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US Farmers Face Double Whammy of Trade War and Bumper Crops

(Bloomberg) -- For American farmers traveling through the Heartland scouting corn and soybean fields, it feels like 2019 all over again.

President Donald Trump is back in power, a trade war with top soybean buyer China is raging, and growers are coping with prices that are near the lowest levels in years. Huge crops ahead are only going to make matters worse.

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It’s a familiar picture for the more than 40 growers, analysts and journalists taking part in the annual Pro Farmer Crop Tour that started Monday and will cross seven states before ending in Minnesota on Thursday. In 2019, they were facing exactly the same conditions.

Back then, tensions were so high that a staffer from the US Department of Agriculture was threatened, forcing the agency to pull their people out of the tour as a precaution. Things are much calmer this year, but anxiety is slowly building up — after all, the US has yet to sell a single cargo of soybeans to China from the harvest that starts next month.

“I just wish they’d start buying again,” said Bill Timblin, a Nebraska farmer on the tour. He hopes the Chinese market isn’t gone for good.

American farmers, a key voting bloc for Trump, are growing increasingly worried as harvest approaches. In a letter to the president this week, Caleb Ragland, who heads the American Soybean Association, warned growers are near a “trade and financial precipice” and cannot survive a prolonged trade war with China.

“Soybean farmers are under extreme financial stress,” he said, urging the administration to reach a deal with China to remove duties. “Prices continue to drop and at the same time our farmers are paying significantly more for inputs and equipment.”

A gauge of grain prices tracked by Bloomberg fell earlier this month to the lowest since the pandemic in 2020.

The USDA is already forecasting a record corn crop for the season starting in September. While the soy harvest will be smaller than last year as farmers planted less, yields are on track to hit a record.

Partial results from the crop tour indicate bigger corn crops than last year in all states but Illinois. Indiana is currently the only state where soybean counts were lower than in 2024. Scouts crossed Ohio, South Dakota, Indiana, Nebraska, Illinois, Iowa and Minnesota. The combined result is expected on Friday.

In typical years, China buys on average 14% of its estimated soybean purchases before the US begins gathering its crop on Sept. 1, according to an analysis by the American Soybean Association provided to the administration. The impact is being felt from Chicago to the Pacific Northwest, which is home to several export elevators dedicated to shipping American crops to Asia.

Steve Swanhorst, a South Dakota farmer on the tour, said he isn’t surprised. Trump was transparent about his plans on a variety of issues including tariffs and immigration, he said in an interview.

“We had to know it was going to get rough,” he said. “You’ve got to give Trump some credit because he isn’t scared to get out of the box.”

Chip Flory, who has taken part in all but one tour since 1988 and is now one of the hosts, is still positive.

“China has the need for soybeans,” he said. “There is going to come a time when they have to book beans.”

Thousands of miles away from the crop tour, in Washington DC, the head of the US Soybean Export Council echoed that idea.

“We are optimistic that some sort of a trade deal will be made soon,” Jim Sutter, USSEC’s chief executive officer, said in an interview at an event hosted by the group. “We don’t know exactly how soon.”

Luke Lindberg, the USDA’s undersecretary for trade and foreign agricultural affairs, said the government has created “very real” opportunities to get American products into new markets and that sales to destinations other than China are growing as a result.

“The combines are firing up, and we need to get that soy crop sold around the world, we’re very aware of that,” he said at the USSEC event. “There are deals on the horizon that will make a significant impact for the American farmer.”

Still, concerns about China’s absence from the market at a time when growers are expected to harvest big crops are generating anxiety beyond the crop tour.

At the Iowa State Fair last week, Aaron Lehman, president of the centrist Iowa Farmers Union, said trade is top of mind after the US lost foreign markets during Trump’s first trade war with China. The Asian nation turned to South America for supplies instead.

“Last time we went through this we lost lots of customers overseas and they have not come back to us,” said Lehman, who grows corn, soybeans and hay in Polk County. “We know there are things we need to do to get to fair trade for farmers, but we are not getting any closer to that with this approach.”

--With assistance from Michael Hirtzer and Andrew Harrer.

(Updates locations in 10th paragraph.)