American farmers are struggling with falling crop prices and diminishing incomes, raising concerns about a possible farm recession. A report by the Wall Street Journal has revealed that farmers in the US state of North Dakota are losing thousands of dollars despite operating large farms.
What the report says?
A Wall Street Journal report stresses the financial strain on farmers in North Dakota. These farmers, who manage 3,000-acre farms producing corn, soybeans, canola, and rye, are reportedly losing thousands of dollars.
The cost of essential farming supplies has increased dramatically. A bag of seed that previously cost $150 a few years ago is now priced at a staggering $230, the report notes. This sharp rise in agricultural product prices is contributing to the potential of a farm recession and possible shortages of agricultural products.
Struggling with declining crop prices, farmers and agricultural companies have experienced reduced income and have scaled back on spending, according to the report.
Trump’s stance
US President-elect Donald Trump has acknowledged the challenges faced by American farmers and has met with them to discuss their concerns. He plans to impose tariffs on certain agricultural imports from Canada and Mexico when he takes office in January 2025.
Trump’s plans for tariffs on Canada, Mexico, and China
Trump has announced plans to impose tariffs on Canada, Mexico, and China. He intends to implement these tariffs shortly after taking office on January 20.
Trump said he would enact a 25% tariff on all goods from Canada and Mexico, citing concerns about drug trafficking, specifically fentanyl, and border crossings. “On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” Trump said. The US receives a large portion of its imports from these two countries, with over 83% of Mexico’s exports and 75% of Canada’s exports going to the U.S. in 2023.
Trump also announced a 10% tariff on Chinese imports, “above any additional tariffs.” This comes after his previous campaign promises to end China’s most-favored-nation status and impose even larger tariffs.
The proposed tariffs seem to conflict with the existing USMCA trade agreement, which Trump signed, and which largely eliminated tariffs between the three North American nations. The agreement contains a clause allowing for renegotiation or withdrawal in 2026.
While the overall stock market has performed well this year, both domestically and internationally, the rising cost of agricultural products, described as “farming inflation,” is impacting farmers significantly.
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