The agricultural sector in rural America is grappling with a deepening financial strain as crop prices plummet while production expenses remain stubbornly elevated. According to the National Corn Growers Association (NCGA), corn prices have dropped by over 50% since their 2022 peak, yet input costs have only declined by 3%, resulting in an 85-cent loss per bushel. The group warns that the outlook for the coming year could worsen, with projections pointing to even lower market prices and rising operational costs. n nIn response, the NCGA has urged Congress and the executive branch to take action to stimulate demand, including expanding ethanol blending in fuel and improving access to international markets. n nAround the same time, the American Soybean Association (ASA) sent a letter to the administration, highlighting that U.S. soybean producers are nearing a financial breaking point. The association emphasized the urgency of securing strong purchase agreements with China and eliminating retaliatory tariffs imposed by Beijing. n nHistorically, American soybeans were the preferred choice for Chinese buyers, but ongoing trade tensions have pushed those customers toward South American suppliers, particularly Brazil, which has ramped up production significantly since the last trade conflict. The ASA noted that, with harvest season approaching, there have been no purchases of U.S. soybeans by China for upcoming months. n nSoybean prices have declined by approximately 40% since 2022, compounding the financial burden on farmers who are simultaneously facing higher costs for equipment and inputs. The ASA stated that many soybean producers are under severe economic pressure and cannot endure a prolonged trade standoff with their largest export market. n nThe Federal Reserve’s recent regional surveys reinforce this troubling picture. Reduced farm incomes have led to tighter liquidity, increasing reliance on credit. In several districts, repayment rates have declined: about 30% of lenders in the Chicago and Kansas City regions reported worsening repayment performance compared to the previous year, rising to 40% in Minneapolis and 50% in St. Louis. n nDespite these challenges, some relief is on the horizon. Following the initiation of new trade disputes earlier in the year, policymakers began discussing financial support for farmers, reminiscent of aid packages during the previous administration’s trade conflicts. The recently passed One Big Beautiful Bill Act allocates roughly $66 billion for agriculture, with $59 billion directed toward strengthening farm safety-net programs, according to the American Farm Bureau Federation. n nAdditionally, new trade agreements may open alternative markets. Countries such as Indonesia and Bangladesh have committed to increased agricultural imports from the U.S., and there are indications that Vietnam, the Philippines, and Thailand may boost purchases of feed grains. n nTimothy Loh, regional director for Southeast Asia & Oceania at the U.S. Soybean Export Council, told Reuters that recent trade talks have created opportunities to expand U.S. market presence in the region. He anticipates growing demand for American soymeal and other agricultural exports in Southeast Asia. n
— News Original —nRural America is suffering an economic crisis as crop prices plunge — ‘U.S. soybean farmers cannot survive a prolonged trade dispute’nOn Thursday, the National Corn Growers Association raised alarms about “the economic crisis hitting rural America, as commodity prices drop at a time when input costs remain at near-record highs.” n nCorn prices have plunged more than 50% from their 2022 peak, while production costs are down just 3% in that span, translating to a loss of 85 cents per bushel, the NCGA said, adding that the outlook for next year is worse with even lower prices and higher costs. n nThe NCGA called on Congress and the Trump administration to boost demand, including via higher blends of ethanol and increased foreign market access. n nA week before that, the American Soybean Association sent a letter to Trump, warning that “U.S. soybean farmers are standing at a trade and financial precipice.” n nThe group asked that Trump prioritize soybeans in trade talks with China, seeking major purchase commitments as well as the removal of Beijing’s duties on the U.S. n n“Historically, the U.S. was the provider of choice for Chinese customers,” the letter said. “However, due to ongoing tariff retaliation, our longstanding customers in China have and will continue to turn to our competitors in South America to meet their demand, a demand Brazil can meet due to significantly increased production since the previous trade war with China.” n nWith harvest season fast approaching, the association added that China hasn’t purchased any U.S. soybeans for the months ahead. n nThe longer negotiations with China drag on without a trade deal—and the deeper farmers go into the fall— the more pain they will feel, it said. n nLike the corn growers, the soybean growers also cited sharply lower prices and high costs. Since peaking in 2022, soybean prices have fallen about 40%. n n“Soybean farmers are under extreme financial stress,” the group said. “Prices continue to drop and at the same time our farmers are paying significantly more for inputs and equipment. U.S. soybean farmers cannot survive a prolonged trade dispute with our largest customer.” n nFarm incomes, credit conditions deteriorate n nThe bleak picture of the agricultural economy was echoed by the Federal Reserve’s latest survey of farm financial conditions. It found that weaker income has reduced liquidity for farmers, boosting demand for financing. n nAt the same time, credit conditions deteriorated with roughly 30% of respondents in the Chicago Fed and Kansas City Fed districts reporting lower repayment rates versus a year ago, while the Minneapolis Fed region’s share was around 40% and the St. Louis Fed’s was 50%. n nTo be sure, U.S. farmers are set to receive substantial help. After Trump launched his latest trade war earlier this year, the administration and lawmakers began talking about a bailout for farmers in April, similar to how they received a bailout during Trump’s first term, when he waged a trade war against China. n nThe One Big Beautiful Bill Act that was signed in July included about $66 billion in agriculture-focused spending. The vast majority, about $59 billion, is earmarked for farm safety-net enhancements, according to the American Farm Bureau Federation. n nIn addition, other trade deals Trump has negotiated should see countries elsewhere in Asia step up purchases of U.S. crops. n nFor example Indonesia and Bangladesh have agreed to boost buying under their agreements, and sources told Reuters this past week that Vietnam, the Philippines and Thailand may increase feed grain purchases. n n“There have been productive trade discussions which present an opportunity for the U.S. to strengthen its access to markets in our region,” said Timothy Loh, the U.S. Soybean Export Council’s regional director for Southeast Asia & Oceania, told Reuters. n n“We are anticipating higher demand for U.S. products such as soymeal and other U.S. agricultural exports into Southeast Asia.”
