OMAHA, Neb. — Farmers and meat producers in the United States brace for a challenging period as new tariffs imposed on Mexico, Canada, and China threaten to significantly impact their profits. The retaliatory measures from these countries could potentially lead to billions in losses if the tariffs remain in place for an extended period. As a result, consumers might soon notice a rise in prices for produce and ground beef.
However, while some impacts on farmers may be delayed until the next harvest season, there is a possibility of short-term relief for consumers with certain products becoming cheaper if exports decline. It’s important to note that the cost of grains like corn, wheat, and soybeans comprises a small portion of the overall price of many end products. President Donald Trump could potentially counter some of these losses with aid payments similar to those distributed during his previous trade conflict with China.
Addressing Congress, Trump highlighted the adverse effects of agricultural imports on American farmers, urging them to stand by him as he endeavors to protect their livelihoods. “I love the farmer,” he declared, although he did not specify any new aid measures. Concerns over the tariffs’ effects are not unfounded, as they may discourage farmers from investing in costly equipment and lead consumers to cut back on spending, which could hinder overall economic growth and potentially usher in a recession. Already, consumers are uneasy about soaring egg prices due to a bird flu outbreak.
The economic outlook hinges on consumer confidence, according to Glynn Tonsor, an agricultural economist at Kansas State University. He noted that tariffs could slow down consumer spending on everyday goods and activities, affecting overall economic vitality. Meanwhile, some farmers are proactively acquiring equipment and supplies in anticipation of price hikes, though stockpiling practical resources like fertilizer in advance is not always feasible. Similarly, consumers face difficulty in storing perishables like avocados or ground beef.
The impact of tariffs will depend on how they are implemented and whether any products are exempt. Joe Janzen, an agricultural economist from the University of Illinois, highlighted that prices for corn and soybeans have already dropped by about 10% since the tariffs were announced, eroding profitability. He expressed skepticism over Trump’s suggestion that domestic markets could make up for lost exports, as the U.S. doesn’t have the capacity to consume the surplus of crops typically exported.
Farmers are also contending with potential increases in fertilizer costs since 85% of the potash used in American fertilizers is imported from Canada. Corey Rosenbusch, CEO of The Fertilizer Institute, stressed the importance of a stable trade environment between the U.S. and Canada. Though many farmers applied their fertilizers last fall, the heightened costs might affect them later, according to Iowa State agricultural economist Chad Hart.
In terms of meat pricing, imported lean beef—essential for making hamburger—will become more expensive due to tariffs on Canadian and Mexican products, likely resulting in higher grocery prices in the next month or two. With significant exports of chicken and red meat to these countries, the tariffs could reduce these exports by 10%, according to Tonsor. While this might drive farmers to seek domestic markets, they may have to lower prices, negatively impacting their profits but potentially benefiting consumers. The price fluctuations will not be uniform across products; for example, hams might see a drop in price in the U.S. because they are a primary import to Mexico.
Farmer reaction ranges from concern to strategizing for a more level playing field. Steve Kuiper from the Iowa Corn Growers Association noted the challenges facing equipment suppliers due to reduced purchasing. Farmers like Katy Rogers of an organic farm near Indianapolis preemptively purchased items susceptible to price hikes following tariff announcements. They hope for eventual trade agreement resolutions to ease these burdens.
While Trump could soften the agricultural sector’s challenges with substantial aid, his efforts to cut federal spending bring uncertainties. Past aid totaled more than $22 billion in 2019 and $46 billion in 2020, including pandemic-related support. Policymakers, troubled by the long-term impacts on trade relations, fear these tariffs might compel major buyers like China, Mexico, and Canada to seek alternative markets. Concerns were echoed by experts like Timothy Wise, author of “Eating Tomorrow,” who questioned the sustainability of such tariffs amid rising food prices, anticipating resistance from corporate stakeholders.
