoked this situation could be used to ameliorate their effects.
President Trump, who dished out more than $22 billion in aid payments to farmers in 2019 to offset their losses during his first trade war with China, says he’s planning a $10 billion aid package for soybean farmers.
But Vincent Smith, who directs the American Enterprise Institute’s Agricultural Research Program, argues that: “It is the larger farms that will really benefit from the bailout, because the bailout will be tied to the size of the farm’s production” so that “If you’re 10 times bigger than me as a farm, you will get 10 times the size of the payment that I get.”
The Government Accountability Office estimates that seven percent of farmers received about 60 percent of USDA financial assistance available from fiscal year 2019 to 2023, with the rest receiving only about $12,000 per producer.
Farmers would prefer trade to handouts. Matt Purfeerst, a corn and soybean farmer in Faribault, Minnesota, told local station WCCO: “A Band-Aid is great, but you don’t want to impact or damage that relationship long term, whatever the long-term implications might be from losing that [market].” Farmers are working hard to find new markets, like Thailand and Vietnam.
The pain felt by America’s farmers as a result of the tariffs is frequently justified by their supporters with the argument that it is “short term pain for long term gain.” This argument would carry considerably more weight if those making it could outline exactly what these gains are and when they might begin to materialize. “The golden age for our American farmers is around the corner,” Sec. Rollins announced last month. It will need an end to this trade war to get there.