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Marty Richardson has been a farmer in northwest Missouri for years, so many years in fact, that when we asked Marty how long it's been, he had to think about it.
Oh, let's see, I'm seventy three, So if I started when I was in high school, whatever, that has up to be sixty years fifty five. I lived in the house I was born in, and so living on a farm, my generational farm here, so I've been kind of farming my whole life.
This is a family business. Marty's sons are also farmers, sixth generation, so they've had a front row seat as agriculture has evolved in recent decades.
Used to be in the hog business, but we got out of that twenty years ago. And used to be in the tobacco business, and we got out of that.
These days, Marty's focus is on cattle and row crops, mostly corn and soybeans.
Well, I think the twenty five years we had excellent yields. We had really good corn, really good beans. Of course, the cattle markets an all time high.
But there's a problem, and it's a big one, a threat to his bottom line and thousands of other farmers.
We're just losing our markets, and then we've lost that China market, and combined with high input costs for seed, chemical, fertilizer, and fuel, and a farmer can usually stand one or the other, but when you get squeezed from both ends, it's almost impossible to make any money.
This week, the White House stepped in to help farmers facing that two sided squeeze. On Monday, President Trump announced a highly anticipated multi billion dollar relief package.
We're going to be giving and providing it to the farmers in economic assistance.
And we love our farmers, and.
As you know, the farmers like me. That relief package includes twelve billion dollars in payments money. The US Agriculture Secretary of Brooke Rollins called a bridge aid meant to help farmers during a difficult time.
Trump has been saying for quite a while that you know, he's going to help farmers. He's not going to leave them hurting.
Aaron Aylworth covers agriculture for Bloomberg. She specializes in the grain markets, and Aaron says, this relief package comes at the end of what's been a painful year for many US farmers, like Marty.
It's happening now in large part because farmers have been struggling for a while, right, and that pressure has just been mounting. And farmers are this key voting block for the president. They overwhelmingly supported him in the election and for the Republican Party, and so with midterms looming, it's like, do we want to leave one of our biggest voting bases, you know, in pain? And the answer to that, of course versus no.
I'm David Garrett and this is the big take from Bloomberg News today on the show, US Agriculture at an inflection point, the role farmers are playing in the US China trade war, and how much of a difference that twelve billion dollar farm bailout is likely to make. I have a very basic question that is, at this moment, at the end of twenty twenty five, how is the American farmer doing?
Broadly speaking, they are hurting. I talked to a farmer yesterday, a Rice farmer, and she was telling me that she's been on the phone with a lot of other farmers and those conversations, quite frankly, are tearful. People are worried about their business, about their family farm, essentially about their generation's old legacy. In a lot of cases, right, they don't want to be the person to have to close the door. And that has created a huge mental tool.
And I imagine the into bankruptcy as well. It's low large for load of these.
Farmers, that's right. Courtant data shows that Chapter twelve bankruptcies, which are for farms, are on the rise, and they have been for the last two quarters.
Aaron says, there are a number of reasons why many US farmers are going to bind this year. The big one is costs are going up.
It seeds, it's fertilizer, its equipment, it's everything that you need to put something in the ground, watch it grow and then harvest it. So those prices are up, Commodity prices are down, and then you tack on inflation, right, and everything is just topsy turvy.
Farmer's income is also falling. According to the US Agriculture Department, income from selling key crops, including wheat, corn, and soybeans, has declined since twenty twenty two. And of course, the United States is ongoing trade war with China, which has put a wedge between row crop farmers like Marty and his biggest customer and put sky high tariffs on critical
inputs like machinery, fertilizer, and seeds. Could you describe the challenges of this trade environment when it comes to farmers with what the export environment looks like, and we hear a lot about China not fulfilling its obligations when it comes to purchasing soybeans. Can you describe the way that this administration's trade policies have sort of reshaped the environment for soybean farmers in specific.
So this actually goes back to Trump's first administration, right, and a trade war in twenty eighteen and twenty nineteen, and that trade war exacerbated a shift that China was already trying to make where they're trying to diversify so they're not as dependent on the US as a supplier, right, And so they started buying more from Brazil, and US farmers haven't really gotten that market share back. And so now with this administration and the tariff policies again pushing
China to other suppliers, American farmers are losing out. They're losing that market share again. And you saw in May China stopped buying soybeans from the US, and that's a huge deal because sowebeans are basically the US's biggest agricultural export, right, and they go to China. You know, China uses soybeans for it gets crushed into soybean meal for animal feed, mostly for pigs, and it gets used in soy oil,
that kind of thing. So it's a big product, and so to not be moving US supply to them, it's a big gap. It's a big loss of a customer.
USDA data showed it between twenty twenty and twenty twenty four, China has committed to buying between thirteen and twenty eight million metric tons of US soybeans each year. In twenty twenty five, that number dropped to under half a million.
And so they stopped buying in May, and that was to essentially try and and gain leverage in these trade talks with the Trump administration, and I think it largely worked, right. They didn't buy in September when the new marketing year started, and so September everybody's like waiting for these purchases and they're like, oh no. Like the USDA data that comes out, you just keep seeing zero zero zero.
For Marty richardson the politics behind that business shift were clear.
I hate to say it like this, but he's just kind of This country doesn't have a whole lot to trade to other countries except food or agricultural products. So sometimes in a trade deal we get held hostage the American farmer because that's the only thing we got to barter with.
Once Trump and she talked in late October, and you know, the Trump administration said, okay, China has pledged to buy these twelve million soybeans.
That's twelve million tons of soybeans.
The market went nuts, and you saw a huge jump in soybean prices, which has started to fade now because China hasn't been buying at a fast paced They have been buying, but they're still buying from Brazil, and so Brazil and South America have become just a you know, an increasingly bigger and bigger competitor. And the economists that I talked to don't think that that's going to swing back to the US, especially not immediately.
Neither does Marty Richardson.
I mean, what's odd to China coming back and buying beings like they was three or four years ago, slimmed to none because They've got that Brazil down there. They're raising huge cross and I can't see fuel going down much, fertilizer going down much, or seed going down much, or john deer going down. I mean, that's called inflation. When everything goes up, very few things go back down. And corn and beans and wheat and rice and cotton have not had that inflationary jump, but the rest of everything
else has had. You're just not going to see those main four or five things that we buy to raise a crop. You're not going to see those retreat much.
The relief package Trump announced on Monday is designed to offset some of that lost business in the form of one time payments, which will be parceled out to growers of certain row crops, including soybeans, wheat, and sorghum, and to growers of specialty crops like sugar. In a press release, the administration said those payments are intended to help farmers whether temporary trade market disruptions and increased production costs, which
it says stem from Biden administration policies. It's aimed to help them stay afloat until investments from the One Big Beautiful Bill Act going to effect in late twenty twenty six. Aaron says the administration has yet to release key details of how the aid is going to be distributed. For instance, what kind of relief is each crop going to qualify for.
That's the biggie. That's really what's going to tell you who's getting the most help and who's not. So until we have that number, we're a little bit in the dark. We know it's coming. The administration has said that they expect to deliver all of the aid by the end of February or before, so we will see, but we are still waiting for a lot of those key details.
There will be folks listening to this who are wondering why farmers are getting this relief package. Of all the constituents across this country who have been changing behavior, the way they work, the way their business is oper rate because of these trade policies, why are farmers being singled down? What's your answer to that question.
I mean, one, they're such a huge, huge voter blood.
It's a political reason.
Ye, yes, it is a political reason. They are huge supporters of this administration and a key voting base for Republicans. So I think that's a big piece of it. Another piece of it is. You know, the egg industry is huge, and soybeans are the biggest US agricultural export, right, I mean, it's it's big business. So I think those two things, politics and business, power and.
Money coming up after the break the politics of US agriculture now and historically, and what's at stake for the industry if current trends aren't reversed. The trade war between the US and China has posed a significant challenge for US soybean farmers, but American agriculture has also been impacted by changes the Trump administration has made to the federal
government itself and what it prioritizes. Bloomberg Agriculture reporter Aaron Aylworth says the country's farming industry and its politics have long been intertwined.
Agriculture for the US is it's a huge source of power and leverage. We had, you know, we've historically had this thing called bread basket diplomacy, where we have been able to send our surpluses to other countries either as aid or we have withheld it as punishment, depending on whether you're an ally or an enemy, right, And that has been hugely politically helpful for a long time. That has been fading away. And that's what I think we
are watching a piece of right now. Is is that kind of shift where you know, we may have been the top exporter of corn, soybean, and wheat for decades, but are we today not so much? You know, we've fallen down in those ranks a little bit. And that's what we're watching in real time now. I mean every day I start my morning going, is there a flash sale of soybeans to China? Or did they buy from Brazil and Argentina again? And that's exactly what the traders
that I'm talking to are watching too. Who's buying what and where are they buying from, especially if it's not the US.
I want to stick with this because you're kind of indicating that US agriculture played this role in buffeting or enhancing the us is ability to project soft power around the world. We tend to focus on the business side of this, the commercial relationship, But how big a deal was that when you look at the agriculture industry broadly, the way that it kind of dovetailed with or complemented kind of larger diplomatic or geo of political ambitions the US had.
Well, I mean you look at what we did with our European allies in fighting Germany, right, and at one point getting them food supplies, agricultural supplies was just as important as getting them weapons. I think that's a big example these days. You know, the US has been known for sending so much food aid around the world through the UN and other programs. You know, is that changing
with this new administration of these policies. Yes, right, So I think that's that's in part how China was able to weaponize soweebeans, if you will, because they know that it's a big business and a big part of our i think global identity to be this food supplier, and so by taking that business away and shifting it elsewhere, they had the ability to say, we're not just going to swallow this terraf for this policy that you're trying to force on us. US.
I think there's the old line that farmers have to be optimist by nature all of the difficulties they face, which makes me wonder when you look at the agriculture environment today, what is giving them reasons to be hopeful about the industry.
Yeah, they are hopeful for new markets, right, I mean I talk to farmers almost every day at this point, and they're saying, like, listen, the tariffs are hurting us, but at least somebody is negotiating. They have felt like they haven't had the best deal in the past, that they weren't necessarily getting the fair prices that their crops should and so now they see somebody at least trying to open conversation and get it new markets. Now is
that working? You know, depends on who you ask. The administration has touted a number of deals that have come through, but some market watchers will point out how many of those actually have like a written, signed deal behind it. That's one of the key things that we're waiting for with China is like everyone's like, okay, we have a pledge, a commitment. Where's the signed piece of paper that lays out exactly what the commitment is and what the rules
are basically. And until we have that, do we actually have a deal? Big question.
What's at stake for the US if the agriculture industry succeeds or fails. So it's under all of these constraints, it's a very difficult period. How should we think about its importance broadly to the health of this country?
To the US. You know, before I started this speed, I didn't realize just how many things agricultural products are in. Right, It's not just the.
Food we eat.
It's some of the stuff that's in near gasoline at the gas station. It could eventually be used to fly your airplanes. Right, it's going into your dog food, it's feeding the cattle. It's this massive business ecosystem. And if that fails, if that big of an industry fails in the US, I think we've got a real problem.
Marty Richardson in Missouri isn't optimistic that farmers like him will ever see Chinese soybean purchases return to where they were before the trade war, or that the Trump administration's farm bailout will make much of a difference for farmers.
This bridge that are given us, or this hand out some people call it, or welfare, some people call it. It's really not even a band aid. Let me use this analogy. Your short two hundred dollars in your banking camp, and I give you thirty bucks. Yeah, that's going to help, but not really so. And I'm not saying he should have give everything we lost, Don't get me wrong there, but I can't see it's going to do anything.
He told our producer David Fox that finding new markets, both foreign and domestic, is critical for the next generation of US farmers. But for the moment, he says, it looks like there's a long road to ho.
I got a grandson, and the way the world is now, I'd love to see him farm. But he's only ten, so in ten years it's no different. I might tell him maybe he needs to do something different. He's going to be in the NBA, he told me so.
I doubt it, but well, at least he's got a backup plan.
There you go, There you go.
This is the Big Take from Bloomberg News. I'm David Gerry. To get more from The Big Take and unlimited access to all of the Bloomberg dot Com, subscribe today at Bloomberg dot com slash podcast offer. If you liked this episode, make sure to follow and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back tomorrow.