Roller-Coaster Trade Policies Are Having an Effect on Ag Economy
Published: Friday, August 15, 2025
The following is from Alan Guebert, a freelance agricultural journalist from Illinois.
Contrary to popular belief, economists don't read tea leaves, and most—like the rest of us—wouldn't know a tea leaf from a spinach leaf.
Economists do, however, gather bushels of hard data on goods like used car sales, imported shoes and grocery prices to estimate how the U.S. and global economies might react (or "gain insight," as many might say already hedging their predictions) to everyday occurrences like factory closings, crop reports or new technologies.
Also, different economists can differ on what each other's collective data means. Does it, like in late July, suggest the U.S. Federal Reserve, the global economy's key manager, should nudge interest rates lower to spur more spending or should it hold rates steady to hammer any threat of inflation?
In normal times—whatever that might be—there's no easy answer to that seemingly straightforward question.
Now mix in the politics of today's Trump administration on trade (whatever that is on any given day), war (no "first day" peace deals in Ukraine, Israel or Iran are in sight), and government spending (billions in budget cuts, trillions in new federal debt) and no economist worth their pocket protector would dare to forecast where global economic growth—or recession—will be a year from now.
Here's what we do know, though: The American economy slowed through the first six months of 2025 because, according to economists tracked by Bloomberg, "consumers ... and companies sought to inoculate themselves from the Trump administration's frequent and unpredictable shifts in trade policy."
Farmers and ranchers know this better than just about anyone because few elements in the U.S. economy are as export dependent as ag commodities.
This year's U.S. corn exports show just how upside down the ag export picture is for farmers and ranchers. According to USDA's latest export projections, 2024-25 corn exports will hit a record 2.75 billion bushel despite American sales to China, once a top U.S. corn market, forecast down "a staggering" 79% from just a year ago.
What does it mean to farmers to have record export corn sales without your top customer vacuuming up its usual share?
Just about what you would expect. New crop fall cash corn bids are sinking faster than Chinese corn purchases, well below $4 per bushel in most corn-growing areas.
In fact, outside of cattle—the U.S. cattle herd hasn't been this small since 1973—almost all export-dependent commodities like corn, soybeans, wheat and cotton are either below or well below their year-beginning price. Why?
Again, Bloomberg sees a likely answer in the White House's roller coaster trade policies.
"Because swings in trade and inventories have distorted overall GDP this year," it reported July 31, "economists are paying closer attention to final sales to private domestic purchasers" as a better way to measure how the economy is performing.
That new tea leaf, private domestic purchases, "... rose 1.2% in the second quarter, the slowest since the end of 2022." As such, it noted in quoting an actual economist, "The trend of cooling is very clear ... and growth now appears to be slipping below its longer-term potential pace."
This isn't good news for U.S. farmers. It means USDA's already low, July predictions for 2024-25 season-average farm prices are likely too high. New estimates will be posted Aug. 12, after this column's deadline, but current estimates (all per bushel, cotton per pound) now peg wheat at $5.40, corn at $4.20, soybeans at $10.10 and cotton at 62-cents.
That's not great news and worse, the spinach, er, tea leaves say that firing any current federal official won't change any of it.
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