Whom Should Farmers Believe: The President or Their Lying Eyes?

Clark Packard and Alfredo Carrillo Obregon

The Trump administration continues to tell America’s farm community that this is a golden age and that the administration’s tariffs are working. The data tell a different story.

A new report from North Dakota State University’s (NDSU) Center for Agricultural Policy and Trade Studies quantifies what American farmers and ranchers already know from their own balance sheets: the Trump administration’s 2025 International Emergency Economic Powers Act (IEEPA) tariffs are inflicting serious damage.

The study finds that IEEPA tariffs extracted about $110 million from fertilizer imports between February and October 2025. More significantly, it calculates that tariff costs passed through to farmers at rates far exceeding the effective tariff rate. For widely used Diammonium Phosphate (DAP) fertilizer, for instance, the pass-through rate to wholesale spot market prices in the US Northern Plains region hit a staggering 342 percent in August 2025. 

In retail markets, the pass-through rate reached 156 percent—lower but still higher than 100 percent. (The study observed pass-through rates of a similar magnitude to prices for other types of fertilizers.)[1] Why was that the case? The authors of the report explain:

The pass-through rates exceeding 100% may reflect the market disruption created by tariff policy uncertainty. The April 2025 tariff announcement triggered anticipatory import activity, with importers accelerating purchases ahead of tariff implementation. Retailers engaged in precautionary inventory building. Exporters may have been concerned about sustained U.S. market access. These responses in the face of uncertainty may have combined to widen price premiums beyond levels consistent with the tariff’s direct economic impact.

The administration exempted fertilizers from the IEEPA tariffs in mid-November 2025, but the benefits have been slow to reach farmers. While wholesale prices fell quickly, retail DAP prices remain at $66 per metric ton above pre-tariff levels. In other words, farmers continue to pay a tariff premium months after the exemptions became effective.

This is the insidious nature of trade disruptions. Policymakers cannot simply turn off the tariff switch and restore normal market conditions. The uncertainty itself becomes a cost that gets embedded in supply chains, inventory decisions, and pricing strategies throughout the agricultural economy.

As our colleague Scott Lincicome documented last fall, America’s farmers are facing a crisis. Farm bankruptcies in the first half of 2025 exceeded the total for all of 2024. In October 2025, the gap between farmers’ production costs and the prices they received for their goods was the widest in a decade (Figure 1). There are multiple causes for these issues, but tariff policy deserves substantial blame. In an all-too-familiar pattern for farmers during Trump administrations, reckless tariffs on fertilizer, steel, aluminum, and other inputs increase production costs while foreign retaliation reduces exports and puts downward pressure on commodity prices. Erratic tariff policies squeeze farmers from both sides.

Consider Ohio soybeans. In 2016, Ohio farmers shipped $1.1 billion in soybeans to China. Just two years later, that figure collapsed to less than $160 million—an 86 percent decline. Despite occasional upticks, Ohio’s soybean sales to China have never fully recovered, as Beijing redirected purchases to Brazil and Argentina. Even as Beijing appears to be fulfilling its recent pledge to purchase more American soy, Ohio farmers will still fall far short of the $1.1 billion in export sales from just a decade ago.

The Trump administration’s response to farmers’ distress has been predictable: more bailouts. The $12 billion bailout payments announced late last year may keep some operations afloat—a recent survey suggests most farmers would use the money to pay down their debt—but it does nothing to address the root of the problem: the president’s infatuation with protectionism. Farmers would gladly forgo emergency payments for expanded and stable market access abroad.

As we await the Supreme Court’s pending decision on the fate of the IEEPA tariffs, the NDSU report is a stark reminder of the real-world damage caused by the Trump administration’s trade policy. Yet even if the Supreme Court strikes down the IEEPA tariffs (as it should), the president retains a number of other protectionist cudgels that would wreak further havoc on the American farm community.

The US agriculture industry needs genuine market access. Policymakers should pursue free trade agreements like the Trans-Pacific Partnership, which Trump unwisely abandoned in 2017. Otherwise, farmers will keep watching from the sidelines as buyers once keen to purchase American products continue turning to foreign alternatives instead.