Weathering the tariff storm: Smart strategies for grain farmers

Grain farming in America doesn’t happen in a vacuum. As a corn, soybean, or wheat producer, your success is deeply tied to global markets. Tariffs, whether imposed by the U.S. or in retaliation by trading partners, can have significant effects on your prices, input costs, and long-term planning. This article breaks down what you need to know right now, how tariffs may affect your bottom line, and what history can teach us.

U.S. Agricultural Output: Export vs. Domestic Consumption

Understanding the distribution of U.S. agricultural products between export and domestic markets is crucial for assessing the sector’s exposure to international trade policies:

• Overall Export Share: Between 2013 and 2022, approximately 23% of the output of non-manufactured agricultural products in the U.S. was exported. This includes commodities like soybeans, beef, dairy, cotton, corn, and tree nuts.

• Commodity-Specific Export Shares:‍
  
  • Soybeans: Historically, soybean exports have constituted a significant portion of U.S. production. For example, in 2016, exports accounted for 50% of production. However, this figure dropped to 40% in 2018 due to retaliatory tariffs from China but rebounded to 53% in 2020.‍
  • Wheat and Rice: These food grains have high export shares, with exports accounting for 40% or more of their total market value.‍
  • Export Value: In 2023, U.S. agricultural exports reached $174 billion, up from $57.3 billion in 1998, indicating a steady growth over the past 25 years.

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What Historic Context Can Be Used with Tariffs and Their Impact on Farming?

Tariffs have long been a lever of U.S. policy, and history shows how impactful they can be, especially for commodity producers.

Key Historical Moments:

• Smoot-Hawley Tariff Act (1930): This infamous policy triggered global retaliation during the Great Depression. American agricultural exports plummeted, deepening the crisis for struggling farmers.
• Reagan-Era Grain Embargo (1980): A response to the Soviet invasion of Afghanistan, this embargo caused long-term damage to U.S. grain exports to the USSR and opened the door for South American competitors.
• Trump-Era Trade War (2018–2020): Tariffs on Chinese goods (and retaliatory Chinese tariffs on U.S. ag products) disrupted soybean, sorghum, and pork markets. Farmers relied on billions in aid to stay afloat.

While tariffs often pose challenges for agricultural sectors, there are scenarios where they have inadvertently benefited grain farmers:

• Stabilization of Corn Prices: In early 2025, despite a general downturn in commodity markets due to new tariffs, corn prices remained stable and even saw a slight increase to $4.60 per bushel. This resilience was attributed to Mexico, the largest importer of U.S. corn, not being subjected to the new tariff measures, thereby sustaining demand. Additionally, concerns over potential soybean price declines led farmers to shift towards corn production, bolstering its market position.
• Government Support Programs: In response to the adverse effects of tariffs, the U.S. government has historically implemented aid programs to support farmers. For instance, during the 2018-2019 trade tensions, the USDA’s Market Facilitation Program provided $23 billion to offset export losses resulting from retaliatory tariffs. Such interventions have offered financial relief to grain farmers during turbulent trade periods.

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How Might Tariffs Impact My Farm This Year?

When countries use tariffs as a policy tool — whether for national security, economic leverage, or political pressure, agriculture is often caught in the crossfire. This results in high volatility and inevitably stress. The key to weathering the storm is know what to expect and having a plan in place to optimize your strategy in the areas you can control.

Short-Term Effects on Grain Farmers:

• Export Markets Could Shrink: If major buyers like China or Mexico face tariffs on U.S. grain, they may turn to Brazil, Argentina, or Ukraine. This reduces demand for American grain, pushing prices lower.
• Input Costs May Rise: Many fertilizers, pesticides, and machinery components are imported. Tariffs on these goods increase costs for farm operations.
• Increased Volatility: Tariffs introduce uncertainty in futures markets, making it harder to plan pre-harvest marketing or hedge risk effectively.

Example: During the U.S.-China trade war in 2018–2020, soybean exports to China dropped by over 70% in one year, contributing to significant price declines and financial stress for producers in the Midwest.

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Tariffs Imposed on US Agricultural Products (as of 4/16/2025)

What Can Farmers Do?

While individual farmers can’t change national policy, they can prepare for uncertainty, and that preparation can make all the difference in a volatile season.

Here are some ways to leverage resources to the best of your ability:

• Diversify Your Marketing: Partner with your grain merchandiser to find multiple buyer options, including local processors, ethanol plants, or feed mills. A wider net can help soften the blow if exports dip.
• Don’t Try to Outguess the Market: Volatility can tempt risky moves. Instead, set realistic price targets in advance so you’re ready to act when rallies pop up. Profit may be slim this year — but even a small win is a win.
• Sharpen Cost Control: Keep a close watch on every input. Fertilizer, fuel, and field passes are big-ticket items worth reviewing. Reducing trips across the field or delaying equipment upgrades can add up. Some growers are even trimming back on fertilizer to conserve cash.
• Improve Efficiency: In tough times, operational discipline pays off. Optimize planting plans, manage inputs with precision, and tighten up logistics to get more out of every dollar.
• Stay Informed: Keep tabs on trade talks and global developments. Understanding where the wind is blowing helps with timing your grain marketing and making smart financial moves.
• Advocate for Agriculture: Consider joining or supporting producer groups that have a seat at the table in policy discussions. Your voice matters — and collective pressure helps shape future trade policy.
• Plan for the Worst, Hope for the Best: Many growers are in survival mode this year — and that’s okay. A conservative mindset now helps ensure you’re still in the game when better seasons return.

Conclusion

Tariffs may seem like an abstract policy issue, but their effects are real and immediate for grain farmers. Whether in the form of reduced export demand or higher input costs, the ripple effects of trade disputes can hit your operation hard. Understanding the risks, and preparing for them, is essential to protecting your farm’s profitability and legacy.

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