Farm groups warned senators Wednesday that the industry is facing an increasingly uncertain policy environment – with trade, immigration, tax policy and funding questions weighing on U.S. farmers – adding to the many long-running economic challenges.
“Recent executive actions are creating concern for farmers and communities,” President of the National Farmers Union Rob Larew told the Senate Agriculture Committee.
Among the top drivers of new uncertainty, farmers warned, is uncertainty around U.S. trade policy. President Donald Trump has threatened Mexico, Canada, the European Union, Colombia, and BRICS nations with new tariffs, at various times, and has actually implemented a new 10% duty on China. Canada and China have already outlined plans to retaliate against U.S. agriculture exports, and Mexico has vowed retaliation would follow.
“We stand on the front lines of some of that retaliation,” Larew said. “Too much is at stake to have that disruption.”
Even absent retaliation, fertilizer prices have already responded to the tariff threats. Josh Gackle, chairman of the American Soybean Association, warned that U.S. farmers are less able to absorb trade shocks than they were in 2018, when Trump initiated a trade war with China. Farm profits have fallen and incomes are set to slip further, Gackle said. Input costs are also higher, and prices for a number of commodities have declined since 2022.
“The margin for error this year, in 2025, is much different than 2018,” Gackle said.
During her confirmation hearing last month, Agriculture Secretary-nominee Brooke Rollins said that the Trump administration would provide another round of financial aid to farmers in the event of retaliatory tariffs. But witnesses stressed that farmers would rather see new markets open to sustain their agriculture exports and offset export losses to existing markets.
“We need more fair trade deals,” American Farm Bureau Federation President Zippy Duvall told senators. He echoed Iowa GOP Sen. Chuck Grassley’s disappointment that the Biden administration had not done more to negotiate trade deals with market access provisions.
“We haven't seen it for almost a decade now – really getting fair trade deals to be put in place and stick, with good rules, and to keep people working,” Duvall said.
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India and other markets in Asia, could be promising trade deal candidates, Duvall said. Larew also stressed the importance of preserving duty-free access to existing markets.
In addition to uncertainty for U.S. agriculture exports abroad, lawmakers heard that multiple executive actions have left farmers in the dark at home over their future access to labor and financial support.
Trump has ordered a review of federal government programs, including dozens at the Agriculture Department, in an effort to cut federal spending. An Office of Management and Budget memo last week ordered a spending pause while the review was carried out, but a federal judge temporarily blocked the hiatus.
“No one knows what funding will be available or if key programs will have the staff needed to operate,” Larew told lawmakers. Agri-Pulse reported on Monday that the Trump administration had stopped payments to at least one major climate-smart commodities project. Larew told Agri-Pulse outside the hearing room on Wednesday that he had seen evidence of farmers losing access to other payment programs.
Larew said that a community in the Midwest had not received payments promised under a water and waste disposal loan and grant program. Under the program, investments in a rural wastewater system were supposed to be matched by a local USDA entity.
“That community acquired loans in order to secure that match, and now this money from the federal government is frozen all in uncertainty,” Larew said. “They've now made this huge investment and obligation.”
Asked outside the hearing room whether he had heard concerns from farmers that a funding freeze is causing uncertainty in conservation programs, Sen. John Hoeven, R-N.D., said that the freeze "shouldn't affect them."
"If there are questions, we’ll work through that,” Hoeven said.
The future efficacy of USDA is also in question, Larew told lawmakers during the hearing. The Trump administration is phasing in a return to in-person office work. But Larew pointed out that some officials don’t even have offices to return to as they have been fully remote for years.
The NFU and USDA signed a memorandum of understanding last year to gather feedback from farmers on their interactions with USDA Farm Service Agency staff in an effort to improve customer service. Larew said that he is concerned about what both the efforts to reduce government spending and the return to office order could do to USDA staffing levels in rural communities.
“That direct connection to farmers and ranchers for the important USDA programs” is invaluable, Larew said. “Staffing and the continuity of those operations is a challenge in the best of times,… right now, that's just being exacerbated.”
The president has also pledged to deport millions of undocumented migrants. Around 40% of the U.S. agricultural workforce lacks legal status, Duvall estimated, arguing that such a move would be “devastating.”
If Trump presses ahead with his deportation plans on the scale he has proposed, Duvall warned “you would see farms go out of business, and we could see interruption in our food supply” at a scale comparable to the COVID-19 pandemic.
It isn’t only executive actions that are contributing to farmers’ sense of precariousness and instability, the ag industry representatives argued. A lack of clarity around the legislative process for reconciliation and uncertainty over what tax cuts will be extended are casting doubt over future tax burdens.
Aver 90% of farmers operate under pass-through entities, Duvall told lawmakers, which received a 20% tax deduction from the 2017 Tax Cuts and Jobs Act. Section 179 also allows small businesses to instantly write off qualifying expenses – which Duvall said farmers have used to reinvest in businesses and implement climate and conservation practices.
Further, Duvall said farmers are concerned about a possible estate tax increase, should the TCJA expire.
“When a family person dies and we have to sell part of the farm to pay the taxes,” Duvall said, “it never comes back.”
Almost every witness that spoke at the hearing – more than ten in total – implored the senators to help reduce the economic and policy uncertainty by swiftly passing a farm bill.
“Farmers desperately need the improved long-term stability only a multi-year farm bill provides,” said Amy France, chair of the National Sorghum Producers. Such a bill, France and others said, must include updated Price Loss Coverage prices to account for modern input costs, increase farm program funding and strengthen crop insurance and commodity programs, among others.
“I don't think I've ever heard more uniform testimony,” Committee Chair John Boozman, R-Ark., told the witnesses. “It just demonstrates how difficult it is doing what you do.”
Rebekah Alvey contributed to this report.
