President Donald Trump’s so-called tariff war with other countries was supposed to bring in billions of new dollars of revenue and benefit all sectors of the U.S. economy. The first might be occurring, but the impacts of the tariffs at home are outweighing any benefits.
The beef sector is among the agricultural sectors that have been worst impacted. That is because China slapped tariffs on U.S. beef and pork exports last April and did not renew plant registrations for nearly all facilities involved in exporting beef to China. So, no U.S. beef has got into China since mid-May.
Most other U.S. agricultural sectors are also suffering under the tariffs, as Jacqui Fatka, lead economist for farm supply and biofuels at CoBank, said at the recent North American Millers’ Association annual meeting. New tariffs impacting agriculture are squeezing U.S. farmers and hoisting government assistance payments, she said.
Currently, tariffs levied by the administration under the International Emergency Economic Powers Act average more than 12% across key U.S. agricultural inputs, Fatka said in an agri-food policy update at the meeting. Double-digit tariffs have been implemented on pesticides, herbicides, insecticides, fungicides, fertilizer, tractors and self-propelled machinery, agricultural machinery and parts, and seeds, with levies of nearly 9% on phosphate and 8% on nitrogen.
The tariff increases for U.S. agricultural input imports have led to effective tariff rates of 44% on imports from India, 26% from China, 21% from Switzerland, 15% from South Korea, 14% from Japan, 14% from the European Union and 6% from the United Kingdom, according to CoBank. “This is all around the world—all of our ag inputs are now faced with increased uncertainty and changes,” Fatka said. “And that is creating a 12% increase on the overall tariff on these prices. So, a lot of uncertainty. We don’t know how long those are going to last, if they get switched, if they get changed.”
At present, agricultural trade with Mexico and Canada remains subject to the U.S.-Mexico-Canada Agreement, though concerns have risen recently that Trump may seek to revamp that pact. Fatka noted the importance of Mexico and Canada—as well as China, the third-largest U.S. trading partner—to U.S. agriculture. Among agricultural commodities, the three nations combined account for more than 70% of corn, 60% of soybean, 50% of pork, 45% of poultry and dairy, 30% of beef and 25% of wheat U.S. exports, CoBank estimated.
“Tariffs impact all of agriculture,” Fatka said. “This is just our major three major buyers: China, Mexico and Canada. We can’t live without them. We need to make sure that we review—not renegotiate—the USMCA. A lot of concerns from the industry about that.”
Trade uncertainty is cutting into exports of some crops, Fatka noted. Year over year, U.S. crop and derivatives exports are down between more than 20% and nearly 100% in rice, cotton, grain, sorghum and rye, and are down by less than 20% in miscellaneous grain, feed, soybeans, tree nuts and dried beans, based on USDA Foreign Agricultural Service data reported by CoBank. Meanwhile, U.S. exports are up more than 20% in oats and corn and have increased less than 20% in wheat flour, ethanol, barley, soymeal and wheat.
Overall, about 23% of U.S. non-manufactured agricultural products are exported, led by food grains and oilseeds, while 21% of U.S. manufactured agricultural products are exported, led by grain and oilseed milling products, according to USDA data cited by CoBank.
“We’re seeing a lot of shifts in what we’re able to export,” Fatka said. “We’re seeing an increase in corn and oats (exports) this year, but not as many. Grain sorghum is down considerably, and soybeans (is down) as well.”
Looking at the health of the U.S. farm economy, Fatka said most major U.S. farm production input expenses also have climbed—including labor, animal units, seed, property tax and rent—for the 2024-25 period, based on USDA data. Expense areas indicating decreases over the period include feed, interest, fertilizer, pesticides and fuel/oil. “We’re looking at record-high input costs for major crops, and some (others) near record highs,” Fatka said. “And for production expenses, we have a lot of increases here.”
CoBank expects U.S. net farm income to climb more than 40%, or about $52 billion, to $179.8 billion for 2025, based on USDA data. Reflected in the gain are income of $30.4 billion in government payments, $30 billion in animal product receipts, $8.1 billion in crop inventory adjustment, $1.3 in animal inventory adjustment and $300 million in other income, minus $12 billion in production expenses and a $6.1 billion decrease in crop receipts. “On the crop side, livestock’s gain is the grain producer’s pain,” Fatka said, referring to the general inverse relationship between those commodities. — Steve Kay, WLJ columnist
(Steve Kay is editor/publisher of Cattle Buyers Weekly, an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707-765-1725. Kay’s Korner appears exclusively in WLJ.)
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