Trump Unveils $12bn Aid Package for US Farmers Amid Ongoing Challenges
Trump unveiled a $12 billion aid package aimed at supporting US farmers, with approximately $11 billion directed to row-crop farmers through the USDA's Farmer Bridge Assistance Program. This support is described as short-term relief amid ongoing struggles within the agricultural sector.
Industry leaders have expressed concerns that the package may be insufficient. Arkansas Farm Bureau president Dan Wright noted that the roughly $50 per acre aid will not be enough to save thousands of family farms. The number of bankruptcies in 2025 is expected to exceed 1,000, a significant increase compared to the 599 recorded in 2019 and the nearly 6,000 during the 1980s, with Arkansas being the hardest hit state.
The difficulties faced by farmers are compounded by tariffs and trade tensions with China, which have particularly impacted soybean producers. Soybeans accounted for about 54% of US soybean exports last year. Although China pledged to purchase at least 12 million metric tons, there is uncertainty over compliance with this commitment. A tentative trade truce has been noted for 2025, yet China continues to source soybeans from Brazil, affecting US export volumes.
Financially, the broader farm sector is under strain. US crop farmers recorded a $34.6 billion loss before crop insurance and other support in 2025. Farm-credit conditions have deteriorated, with the Kansas City Fed highlighting weaker farmer liquidity and increased financing demand as producers prepare inputs for 2026. Bankers will review loan statuses to assess ongoing credit risks.
Deere & Company anticipates a pre-tax tariff impact of about $1.2 billion in its fiscal year 2026, doubling the $600 million impact experienced in 2025.
The administration has signaled potential new safety nets, including possible adjustments to the Renewable Fuel Standard. The Environmental Protection Agency (EPA) is expected to increase total renewable fuel requirements for 2026-2027, focusing particularly on biomass-based diesel blending requirements.
Outlook for 2026 remains challenging but may improve if China resumes purchasing US agricultural exports and if the EPA expands biofuel production. Futures prices will play a key role in spring planting decisions, with some farmers possibly shifting towards soybeans due to their lower input costs.
