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America First doesn’t necessarily mean Buy American, at least not yet.
Producers of fruits and vegetables, cotton and other commodities would like to see the Trump administration’s America First agenda turned into incentives and regulatory actions that promote consumption of domestic crops. Success has been somewhat elusive.
In what looked like a big win for industry, the outgoing Biden administration in 2024 set limits on the amount of non-domestic foods that schools could serve. The limits were to start at 10% in the 2025-2026 school year and drop to 8% for 2028-2029 and 5% for 2031-2032.
However, one of first acts of USDA under the new Trump administration in February 2025 was to allow states to waive the limit for 2025-2026 at the request of school districts.
USDA hasn't said what it will do about the upcoming school year. Representatives of producers and processors are now lobbying USDA to not extend the accommodation. But the School Nutrition Association, which represents school food officials, is urging the department to extend the offer of waivers. The group says the Buy American limits would further increase food costs.
Industry is struggling to get traction with Congress on legislation that would create tax incentives for food processors and apparel companies to use American-grown commodities.
“If we collectively can't get across the finish line with this administration and this Congress on this issue. In my opinion, we may never do it,” said Rich Hudgins, president and CEO of the California Canning Peach Association.
Hudgins believes U.S. processors are unfairly losing market share to products from countries such as China. He fears fresh produce growers will see increased foreign competition as well if something isn’t done to discourage it.
“My belief is that processed fruit is the canary in the coal mine. But it's not stopping with just processed fruit. … So, this is an important issue for us to fix,” he said.
Reese Langley (left), Hank Reichle and Rich Hudgins (Agri-Pulse photo)In announcing the accommodation a year ago, USDA's Food and Nutrition Service said there were “concerns about certain products which are integral to school meals menus and the program’s nutrition standards that may be difficult to procure domestically. These products include cereals and fruit juices as well as popular fruits and vegetables.”
Hudgins said the industry has been told there were concerns in part about the availability of oat cereals. The vast majority of oats used for U.S. food products are grown in Canada. According to Cereals Canada, it exports 81% of its oats to the United States, giving it a 96% market share.
FNS didn't immediately respond to a request for information on the number of waivers that have been granted to schools or the agency's plans for the 2026-2027 school year.
Smaller schools report more challenges with domestic mandate
A survey of school meal directors conducted by SNA last fall found that Buy American requirements were a significant concern for 30% of districts and a “moderate” challenge for another 56%.
The concerns are considerably more pronounced for smaller districts. According to the survey, 36% of districts with under 1,000 students said that limits on foreign foods were a significant concern, compared to only 15% of districts with more than 25,000 students.
“We have definitely talked to USDA about challenges with this, and hope that they will extend the accommodation plan,” said SNA spokesperson Diane Pratt-Heavner.
Diane Pratt-Heavner (SNA photo)“We anticipate this will be an ongoing challenge for our members, not only from cost and how do we get the produce that we need and the foods that we need domestically to meet these caps, but also from a record-keeping perspective,” she said.
Distributors sometimes substitute foreign-grown foods such as grapes even when schools order U.S.-grown, she said, and the switch has to be documented.
SNA also has raised concerns about the Trump administration’s push to increase servings of meat and other proteins and reduce added sugars to meet recommendations of the new Dietary Guidelines for Americans. Schools also will be under pressure from the administration to do more scratch cooking and reduce their reliance on processed foods.
“It's possible that with this new guidance, USDA might require a protein at breakfast, which would certainly require schools to get additional funds, because protein choices are typically significantly more expensive than grain options,” Pratt-Heavner said.
Tax credits proposed to encourage domestic sourcing
Meanwhile, commodity groups and processors are urging lawmakers to grant tax incentives for using domestic commodities. Getting any kind of bill through a narrowly divided Congress is a challenge, especially in an election year, although bills have bipartisan support.
A bill called the Grown in America Act would allow a 25% tax credit for purchases of domestic rather than foreign agricultural commodities. Companies would initially be eligible for the credit if 50% of their ag purchases are domestic. The minimum would rise by 5% a year to 85%.
Based on an analysis by Texas A&M University economists, the credit would cost about $13 billion over 10 years while generating nearly $2.4 billion a year in economic output and creating about 7,000 jobs a year, said Reece Langley, a lobbyist who leads Ag Investment for America, a coalition of industry groups that backs the legislation.
Coalition members rice, wheat, barley, sorghum and catfish producer groups as well as FMI-The Food Industry Association, the National Association of Manufacturers and U.S. Chamber of Commerce.
“We're focused on tax policy and tax incentives that can help ensure that U.S. food and beverage manufacturing companies are sourcing as much of those commodity inputs from the U.S. as possible, and we think there's huge potential there to grow that purchasing power using these tax credits,” Langley said at the National Council of Farmer Cooperatives' recent annual meeting.
A bill called the Buying American Cotton Act would offer a tax credit to apparel manufacturers that use U.S. cotton. The credit would be available to foreign as well as domestic manufacturers but would be larger for U.S. plants. About 80% of U.S. cotton is exported and made into clothing, some of which returns to the United States.
According to a bill summary, the value of the credit at a market price for cotton of 85 cents per pound would range from 15 cents to $1.33. The lowest value would be for cotton fiber exported to a country that doesn’t have a free trade agreement with the United States. The highest value would be for U.S.-manufactured fabric.
“There's no doubt that it will change behavior and to the benefit of U.S. agriculture,” said Hank Reichle, president and CEO of Staplcotn Inc., a Mississippi-based cotton marketing cooperative.
Reichle argues that the cost of the credit should be at least partially offset by reduced farm program payments. “If people are using the tax credit, you're going to see that the price of U.S. cotton has to go up,” he said
