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Soybean farmers across the U.S. are facing a uniquely difficult harvest season. Nominally priced at about $24.5 billion, soybeans are the US’s top agricultural export, popular due to their flexible usage and stability in storage. The world relies on products born from soybeans, which are used for everything from tofu to livestock feed, and people will pay big money for them. Last year, China bought around $12.6 billion worth of American soybeans (about half the total, as usual), with the European Union ($2.45 billion) and Mexico ($2.3 billion) following in second and third place. But as a result of President Trump’s ongoing trade war, China stopped buying soybeans from the US in May, leaving the agricultural industry with a gaping void that has exposed the true instability of the farm economy.Â
There’s little prospect of those sales ever coming back, as China has already found replacement soybeans from Brazil and Argentina. Without that export market, the American farm economy is in deep and immediate trouble. Yet there are more profound problems revealed by this crisis: namely, an attachment to large-scale monocrop farming and a corresponding habit of passing farm bailouts when this leads to disaster—as it often does. In the past year, two farm aid packages have been passed, and another is likely. But without deeper reform, this will bank up even more problems for the future.
A new report from Farm Action published this month details the multiple problematic elements contributing to the precarious state of the farm economy. Farm Action is a nonpartisan, farmer-led watchdog group that works to support the needs of farmers, workers, and rural communities over the interests of the government and large corporations. “We published this report because this is really capturing some of the resiliency issues that we’re concerned about with this system, where we really are dependent on an overproduction of certain crops, and those crops are very reliant on a handful of global trade partners,” Sarah Carden, Farm Action’s research and policy director, told the Prospect.
Related: Trump Labor Department Says His Immigration Raids Are Causing a Food Crisis
After opting not to purchase soybeans from the U.S., China turned to two of the country’s top competitors: Brazil and Argentina. In September, China bought 93 percent of Brazil’s soybean exports, and purchased millions of tons of soybeans from Argentina when the country dropped its grain export taxes. This has been a godsend for Argentina, which is on the brink of economic collapse touched off by its ultra-libertarian president, Javier Milei, but still not as useful as the $20 billion in American aid that Trump recently directed to the country. It’s remarkable: Trump is simultaneously wrecking American agriculture while also subsidizing its foreign competition, where several friends of Treasury Secretary Scott Bessent coincidentally have large business interests. America first!
Many American farmers see this as a betrayal, and needless to say, it also highlights the inconsistencies in US agricultural strategy. As the Farm Action report points out, it’s a move “that props up global competitors while neglecting the farms that feed our own nation.”
Now, farmers might be slated to receive their third round of farm aid in less than a year, once the government shutdown ends. It’s a policy move that has become a traditional fixture in the agricultural industry. Historically, the bailout cycle has provided farmers with billions of dollars in relief payments when markets flounder. In 2020, Congress approved around $35 billion in emergency aid to farmers, which arrived on top of around $10 billion in previously appropriated farm subsidies. Before that, during Trump’s first term, the U.S. trade war with China resulted in a $28 billion farm bailout, which mostly went to producers of commodity crops.
Though these payments are meant to help farmers, they actually weaken the agriculture industry, argued Carden. “These programs are still paying out high when market conditions are good, when they’re supposed to pay out big when market conditions are bad.” Inflation then becomes a massive issue that only stands to worsen with each turn of the bailout cycle. Carden points out the unsustainable nature of this pattern: “When farmers get these big payouts, they can capitalize that into equipment and farmland, and that’s driving up prices … they need more bailouts, and so it’s a self-perpetuating cycle.”
The Farm Action report acknowledges how deeply entrenched issues within farm policy in the U.S. have resulted in an agricultural economy that is particularly unstable. Since the passage of the 1996 “Freedom to Farm” Act, farmers have been encouraged to plant as much as possible, particularly crops that have high and reliable success rates, such as corn and soybeans. However, farmers are expected to do so even when market demand is not strong, creating a surplus of products that oftentimes aren’t used to feed people. That in turn rules out the possibility of cultivating other crops like fruits, vegetables, nuts, and so on that are more finicky and labor-intensive but much more lucrative and nutritious.
When it comes to receiving assistance from the government, corn and soybean farmers tend to get more support from subsidies, because their crops serve a wide range of uses, the most notable being animal feed and ethanol. Growing corn and soybeans is “the smart choice to make if you are going to farm,” said Carden. Risk management, a steady supply chain, and price support are all benefits of a surplus of these crops, but in the end, the real winners end up being large conglomerates. “The primary beneficiaries of this are major meat packing conglomerates that end up with cheap animal feed access, and meanwhile, we have food security issues,” she said.
Farmland consolidation has squeezed smaller farmers out of the market, and has led to a handful of corporations and large family-owned operations controlling most of the United State’s food production, processing, and distribution. These powerful quasi-monopolies wield intense power over the remaining smaller farmers who rely on such conglomerates to purchase their crops, trapping them in a position where they are devoid of bargaining power and lose the ability to designate their own prices and terms.
As a result of a farm market that is both under-regulated and over-subsidized, a huge nation with some of the most productive land in the world can no longer supply itself with food. By the end of 2025, the U.S. is projected to run a $47 billion agricultural trade deficit, and it can mostly be attributed to the rising prices of importing essential foods such as fruits and vegetables. A problem that often goes unspoken is that the U.S. relies on other countries to import the foods we don’t think twice about seeing in the grocery store. “Americans should be really concerned that the U.S. is no longer in a position to feed ourselves,” said Carden. What’s worse, our taxes are funneled into bailouts for the farm industry, which mostly ends up in the pockets of major players in the agricultural sector. The average person doesn’t enjoy the benefits of propping up large commodity producers—meat and other food items remain unaffordable.
A farm market that is both under-regulated and over-subsidized, America is a huge nation with some of the most productive land in the world can no longer supply itself with food.
Breaking out of this cycle of bailouts and overproduction requires an intuitive, sustainable approach. The Farm Action report offers four commitments that can help both farmers and consumers move forward in a way that centers fairness, food security, and diversity.
First, farmers should be incentivized to grow non-commodity, non-livestock feed crops, such as fruits and vegetables, which will benefit local communities. Improving risk protection for these farmers will encourage the growth of more crops that we can actually eat, and that don’t need to be imported. Doing so requires breaking away from the pattern of automatically bailing out the agricultural sector every time it implodes, which Farm Acton highlights as another priority. Federal funding instead should be transferred to programs that encourage healthy food production and resilience on farms. Investing in local infrastructure can go a long way, and by ensuring that farmers can successfully process, store, and distribute their products regionally instead of solely exporting them globally.
Supporting antitrust legislation must be a priority for policymakers. Farmers should have the ability to negotiate and advocate for themselves, and should not be under the thumb of corporations that have seized control of strategic production and distribution bottlenecks. Farms themselves should also not be so large that they get their own market power. By passing and enforcing antitrust laws, small farmers will be better able to compete in all areas of agricultural markets, restoring autonomy and fairness to the industry.
This is not a completely unsolvable problem. “We’re lucky to live in a country that has really rich farmland and really terrific farmers,” said Carden. “There’s an opportunity for Americans to be larger beneficiaries of that, even those who don’t have robust food systems.” But we can’t wait to start reforming the farm system—the sooner structural changes can be implemented, the better things will be for both farmers and consumers. “We just need to start making those changes.”