Trade War 2025
Tariffs are back in the spotlight in 2025, and for Midwest farmers growing corn, soybeans, and wheat, uncertainty is beginning to grow. These trade taxes—whether on your exports or the inputs you buy—can shake up grain prices and your bottom line.
How Tariffs Move the Needle on Grain Prices
Tariffs change the math on what you grow and sell. If the U.S. slaps a tariff on grain exports—like a 20% tax on soybeans headed to China—your buyer’s cost jumps. Say soybeans are $10 per bushel; that tariff adds $2, making your beans $12 overseas. China might balk and buy from Brazil instead, leaving you with less demand and a lower price at the elevator.
Flip it around: tariffs on imports—like fertilizer from Canada or tractor parts from Europe—hike your expenses. A 10% tariff on $1,000-per-ton nitrogen could mean $100 more per ton. If grain prices don’t rise to match, that extra cost eats into your margins. But if tariffs keep cheap foreign grains out, your wheat or corn might fetch a better price locally—assuming buyers don’t cut back.
Iowa, Illinois, Nebraska are part of the engine pumping out half the nation’s corn and soybeans. But where do these exports go? China takes over 30% of U.S. soybeans, Mexico grabs a chunk of your corn, and wheat heads everywhere from Japan to Egypt. When tariffs mess with those markets, the ripple hits home. Tariffs just pile on. They’re unpredictable, too—China might retaliate with its own taxes, like in 2018, when their 25% soybean tariff tanked prices below $9.
China’s soybean tariff slashed exports from $12 billion to $3 billion in a year. Prices dropped, and some farmers switched to corn or leaned on government aid to break even.
Strategies to Adapt
Farmers have weathered this storm before. Here are a few ways to tackle tariffs head-on:
Lock in Prices with Futures: If export tariffs loom, hedge on the futures market. Selling soybean contracts at $10 per bushel now could shield you if prices fall to $9 later. It’s not foolproof—basis risk and fees bite—but it’s a buffer. Talk to your grain advisor; they’ll run the numbers.
Cut Costs Where You Can: Import tariffs hiking fertilizer? Test your soil—maybe you can dial back nitrogen without yield loss. Precision tech helps here; variable-rate applicators save cash. Shop around for parts, too—local dealers might beat tariffed imports.
Store and Wait: Got a bin? If prices tank post-tariff, hold your grain. Markets often rebound—2018 showed it. Watch storage costs and condition your crop, but a few months could mean $1 more per bushel. Cash flow’s tight, so weigh this against bills.
Our Take
It is important to stay current on whether tariffs continue to be placed or not. It seems there are different headlines every day, so finding trusted news sources, and analyzing how policy will affect your farm is the priority. Keep informed on the Land Ledger podcast, where we interview industry experts.
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