Farm Economy

The Bright Future of the U.S. Dairy Industry: Innovations and Opportunities

Tue, 01 Apr 2025 22:44:19 GMT

The U.S. dairy industry is witnessing a significant upswing, showcasing its potential for growth and innovation. Gregg Doud, president and CEO of the National Milk Producers Federation (NMPF), shared insights at the 2025 California Dairy Sustainability Conference held in Visalia, Calif. His address highlighted the resurgence of animal fats in the diet and the promising future of dairy products, including fluid milk.

Dairy’s Time to Shine
Doud emphasized the renewed interest in animal fats and noted that it’s now dairy’s moment to take the spotlight. With $8.5 billion invested in processing pipelines and new investments, such as Chobani’s recent $500 million expansion in its Twin Falls yogurt facility, the dairy industry is capturing attention. Doud challenged the audience by asking, “Where else in agriculture in the world, name another commodity in another country that has this kind of investment that’s going on in the dairy industry in the United States today?” Answering his question, he confidently stated, “The answer is nowhere.”

Emerging Opportunities and Investments
The massive $8.5 billion is spread across 17 facilities throughout the U.S., fueling the industry’s expansion. Doud pointed out the potential for growth in protein demand not just domestically but also globally. The Midwest stands as a primary area for expanding animal protein crush. Highlighting milestones, he mentioned Hilmar’s new cheese-producing facility in Dodge City, Kan.

“The Midwest, these are the only places on Earth that we can expand in terms of animal protein crush today,” Doud says. “Draw a circle with a 300-mile radius around Amarillo, Texas. Dodge City, Kan., last week, we just had the ribbon cutting — an enormous cheese producing facility.”

U.S. Dairy Exports on the Rise
The export value of U.S. dairy products has seen substantial growth year over year (YOY), rising 20% to an impressive $714 million — a January record. The relationship with Mexico as the top U.S. cheese customer continues to strengthen, although January exports recorded a modest 1% increase.

“The cheese exports to Mexico,” Doud enthusiastically remarked. “This is where it’s at, folks. This is why I’m so excited about this industry.”

China’s post-COVID-19 recovery shows a slower tempo, with Doud pointing out that just 300 million of China’s 1.4 billion people are driving dairy demand. He noted some challenges, such as China’s low semen import rates and the impact of high U.S. interest rates on global competition, but remained hopeful that changes in these areas could present future opportunities.

“That’s a leading indicator to say things are not going to go as well in China, no production going forward, maybe there is going to be some opportunity thereafter,” he says, noting that when you have high interest rates in the U.S. that makes the dollar strong, it makes it difficult to compete globally. “Our exports have been a little softer, but we’re still exporting about 16% of our production.”

Trade Imbalances and a Shift in Production
Another critical point Doud highlighted was the trade imbalance between the U.S. and the European Union (EU). Currently, the U.S. imports $3 billion in dairy products from the EU while exporting just $167 million. This imbalance underlines a broader narrative that sees U.S. dairy exports to non-traditional markets, like Guatemala, outpacing exports to the EU.

“It is an outrageous imbalance and trade,” he says. “You realize that we actually export 15 times more cheese to Guatemala than we do the European Union.”

Interestingly, while milk production appears stagnant, the shift in focus to producing more solids is changing the landscape of the industry.

“We have changed this industry,” Doud stated. “This is why we make more cheese because we’ve got more solids.”

The U.S. dairy industry, driven by substantial investments and shifting consumer preferences, is poised for significant growth in the coming years. As the dairy industry adapts to new challenges and opportunities, stakeholders and consumers alike can look forward to an era where dairy continues to thrive and innovate on a global scale.

Your Next Read:
Water Woes, Labor Limitations and Regulatory Restrictions Put California’s Dairy Industry At A Crossroads

Senate Overwhelmingly Confirms Brooke Rollins as 33rd Secretary of Agriculture

Thu, 13 Feb 2025 18:17:34 GMT

Brooke Rollins, President Trump’s nominee for Agriculture Secretary , was overwhelmingly confirmed by the Senate on Thursday. The vote was 72-28. Her confirmation was expected, as the Senate maintains its quick pace of confirming President Donald Trump’s key Cabinet positions.

“America’s farmers, ranchers and foresters need a leader at USDA who will be an advocate for their livelihoods and rural America and be a strong voice to address the pressing needs of our agriculture community. Brooke Rollins is that person,” Sen. John Boozman (R-AR), Chairman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, said on the Senate floor prior to the vote.

Congratulations @USDA Secretary Brooke Rollins. We look forward to working together to serve rural America. pic.twitter.com/CIljFpYQZX
— Senate Ag Committee Republicans (@SenateAgGOP) February 13, 2025

“I congratulate Secretary Rollins on her confirmation,” said House Committee Ranking Member Angie Craig (D-MN) in a statement following the vote. “Secretary Rollins begins her new role at a critical time for American agriculture. Family farmers are struggling with high input costs and low prices; tariffs are being proposed that will raise costs on American producers and American consumers; the agricultural workforce is being threatened; and Congress is behind schedule in passing a new, bipartisan farm bill. If we want to tackle these challenges in a way that supports family farmers and the communities they feed, we will need to work together. I look forward to building a strong working relationship with Secretary Rollins as ranking member of the House Agriculture Committee.”

Today, @SecRollins was sworn in as the 33rd U.S. Secretary of Agriculture. Here’s a snapshot of her first day at USDA! pic.twitter.com/GFpIYdnovF
— Dept. of Agriculture (@USDA) February 14, 2025

Rollins’ close ties to President Trump are viewed as a positive for U.S. agriculture as some say, “she has President Trump’s ear.”

When President Trump made the nomination announcement in November, he said her “commitment to support the American farmer, the defense of American food self-sufficiency and the restoration of agriculture-dependent American small towns is second to none.”

Important Issues in Immediate Focus

Rollins has some important issues to focus on immediately, including:

Reviewing the various USDA grants and other funding that remain frozen;
Getting ag disaster ($21 billion) and economic aid ($10 billion) payments made to eligible producers;
Working with NEC Director Kevin Hassett and others on the bird flu situation;
Monitoring the impact of Trump tariffs on the U.S. ag sector and any need for a farmer aid program
Advising key congressional members on a new farm bill;
Working with Treasury/IRS, EPA and Energy Dept. personnel on finalizing information regarding the 45Z program;
Informing President Trump and others about the impact on farm country from mass deportations relative to border security action;
Checking on and working with other agencies and departments regarding food aid;
Working with her new staff and other key USDA personnel as they officially come into USDA;
Getting ready for fiscal year 2026 budget matters for USDA;
Working with EPA and the Dept. of Energy on the 2026 RFS RVOs;
Dealing with a smaller USDA workforce via buyouts and other actions to reduce the number of government workers;
Addressing issues raised by the GAO relative to operation of the SNAP/food stamps program and other operational aspects of the program should they see any major alternations under budget reconciliation.

Rollins Gets Straight to Work

Rollins already held a meeting at 4 p.m. CT Thursday at USDA on bird flu, gathering who she said were “some of the most brilliant professionals I’ve encountered. Their insights were invaluable.” Rollins will be very visible in the days ahead, she said on X that she will be in four states, give six speeches, attend the National Farm Machinery Show in Louisville and “so much more.”

Today, I had the immense honor of being sworn in as the next Secretary of Agriculture by one of my heroes — and a true American judicial titan — Justice Clarence Thomas.

Being surrounded by my precious family as I took the oath of office is a moment I will forever cherish. pic.twitter.com/CrprXOuW7Z
— Secretary Brooke Rollins (@SecRollins) February 14, 2025

A Look Back at Rollins’ Confirmation Hearing

During Rollins’ confirmation hearing in the Senate Ag Committee last month , she outlined several key priorities for USDA if confirmed:

Rapid deployment of disaster and economic assistance authorized by Congress.
Addressing current animal disease outbreaks.
Modernizing and realigning USDA.
Ensuring long-term prosperity for rural communities.

Rollins also clarified her stance on ethanol and RFS, distancing herself from past positions of the Texas Public Policy Foundation:

She stated the Foundation’s position on ethanol/RFS was written a decade ago and was one of 900 to 1,000 papers produced annually.
Rollins emphasized she did not author those papers.
While admitting to being a defender of fossil fuels, she insisted she would be “a secretary for all of agriculture” and a “champion for all fuels.”

Tariff Impact Aid for Farmers

During questioning, Senate Ag Committee Chairman John Boozman (R-Ark.) asked Rollins about her approach to working with President Trump’s trade agenda. Rollins responded she would prioritize working with the White House to address any challenges farmers and ranchers might face under potential tariff implementations.

Rollins committed to supporting farmers in the case of tariff-related harm:

She pledged to undertake efforts such as the Market Facilitation Program (MFP) via payments from the first Trump administration. MFP was part of a broader effort by USDA to assist farmers impacted by retaliatory tariffs and trade disruptions.
Rollins has consulted with former USDA Secretary Sonny Perdue about the implementation of such programs.

Rollins previously servied as the president and CEO of the America First Policy Institute (AFPI), a think tank established by former Trump officials to promote conservative policies.

AFPI has advocated for curbing foreign ownership — particularly from China — of U.S. farmland, an issue with bipartisan support in Congress. She served as the president and CEO of the Texas Public Policy Foundation (TPPF) from 2003 to 2018, where she significantly expanded the organization and positioned it as a leading state-based think tank.

Economists Says Rollins is a Positive for U.S. Agriculture

How Farmers Size Up RFK Jr.

(Farm Journal )

80% of economists in the January Ag Economists’ Monthly say Rollins is a positive pick for U.S. agriculture .

“Rollins knows ag and has Trump’s ear,” said one economist.

“Her close connection the President and reasons outlined in the letter sent by 427 ag organizations and businesses on January 15th,” said another economist.

20% of economists say Rollins wouldn’t be positive for U.S. agriculture.

One economist said, “USDA focused heavily on under-served producers during the Vilsack era and my sense is that producers wanted the Secretary to come from a production ag view; whereas Rollins come at it more from an overall domestic policy view. Also, feel the administration isn’t helping her out with the Deputy Secretary nomination. Producers don’t see themselves in the upcoming USDA leadership.”

Ag Groups React to Rollins’ Confirmation

“Congratulations to Secretary Brooke Rollins on her confirmation to lead USDA. America’s pork producers are eager to work with Secretary Rollins to fix the multitude of problems caused by California Proposition 12 and ensure farm families have reasonable policies to pass down our farms to future generations,” said National Pork Producers Council (NPPC).
“On behalf of America’s farmer cooperatives, I would like to congratulate Brooke Rollins on her confirmation as Secretary of Agriculture today. In this role, Secretary Rollins will lead an agency that impacts the operations of every farm and ranch in the country and touches every local community across rural America. She will also serve as the voice of producers within the Trump administration at a critical moment. NCFC looks forward to working with Secretary Rollins on a range of issues within USDA that impact farmer co-ops and their members,” said National Council of Farmer Cooperatives (NCFC).
“Congratulations to Secretary Brooke Rollins on her bi-partisan confirmation to become U.S. Secretary of Agriculture. Clearly, President Trump has selected a highly capable and accomplished individual to lead USDA. Secretary Rollins’ commitment to returning USDA to its core mission of supporting all of agriculture is exactly the focus our country needs right now. I am confident that she will be an effective advocate for farmers, ensuring that President Trump’s policies reflect their needs and support the vitality of our rural communities,” said Mike Naig, Iowa Secretary of Agriculture.
“The National Association of State Departments of Agriculture (NASDA) congratulates the Honorable Brooke Rollins on her confirmation to lead USDA as the 33rd U.S. agriculture secretary. Rollin’s policy crafting experience and passion for opportunities for agriculture will contribute tangible impacts for American farmers and ranchers and people around the globe who enjoy U.S. food products.
NASDA is enthusiastic to work with the secretary on our priorities including increasing economic opportunities for farmers, ranchers and food producers, advancing a new farm bill, improving Americans’ access to nutrient-dense foods and ensuring American agriculture can continue to provide the most secure, affordable and nutritious food supply in the world,” NASDA said in a statement.
“Secretary Rollins understands the pain points the agriculture industry faces and has a plan to address these right away,” Hawkins said. “She understands the importance of a strong safety net and is prepared to work with Congress to implement a modernized Farm Bill. She will work with farmers to eliminate burdensome and costly regulations that hamper innovation, will spearhead animal disease prevention and mitigation, and will identify new export channels across the globe to support markets. Raised in rural Texas, Secretary Rollins knows the importance of strengthening our rural communities and making them a great place to live, work, and raise our families. We are thrilled with her bipartisan confirmation and welcome the opportunity to work with her to advance the agriculture industry,” said Missouri Farm Bureau President Garrett Hawkins.
Michael Dykes, President and CEO of the International Dairy Foods Association (IDFA), expressed confidence in Rollins’ capabilities.
“IDFA congratulates Ms. Rollins on her confirmation to lead USDA as the U.S. Secretary of Agriculture. We’re confident she will be a strong voice for the U.S. food and agriculture industry across the federal government. As USDA navigates a dynamic trade environment, we need Secretary Rollins’ leadership to expand U.S. dairy exports, support a coordinated response to animal disease outbreaks, and preserve dairy’s critical place in federal nutrition programs, including SNAP milk and dairy nutrition incentives, WIC and school meals. IDFA looks forward to working with Secretary Rollins at USDA to strengthen Americans’ dietary health, support farmers and the entire dairy supply chain in the production of wholesome food, and build a regulatory environment that promotes innovation, growth and food safety. These efforts will enable our industry to continue leading the world in the production of high-quality, nutritious dairy foods,” Dykes stated.

Congratulations, @BrookeLRollins on your confirmation to lead the U.S. Department of Agriculture @USDA . We look forward to working with you to be a strong voice for the U.S. food and agriculture industry, expand U.S. dairy exports, support a coordinated response to animal… pic.twitter.com/1pqhNrzDnc
— IDFA (@dairyidfa) February 13, 2025

Rollins and will now finish assembling her team at USDA. Here are the key appointments already made by President Trump:

Stephen Vaden: Nominated for Deputy USDA Secretary

Undersecretary Nominees

Richard Fordyce: Undersecretary for Farm Production and Conservation
Dudley Hoskins: Undersecretary for Marketing and Regulatory Programs
Luke Lindberg: Undersecretary for Trade and Foreign Agricultural Affairs
Michael Boren: Undersecretary for Natural Resources and Environment
Scott Hutchins: Undersecretary for Research, Education and Economics

Senior Staff Appointments:

Kailee Tkacz Buller: Chief of Staff at USDA
Preston Parry: Deputy Chief of Staff
Jennifer Tiller: Chief of Staff to the Deputy Secretary and Senior Advisor to the Secretary for Food, Nutrition, and Consumer Services
Dominic Restuccia: White House Liaison for USDA
Ralph Linden: Principal Deputy General Counsel
Audra Weeks: Deputy Director of Communications

Natural Resources and Environment Appointments

Kristin Sleeper: Deputy Under Secretary for Natural Resources and Environment
Tom Schultz: Chief of Staff for Natural Resources and Environment

Other Notable Appointments

Brooke Appleton: Deputy Undersecretary for Farm Production and Conservation
Tyler Clarkson: USDA General Counsel

10 Understated Things Economists Say Could Impact Agriculture in the New Year

Tue, 31 Dec 2024 12:47:56 GMT

This past year was definitely full of surprises, but there were also happenings in agriculture that economists warned about at the end of 2023.

The bleak outlook for commodity prices, along with elevated interest rates, created a downturn in the ag economy, which is something many economists warned would happen. It’s the speed of which margins crumbled that might have been the bigger surprise.

The latest Ag Economists’ Monthly Monitor asked economists if the U.S. was either in a recession or on the brink of one. The majority of ag economists say U.S. agriculture is ending the year in a recession.

56% of ag economists responded by saying agriculture is currently in a recession, which is up from the 53% who responded that way in October.
81% of economists surveyed said the U.S ag economy is on the brink of a recession, which is a significant jump from the 56% of economists who responded that way in the October survey.

One occurrence that wasn’t on anyone’s radar in 2023: H5N1. What was first thought to be a mystery illness impacting dairy herds in Texas was later confirmed as Highly Pathogenic Avian Flu, the first time the disease was detected in mammals.

At the end of 2024, what are economists watching in 2025? In Farm Journal’s latest Ag Economists’ Monthly Monitor, we asked economists: “What’s the one factor impacting the ag economy that’s not being talked about or covered by the media enough right now?”

From trade to deregulation plus numerous unknowns in a new administration, economists have no shortage of issues they’re watching in the new year.

Here’s What Economists Are Saying:

“The media seems consumed with the negatives of a Trump administration/Republican trifecta. It’s certainly good to be aware of the challenges with any political transition, but more forward thinking on what is positive, would be helpful: the outlook for taxes, biofuels policy, trade deals with agriculture included, deregulation all seem to be potential positives we could be talking about more.”
“Prospective tariff war is being downplayed, despite published research measuring expected range of damage.”
“Farmer attitudes toward alternative land use: CRP, solar and other forms to help diversify incomes.”
“Policy uncertainty is high right now. Will tariffs be imposed and if so, what will be the reaction of other countries? Will the new Administration take regulatory actions that favor or hurt the biofuel industry? What will be the outcome of debates over tax and budgetary policy? Will economic assistance to the farm sector be approved during the lame duck session or in early 2025? What about a new farm bill? Many people are making assumptions about how these questions will be answered, but we don’t know.”
“Farm income varies greatly by region. While we often focus on the Midwest and the financial health of that region, it is also important to notice that regions in the southern U.S. are really struggling.” It is also important to watch what production adjustments producers make to cope with today’s tighter operating margins?
“Could federal budget cuts/austerity dramatically change/reduce the federal farm income safety net?”
“Cash rent prices staying constant during a downturn in crop prices.”
“Let’s be clear — the clean fuels tax credit goes to the fuel producer, not the farmer. It enables market access into the biofuels market for the farm economy, but the ability for the farm economy to capitalize upon it is hamstrung by credit levels that have incentivized large inflows of foreign feedstocks at the expense of literally homegrown feedstocks like SBO.”
“The Brazil real is depreciating, which eventually leads to more U.S. competition.”
“China, Europe, Mexico and others know what to expect out of Trump. They’ve seen it before. Everyone is discounting the possibility that Trump’s tariff threat could result in some pre-emptive trade agreements that benefit us here in the states. The U.S. is the biggest buyer of consumer goods in the world. They can’t afford to cut us off. Note that I said consumer goods, not commodities.”

Your Next Read — Economic Loss Assistance Program Payments Passed by Congress: Here’s What Farmers Need to Know

Congress Approves CR, Includes $31 Billion in Farmer, Disaster Aid and Farm Bill Extension

Mon, 23 Dec 2024 16:49:35 GMT

With little if any drama like the House, the Senate easily cleared the 118-page continuing resolution (CR) early Saturday morning with a vote of 85-11 (four members did not vote). The measure funds the government through March 14. The CR includes nearly $110 billion in disaster and farmer aid ($21 billion ag disaster and $10 billion in farmer aid), and a one-year extension of the 2018 Farm Bill.

The Senate vote came hours after the House passed the measure on a 366-34 vote, well above the two-thirds majority threshold required under that chamber’s suspension of the rules procedure, with no Democrats voting no along with 34 Republicans. Texas Dem Rep. Jasmine Crockett voted “present”.

Debt Ceiling

GOP leaders dropped a two-year suspension of the statutory debt ceiling that was in a previous CR version and that helped push the bill through both chambers. Democrats opposed inclusion of the debt limit provision, arguing it would make it easier on Republicans next year to cut taxes and ram through other partisan priorities. Cutting the debt limit language was enough to convince Democrats to go along with the stripped-down bill, even though it excluded their priorities contained in an i nitial 1,547-page bipartisan measure .

One ag sector lobbyist said, “Ag groups need to start playing the game… those who always vote no on everything… why not actively oppose them… they don’t support farm bills anyhow.”

Breaking Down the Votes

Here is the list of House Republicans who voted no on the CR that contained $31 billion in ag sector assistance:

House no votes on CR

(House of Representatives)

Some notable representatives who voted against the CR include Nancy Mace (South Carolina), Thomas Massie (Kentucky), and Chip Roy (Texas). The reasons for voting against the CR varied among representatives, with some citing concerns about high levels of spending, lack of reforms, or opposition to giving the current administration additional funding.

Here is the list of Senate Democrats who voted no:

Senate no votes on CR

(U.S. Senate)

Farmer Aid in the CR

This is a breakdown of the $31 billion in farmer assistance via the CR:

Farmer aid breakdown

(House Ag Committee)

Possible Payment Amounts to Farmers

The farmer aid should be available 90 days after the legislation’s enactment. Farm CPA Paul Neiffer estimated per acre payment amounts via the Economic Loss Assistance program based on his knowledge of the provisions.

Possible payments as calculated by Farm CPA Paul Neiffer

(Lindsey Pound )

While USDA will make the final calculations, based on Neiffer’s estimates, producer payments look like this per acre, using the following calculation: (USDA’s Projected Cost of the Crop – National Projected Returns) x Eligible Acres x 26% = Total Payment.

Corn: $43.80
Soybeans: $30.61
Wheat: $31.80
Cotton: $84.70
Rice: $69.66

Neiffer says there is a payment limit of $125,000 dollars, which is down from the $175,00 originally proposed in the FARM Act. He says it’s also key to note with the updated relief, if 75% of your total gross income comes from farming, which includes wages and interest and dividends, then you qualify for the double payment.

Related Story: Poll Results: 71% of Farmers Say Congress Should Approve Economic Aid Before Year-End

House Ag Committee Fact Sheet Details Payments

The House Ag Committee released a fact sheet on the farmer economic assistance that is provided in the current Continuing Resolution (CR), modeled off of Rep. Trent Kelly’s (R-Miss.) FARM Act (HR 10045). There is a list of eligible commodities, a payment formula, administrative provisions, and estimated payment rates.

House Ag panel staffers say please keep in mind that the payment rates in this document are estimates and “almost certain to change slightly once implemented. These rates are the best approximation based on the data cited in text. This does incorporate the minimum payment rate provision. You’ll see that those crops receiving payments via the minimum payment provision have an asterisk.”

The House Ag panel had the Agricultural and Food Policy Center at Texas A&M analyze the impact of the economic assistance provided through this provision. Their findings suggest that the funds will improve ending cash position on their Representative Farm system by nearly 20% by the end of 2025.

Farmer aid

(House Ag Committee)

Your Next Reads:

Poll Results: 71% of Farmers Say Congress Should Approve Economic Aid Before Year-End

Ag Gets Potential Christmas Gift from Congress: Continuing Resolution Includes $31 Billion in Aid for Producers

Majority of Ag Economists say U.S. Agriculture is Ending the Year in a Recession

A sharp drop in net farm income among row crop farmers has held a hefty grip on the ag economy this year. 2025 isn’t forecast to be much better, with margins expected to be in the red again for all major row crops. The high input and high interest rate environment, coupled with low commodity prices, is a recipe that could also mean more consolidation in agriculture in 2025.

The eroding health of the overall farm economy was the emphasis of the latest Farm Journal Ag Economists’ Monthly Monitor, which is a survey of nearly 70 leading agricultural economists from across the country.

When asked if agriculture is either currently in a recession or on the brink of one:

56% of ag economists responded by saying agriculture is currently in a recession, which is up from the 53% who responded that way in October.
And 81% of economists surveyed said the U.S ag economy is on the brink of a recession, which is a significant jump from the 56% of economists who responded that way in the October survey.

One of the main reasons more economists didn’t respond that ag is already in a recession, is the fact the livestock sector is doing better than expected at the beginning of the year.

Farm Journal asked economists to weigh in on whether they thought agriculture is currently in a recession. Economists in the anonymous survey said:

“A recession is a sustained period of economic decline. We may not be able to say the entire agriculture sector is in recession, but the row crop sector has been in economic decline since 2022 and looks like that will continue into 2025.”
“I would argue we are largely already there...incomes have already fallen...used machinery values have fallen...but there is room for more decline from the livestock sector should those prices turn lower. Land values holding up are probably the one thing in my opinion that has yet to give, and that MAY only be a matter of time. “
“Farm income has already dropped considerably from the 2022 peak, and the crop sector is seriously affected. There are many downside risks in 2025 that could make a difficult situation worse.”
“I believe we are already in a recession. Farm income is and has been declining, and I don’t see a reversal of this in the next 12 to 24 months given policy uncertainty, surplus inventories, large ex-U.S. production, and likely declines in export viability.”
“Higher interest rates are making it hard to manage debt that is outstanding and likely to come with next year.”
“Some producers have not built an adequate asset base to weather these low returns and will be forced to change their business in an attempt to survive.”
“Negative profit margins relative to recent years are driving capital investment and land prices lower, reducing the financial position of agriculture amid lower income.”
“Specifically for the row crop sector, we are looking at another year of negative returns and that really wears on liquidity and puts pressure on longer term solvency.”
“Prices are too low to pay input costs and create a profit. At the moment, producers are fighting to break even.”

However, not all economists agree agriculture is in a recession. One economist points to land prices as the reason why.

“It is hard to say that agriculture is facing a recession when land prices are holding the way they are,” said one economist in the anonymous survey. “It appears that (many) full-time, commercial-scale row crop producers have used their working capital on recent land purchases and have nothing left to withstand a financial shortfall. Frankly, the current conversation about passing economic relief will go to those that have overextended their means to buy land the last couple years.”

Concerns About Consolidation

Another year of negative margins could create more consolidation in the row crop sector, according to economists. The latest Ag Economists’ Monthly Monitor found 94% of economists think the current environment of low commodity prices and high input costs will accelerate consolidation in row crop operations and allied industries .

“Some farms are expanding while others are leaving the industry. It is interesting to compare the percentage of U.S. businesses that go broke in the first 10 years to the percentage of U.S. farms that go broke in the first 10 years. The role of government intervention has really limited the realized risk in agriculture and, as a result, lowered the ability for young producers and ranchers to get into agriculture and increased the consolidation of land.”
“A sustained period of high costs and low prices will likely result in some farmers going out of business sooner than expected, which may be due to point of financial need or stopping by choice ahead of that. When farm consolidation is accelerated, there are fewer farmers buying inputs. Even if the acres are the same, fewer input retailer are needed to serve the customer base. Also, we have greater pressure on the whole industry as big farmers grow.”
“Low-cost producers, and those without any land rents or borrowing costs, are better equipped to weather a downturn in the farm economy.”
“Average margins are typically higher for larger farms. They also have more ability to borrow money.”
“The only way to survive is to increase quantity (number of bushels) and low margins.”
“Those who have managed well, kept production costs low, and have responsible cash balances should be in a good position to expand, absorbing those who made poor choices or experienced bad luck. Lending and federal disaster payments could delay this some. So, the magnitude of this is uncertain.”
“People will always be entering and leaving the industry, but when returns are low, more people leave because they have to, rather than because they want to.”
“The last time we were at the start of a commodity down cycle in 2014/15, it presaged a wave of consolidation in input developers over the next several years, such as Bayer/Monsanto; Dow/Dupont; ChemChina/Syngenta; Mosaic/Potash.”
“Operations and allied industries will expand to find additional economies of scale, one of the few options on the table to help with the tough financial situation.”

What to Watch in the Ag Economy in 2025

The health of the farm economy into the new year relies on a number of factors. What happens in South America with crop production will have a major impact on commodity prices in the U.S. However, economists said there are other factors to watch, including what happens with the incoming Trump administration.

Nov./Dec. Ag Economists’ Monthly Monitor

(Lindsey Pound)

When asked, “What are the two most important factors driving agriculture’s economic health today as well as in12 months,” economists said:

“South American production and input costs.”
“Farm financial conditions: there’s been a little price improvement recently, but still high costs mean 2025 is likely another year of negative margins for row crop producers. 2. Relative global competitiveness: We continue to see cropland area expansion in Brazil and, at the same time, they have a more favorable biofuels policy and are expanding trade agreements.”
“Congressional efforts to deliver economic and natural disaster aid, and U.S. agricultural export markets.”
“Declining commodity prices and associated margin squeeze.”
“As a sector as a whole, the livestock sector returns are important to the overall health in the short run. In 12 months, how the markets adjust (input prices, crop prices, and cash management/debt levels).”
“Demand side: uncertainty about renewable energy policy and potential international market loss through trade disputes. Production side: outlook for labor availability, given political rhetoric. Overall margin compression on lower commodity prices (likely larger Brazilian production forthcoming) and sustained high interest rates.”
“If 2018 is any indication, in 12 months we are likely to see adverse effects of tariffs, as well as immigration policy changes.”

Future of the Farm Bill

The Ag Economists’ Monthly Monitor also asked economists to weigh in on when they think Congress will pass a new farm bill, as well as if Congress votes on an extension this year, is it necessary to raise reference prices for producers.

Nov./Dec. Ag Economists’ Monthly Monitor

(Lindsey Pound)

Nov/Dec Ag Economists’ Monthly Monitor

(Lindsey Pound)

See previous results from Farm Journal’s Ag Economists’ Monthly Monitor.

Buoyed by Stronger Support from Rural America than 2016, Trump Wins Second Term as President

Donald Trump won all battleground states in a virtual red wall while the blue wall (Pa., Wis., Mich.) cratered for Democratic challenger Kamala Harris as she faced the greatest political comeback in U.S. history.

Trump also won battleground states of North Carolina and Georgia and was close in Nevada and Arizona, two states not yet officially called. It looks like Trump will eventually garner over 300 electoral votes. Trump is the first candidate in over a century to reclaim the White House after losing it. Trump, who won election in 2016 as the 45th president, now will be the 47th and just the second candidate in U.S. history to win nonconsecutive White House terms.

The Republican Party was on track to win the popular vote for the first time since 2004.

“America has given us an unprecedented and powerful mandate,” Trump told supporters as he declared victory.

Trump garnered even stronger support in rural America versus his still robust rural vote in this first administration. That is likely a backlash against the ag policy moves of the Biden/Harris administration that focused on underserved and minority rural citizens.

Trump also won strong support among working-class voters. The AP VoteCast survey, which included more than 120,000 registered voters nationally, showed he won 55% of voters without a college degree. That was up from 51% in 2020 in his race against Biden. Harris, meanwhile, struggled to pull together the diverse coalition that elected Biden in 2020, and she was weighed down by negative views of the economy under the Biden administration.

— It’s Trump’s GOP and his party has changed in a massive realignment. It now focuses on the working class, younger Americans, including young Black men, and Hispanics. It already focused on rural Americans; Trump gained even more rural votes in this election.

—“A new star is born,” Trump said in his acceptance speech: Elon Musk, who helped Trump and the GOP in campaign funding and messaging. It is unclear what role Musk will play in the next Trump administration, but the president-elect previously said he wants Musk to lead an effort to make the government more efficient. Of note: Musk vowed to keep his political action committee going beyond the presidential election, a sign the world’s richest person is building a political machine to support Trump.

— Republicans did much better than most expected in Senate races, with a likely pickup of four seats, to 53 (perhaps more), up from their 49 total in the current Congress. They include:

• West Va.: Open seat (Joe Manchin). Jim Justice (R) beat Glenn Elliott (D)

• Mont.: Incumbent Jon Tester (D) lost to Tim Sheehy (R)

• Ohio: Incumbent Sherrod Brown (D) lost to Bernie Moreno (R)

• Pa.: Incumbent Bob Casey Jr. (D) lost to Dave McCormick (R)

• Mich.: Open seat (Stabenow). Elissa Slotkin (D) is clinging to a 4,600 vote lead over former GOP Rep. Mike Rogers.

• Wis.: Incumbent Tammy Baldwin (D) is slightly ahead of Eric Hovde (R)… after late results from Milwaukee and Racine put her in the lead.

• Nev.: Incumbent Jacky Rosen (D) leads Republican Sam Brown in both Washoe and in Clark County, where the outstanding vote likely benefits her. With many absentee ballots, this race may not be called for a while, much like the 2022 Senate contest.

• Ariz.: Open (Kirsten Sinema). Ruben Gallego (D) beat Kari Lake (R)

• Neb.: Incumbent Deb Fischer (R) squeaked by Dan Osborn (Independent)

• Texas: Incumbent Ted Cruz (R) beat Colin Allred (D)

• Current GOP Sens. Deb Fischer (Neb.) and Ted Cruz (Texas) both won their races that Democrats thought they had a chance of winning.

— What the GOP Senate tally means: This will mute to some degree GOP Senate moderates in the new Congress, including Sens. Susan Collins (Maine), Lisa Murkowski (Alaska), newly elected John Curtis (Utah) and Bill Cassidy (La.). The Senate GOP count gives Republicans powerful leverage in tax and spending battles.

— Several House races are still too close to call, but it appears Republicans will hold on to its narrow majority in the chamber. But Democrats were leading in some close races and several California races could still tip the House chamber to the Democrats. If the GOP keeps control of the chamber, that means another contentious House Speaker vote perhaps changes in its rules.

— Election winners include:
• Trump and his campaign strategy. Also, Trump’s victory coattails helped Republicans win a few Senate contests previously mentioned and helped keep the House in GOP control.
• GOP issues, including the border, tax/economic/inflation policy, energy, reduced regulations and a push for a reciprocity trade policy.
• Sen. Steve Daines from Montana played a significant role in the 2024 Senate races as the chairman of the National Republican Senatorial Committee (NRSC). In this position, he was responsible for leading the Republican efforts to flip control of the Senate from Democratic to Republican majority.

— Losers include:
• Kamala Harris who mostly refused to answer questions and make clear the policies she wanted. Her strategy of focusing on abortion and women voters was not enough to beat Trump.
• Former House Speaker Nancy Pelosi (D-Calif.), who led the maneuvers to get President Joe Biden to relinquish his re-election run for president and pushed Harris to pick Tim Walz of Minnesota as her vice president when election experts thought she should have picked Pa. Gov. Josh Shapiro.
• Harris’ campaign strategy that at the end relied on elite musical entertainers, a failed strategy that Hillary Clinton also tried. Nearly $16 billion were spent this election season, with Democrats spending a lot more than Republicans. The GOP saw the benefit of podcasts, which were a free way of getting their message across to voters.
• Pollsters who underestimated Trump voters for the third consecutive presidential election. Another loser: Iowa pollster Ann Selzer, who on Saturday predicted Harris over Trump in Iowa by 3 points; Trump won the state by double digits. Her poll turned out to be an outlier.
• President Biden’s family who helped push him to run for re-election only to wait until it was very late to see him pushed aside and forced to drop out.
• Most of the mainstream (legacy) media who clearly favored Harris and did several things that showed their bias.

— Now what?
• Trump should have learned from mistakes during his first term and will not likely make poor choices of some Cabinet and other personnel who ended up writing negative books about him.
• Trump’s Cabinet: The new GOP Senate next year will be able to provide the votes for Trump to get the Cabinet he wants. Unclear is what role RFK Jr. will play in Trump 2.0. He would not likely be confirmed by the Senate for any Cabinet position.
• High odds that a Trump favorite, Doug Burgum of North Dakota, will come into Trump 2.0 administration, perhaps as Energy Secretary, Burgum will bring ag-related interests relative to the RFS and tax incentive programs like 45Z/Sustainable Aviation Fuel (SAF). On global climate policy, Carbon Brief said Trump’s return to the White House would likely result in the U.S. missing its climate pledges “by a wide margin,” though it noted that some Biden administration policies such as a mammoth clean-tech spending program may “prove hard to unpick.”
• The lame-duck session of Congress may be encouraged to complete lingering business, including fiscal year (FY) 2025 funding, disaster aid, and perhaps a new farm bill and an ag economic aid measure.
• Foreign policy: Trump will take a more aggressive role in foreign policy rather than the near pacificist approach taken by Biden/Harris.
• Supreme Court: In the next few years, one to several existing SCOTUS members could likely depart.
• Republicans are now in position to reshape the federal judiciary.

— Budget reconciliation: With Republicans capturing the White House and Senate, and perhaps keeping control of the House, that means several budget reconciliation measures until 2026 elections could alter that situation. That means higher odds that Trump will get a lot of what he wants relative to 2017 Tax Act policies which mostly expire at the end of 2025.

— During the first days of his second term, Trump will issue executive orders dealing with border issues and energy-related matters, topics which Biden altered in recent years. Trump will also put into play that for every new regulation, up to ten regulations must be swept away.

— The ag sector will focus on Trump 2.0’s trade policy. Trump has said “tariffs” is his favorite word in the dictionary and has consistently said he would use them against China. He has also said he would put 10% to 20% tariffs on imports from other countries, but that is seen as leverage in discussions with countries for a key goal of his new term: reciprocal trade agreements. Key will be if former U.S. Trade Rep Robert Lighthizer comes into the new Trump administration as most expect and if so, under what role. It may be as Commerce or Treasury Secretary. Trump recently said he would slap on tariffs against Mexico if their new president doesn’t comply with holding illegal immigrants into her country.

— International reactions to Donald Trump’s return to political prominence:
• Israeli Prime Minister Binyamin Netanyahu referred to the outcome as “history’s greatest comeback,” signaling strong approval and a continued bond between the two leaders.
• Indian Prime Minister Narendra Modi referred to Trump as a “friend,” reflecting close ties and potentially anticipating cooperative efforts.
• Cautious optimism from Western leaders: France, Britain, and Italy’s leaders expressed a diplomatic hope for future collaboration, signaling their willingness to maintain stable relations with Trump while hedging their tone.
• Far-right leaders in Europe cheered, indicating ideological alignment or a belief that Trump’s policies resonate with their political goals.
• Measured Response from Ukraine: Ukrainian President Volodymyr Zelenskyy gave restrained praise by highlighting appreciation for a “peace through strength” approach. This suggests caution from Zelensky, likely stemming from Trump’s past relationship with Russia and potential implications for Ukraine’s security situation.

— Market reactions:
• Bitcoin is bullish on the news as Trump and Musk are supporters. Bitcoin jumped to a record high above $75,000.
• U.S. equities will likely show a continuation of higher levels as Trump’s wins will mean better tax/investment opportunities than if Harris had won.
• Banks, brokers: Robust stock markets and an end to the Biden administration antitrust crackdown should mean more profits for banks and brokers… and less regulation. Bank of America, Citigroup, Morgan Stanley, JPMorgan Chase, Charles Schwab and Goldman Sachs are all up 6% or more in premarket trading.
• Treasury yields jumped, and the dollar surged on the election results (While Trump has advocated for a weaker dollar, many investors say his policies will achieve the opposite). Treasury yields are soaring on the view that Trump’s agenda — more spending, low taxes, tariffs, restricted immigration — will fuel inflation. The 10-year US Treasury note edged towards 4.5%, a level not seen in about six months, before pulling back a bit. Bitcoin spiked to a record and the Mexican peso lost as much as 3.5%.
• Oil, gold: A stronger greenback makes dollar-denominated commodities more expensive for international buyers, so crude and precious metals are falling.
• The yuan weakened the most in two years and Chinese stocks fell on the specter of Washington slapping tariffs of up to 60% on Chinese goods. The move could further weaken the world’s second-largest economy and disrupt global supply chains.
• Ag markets will be cautious over Trump’s aggressive trade policies. Soybeans dropped given concerns about trade tensions with China, the biggest buyer.
• Federal Reserve policymakers will watch to see if Trump’s policies via across-the-board tariffs and aggressive tax cuts are inflationary.

— A key state ballot issue in South Dakota is poised to have gone against carbon pipelines. This referendum let voters decide whether to uphold a pipeline bill that was passed by legislators. With 82% of votes in, 60% have voted no and 40% voted yes. A no vote would mean the state law in question would be rejected and that raises fresh questions about the Summit Carbon Solutions pipeline and similar projects.