Farmers face steep losses in the middle of Trump's trade war and funding cuts
Jennifer Gilkerson never imagined that her West Virginia farm’s freeze-dried fruits would get caught up in political fights in Washington, D.C.
But last Friday, she learned that funding for a U.S. Agriculture Department program that helps schools and food banks buy products from local farmers like her had been cut. Without those federal dollars, Gilkerson no longer expects local schools to be able to buy her freeze-dried fruits, which she has already spent thousands of dollars preparing to produce.
“We’re just in such a state of shock. We just don’t really even know how to respond to all this. We thought that this was sacred and really untouchable,” Gilkerson said. “Everyone thinks all farmers voted for this, but we did not vote for this.”
From funding cuts to tariffs, farmers have found themselves caught in the middle of President Donald Trump’s escalation of trade wars and efforts to slash billions of dollars in spending, leaving a growing number now struggling to find markets for their products and facing the risk of steep losses for the year ahead.
Trump has acknowledged the impact his trade policies will have on farmers, telling them in his address to Congress this month that there will be “a little bit of an adjustment period” and that farmers will have to “bear with me again.” When it comes to spending cuts at the Agriculture Department and other agencies, Treasury Secretary Scott Bessent said in a CNBC interview this week, the current federal spending levels are unsustainable and there will have to be a “detox period” for the economy as cuts are made.
But farmers across the country — from small organic berry growers in Maine to large-scale hog producers in Iowa — say those policy changes could cripple their businesses if they aren’t resolved soon, wreaking long-lasting damage on the U.S. agriculture industry.
“I think any farmer will tell you that we will take some short-term pain, but do not make this a long-term extended trade war, because that just won’t be good for agriculture or for the country in general,” said Bob Hemesath, an Iowa farmer who grows corn and raises hogs. “I know that this is the way President Trump believes he’s going to create better markets long term. I hope he’s correct. But my fear is that once you lose those markets to other suppliers, it’s very hard to get them back.”
U.S. farmers depend on exporting their products because for many products, like corn, the country produces more than it is able to consume. Foreign buyers are also more willing to buy agricultural products people in the United States don’t want, like chicken feet or cow tongues.
But those overseas markets are now in question as Trump threatens to ratchet up the amount of tariffs charged on products being shipped into the United States — a move that is already causing other countries to retaliate with their own tariffs on U.S. goods.
"I've been at this for 45 years, and for all of those years, any time there is a trade dispute with another country, they recognize that our soft underbelly, where we really get sensitive, is when you start messing with our food exports," said Chuck Conner, head of the National Council of Farmer Cooperatives. "That has always been the case, and that is the case this time around on steroids."
Farmers say they are already seeing the effects after Trump put an additional 20% tariff on Chinese imports, after which China responded with an additional 10% to 15% tariff on U.S. agriculture products, including pork, wheat and corn.
After Trump briefly placed a 25% tariff on all imports from Canada last month, cattle farmers in Maine got notices that their grain prices would be increasing 15%, said Sarah Alexander, executive director of the Maine Organic Farmers and Gardeners Association. Trump later walked back some of the tariffs, but he also warned that more are to come. A farmer also told Alexander that his price quote for a greenhouse shot up this week after Trump put a 25% tariff on all steel and aluminum imports.
“Consumers are going to see these impacts if farms are not able to carry through with their plans or their costs increase dramatically, whether it’s in what products are actually available this year or that the cost is going to have to go up because farmers can’t shoulder all of those changes themselves,” Alexander said.
Tariffs hit amid issues with federal aid
Federal funding cuts and freezes, along with staffing shortages at the Agriculture Department, have also been rippling across the U.S. agriculture industry. Farmers say they rely on grants and loans from the Agriculture Department to help make their products more affordable for U.S. consumers and weather the natural volatility in the market for agriculture commodities.
As Gilkerson tries to figure out a new market for her farm’s freeze-dried fruits, another group of West Virginia farmers has also been caught up in funding cuts to a separate Agriculture Department program to help promote local foods.
A group of farmers had been working to launch a brand of West Virginia-grown products called Appalachian Cellar. After months of work, they were preparing to begin distributing the brand to grocery stores and other food distributors when the Agriculture Department told them their funding had been cut off as of Jan. 19, the day before Trump entered office.
“I’ve got 31 farmers who are pissed off,” said Spencer Moss, executive director of the West Virginia Food and Farm Coalition, who was working on launching the line of products. “We are rounding the corner into the planting season, and we are supposed to be ramping up, but we are not. We are unable to ramp up.”
Not only will the group not be getting funding going forward for expenses it had coming up, but it’s unclear whether it will get reimbursed, as planned, for $100,000 in expenses related to the grant it had already paid for, Moss said.
“This is the economy of rural America. West Virginia is a wholly rural state, and so developing this agriculture economy in the state is extremely important,” she said. “These farmers pay their property taxes, they’re business owners, a lot of times they’re commissioners or school board members. These are the drivers that keep rural communities alive. So it feels like a divestment in rural communities across the board.”
Seth Kroeck, a blueberry farmer in Maine, said he received a $50,000 grant to spread 200,000 cubic yards of mulch on his wild blueberries to help improve his crop yields. He has the truck, the fuel and the manpower lined up to spread the mulch and has to get started in the coming weeks as the planting season gets underway.
But he’s unsure whether he will actually get reimbursed by the Agriculture Department, because he knows of several other farmers still waiting to get paid for equipment they purchased under Agriculture Department grants.
“It has really sent a chill among a lot of farmers,” Kroeck said. “You sign a contract with the USDA, you expect that they’re going to pay on it. You would never expect that they’re not going to fulfill their end of the deal. It makes me worry in a broader sense about where we’re heading. So much of what we do with each other is based on that basic trust, and to have that be shattered is very, very worrisome.”
There’s uncertainty as farmers are trying to make decisions at the start of the planting season in many parts of the country.
In Virginia, John Boyd is unsure whether his loan from the Agriculture Department will come through in time for him to buy the seeds he needs to begin planting his soybean crops for this year. Boyd typically gets an Agriculture Department loan in the spring to help cover some of the cost of planting until he can harvest the crops in the fall and use the proceeds to repay the loan.
But so far, the loan money hasn’t come through, and he has been unable to get any update from the Agriculture Department about whether or when it will be available. With just days until he needs to start putting his seeds in the ground, Boyd said, he’s urgently trying to negotiate a payment plan with his seed supplier or find another way to finance the expense.
“It’s planting season, and there’s a cloud of uncertainty among the agriculture industry with this president,” said Boyd, who is president of the National Black Farmers Association. “I’ve got real debt; I’ve got real expenses. But I also have the will to farm in some sort of way. I can’t tell you how, but I am making calls and trying to put some things in place to get through this crisis the president has put us in.”
Soybean prices, which have already been falling amid a glut of supply in the market as production has ramped up globally, have been tumbling in recent years, and he worries they will fall further in a trade war with China.
“What’s alarming here to me as a leader in the farm community and civil rights work is that it’s the farmer that is the first getting affected, and it was the farmer that delivered for this president,” Boyd said. “They were all in for Trump, and they are the first in line to be affected.”
Prices for soybeans, like other agricultural products, including corn, wheat and pork, are set not by the individual farmers but by a wider commodities market, which factors in the global supply and demand. If demand for U.S. agriculture products from a major buyer, like China, goes down as a result of tariffs, so can the price.
“In order to get a fair price, you need a good, steady market, and the president is disrupting the market,” Boyd said.
Farmers have been through Trump’s trade wars before in 2018 and 2019, when he imposed tariffs on China, which retaliated with its own tariffs on U.S. farm products, sending sales tumbling. In response, Trump set up a payment program during his first term to compensate some of the affected farmers. The amount of payments doled out was about equivalent to the revenue the United States collected from the tariffs on Chinese imports.
Trump hasn’t said whether he will implement a similar payment plan again. Commerce Secretary Howard Lutnick said Trump’s moves are intended to improve the longer-term picture for farmers by ultimately creating a more level playing field overseas.
“He understands that the best way to get our farmers, our ranchers and our fishermen's produce and products in the rest of the world — which they block, India blocks our farmers, all these countries block our farmers — the way to grow it is to make deals with them where they have to understand the power of the U.S. economy,” Lutnick said in a Bloomberg TV interview Thursday.
In the meantime, farmers are trying to figure out how to pay for their current bills and how to cut costs to lessen their losses.
In Iowa, Hemesath, who is on the board of the National Corn Growers Association and president of Farmers for Free Trade, said he’s bracing for the possibility of losing money on his crops this year if there is no change in policy in the coming months.
“We’re used to the ups and downs in the markets. There’s no doubt about that, but we need to be looking for more markets and building on the markets that we already have,” he said. “So long term, we definitely have to get this resolved to stay viable.”
This article was originally published on NBCNews.com