Donald Trump, having promised to “NEVER LET OUR FARMERS DOWN”, appeared to come through for them this month when he unveiled a $12bn aid package. Industry leaders say thousands of farms will still go bust this year.
While the US president has vowed to increase domestic farm production, and even claimed this formed a “big part” of his plan to lower grocery prices for Americans, many US farmers are grappling with mounting financial issues – compounded by Trump’s agenda.
Grain farmers, in particular, have been hit by trade disruptions caused by tariff hikes, and $11bn of the US Department of Agriculture’s Farmer Bridge Assistance Program will go to row-crop farmers. Trump’s trade war with China has hit soya bean farmers the hardest, as China bought 54% of US soya bean exports last year, according to the American Soybean Association.
Table of US soybean exports
But the one-time payments do little to assuage the financial stressors that row-crop farmers have faced for the past three years because of rising input costs and lower crop prices. This year alone, US crop farmers have lost $34.6bn, before crop insurance and other government support, according to the American Farm Bureau. Neither row-crop, nor specialty producers, who raise fruits and vegetables, made money in 2025, and the 2026 outlooks are bleak.
While federal aid was welcomed, Dan Wright, president of the Arkansas Farm Bureau, said it falls short of what is needed. He said: “A program that provides roughly $50 an acre will not save the thousands of family farms that will go bankrupt before the end of the year.”
US agriculture secretary Brooke Rollins framed the package as short-term support, as the Trump administration works on creating trade and farm safety nets. Tariffs monies will fund bridge-loan program.
Farmers have been hit by Trump’s trade war with China in both of his presidential terms. According to Reuters, the first time Trump was in the White House, the administration paid out $23bn to help farmers affected by simmering tensions between Washington and Beijing. In 2025, farmers are expected to receive $40bn in economic and disaster aid.
Farmers are not the only ones under pressure. Tractor maker John Deere said it expects a pre-tax tariff hit of around $1.2bn in fiscal 2026, compared with nearly $600m in 2025.
Earlier this year the US and China found their way to a tentative trade truce, with China agreeing to buy at least 12 million metric tons of US soya beans. Whether it fully complies with the pledge remains to be seen.
Over the next several weeks, farmers will meet with their bankers for loans to buy seed, fertilizer and other inputs for spring planting. Many are likely to carry over debt from operating loans taken out last year. Agricultural credit conditions have fallen for crop farmers, according to the Kansas City Federal Reserve Bank, and weaker farm income has reduced farmer liquidity, and increased financing demand.
Jeff Rutledge has raised corn, soya beans and rice in north-east Arkansas for 30 years, with his father and grandfather. Farmers try to rotate between crops, but futures prices – agreed rates for assets to to be bought at a later date – will also influence his spring planting decisions. Currently, corn and rice prices are down compared to last year, and soya bean prices are up slightly.
Next year will be the second straight year that Rutledge will look to plant the crops that will lose him the least amount of money. “It’s just almost a repeat of last year, only with worse conditions,” he said. His farm hasn’t been profitable since 2021’s harvest.
Farmers may seek to plant more soya beans in 2026, even though export demand for that crop is lower, and it’s less profitable than corn, according to Arlan Suderman, chief commodities economist at StoneX. Soya beans are cheaper to plant, require fewer inputs, and generally take less care than corn.
For those carrying over debt from previous years, planting soya beans is “something that banks might pressure farmers to do in some areas of the country”, said Suderman.
Farm bankruptcies are likely to top 1,000 this year, with Arkansas hit harder than any other state: well above 2019’s peak of 599 filings, but below the peak during the 1980s farm crisis of almost 6,000 in 1987. While farmers are under financial stress, Suderman doesn’t expect a repeat of the 1980s farm crisis.
Chart of family farm bankrupties
Although China has been a big importer of US agriculture goods, for the past 20 years the country has sought to reduce its dependence on the US for soya beans by sourcing the legume from Brazil and other countries, Suderman said. “President Trump may have sped up the end of that cycle, but they were on that move anyway.”
Part of the new safety net promised by the administration may be an increase in biofuels under the Renewable Fuels Standard. The Environmental Protection Agency is expected to announce an increase in the total renewable fuel requirements for 2026 and 2027.
The key piece to the new rules will be biomass-based diesel production blending requirements. Farmers are expecting a significant increase in production under the new guidelines, which could help offset some of the export market losses.
The farm economy outlook is pessimistic going into 2026, but Suderman suggested that it could change dramatically if China turns back to US agricultural exports – and the EPA pushes for more domestic biofuel production.
If those two events happen, “then I think that we could start healing the ag economy and move [in] a positive direction toward recovery”, he said.
