Alcohol Trade Dispute Hits U.S. Farmers Through Exports

Trade disputes can quickly reduce demand for key crops.

stock image_california grapes vineyard vines grape wine AdobeStock_299814078.jpeg

NASHVILLE, TENN. (RFD NEWS) — A sharp drop in U.S. alcohol exports to Canada is creating ripple effects across American agriculture, cutting demand for key crops like corn, barley, wheat, and grapes. Economists say the dispute is hitting farmers as much as beverage companies.

Canada has long been a top market for U.S. beer, wine, and spirits. But trade tensions escalated in 2025, leading Canadian provinces to remove American alcohol from store shelves and halt new purchases. That shift effectively shut off a major export channel.

According to Dr. Andrew Muhammad with the University of Tennessee’s Institute of Agriculture, the impact was significant. U.S. alcohol exports to Canada fell 72 percent, dropping from $744 million in 2024 to just $208 million in 2025. Wine exports saw the steepest decline, followed by distilled spirits and beer.

For agriculture, the loss goes beyond finished products. Corn used for ethanol, barley for brewing, and grapes for wine all depend on export demand. Reduced sales mean weaker downstream demand for those commodities.

The situation also highlights a broader risk. Government-controlled retail systems can quickly block market access, making export demand more vulnerable to political decisions.

Farm-Level Takeaway: Trade disputes can quickly reduce demand for key crops.
Tony St. James, RFD NEWS Markets Specialist
Related Stories
Expanding bioethanol use strengthens rural economies, supports farm markets, and positions U.S. agriculture at the center of global low-carbon trade.
Lyndsey Smith with RealAg Radio discusses how global trade dynamics could shape the future of Canada’s pulse exports.
“Farmers for Free Trade” warns that disaster is brewing as President Trump’s trade policy is causing farm input costs to rise even more.
Corn and wheat inspections outpaced last year, but soybean movement remains seasonally active yet behind, keeping basis and freight dynamics in focus by corridor.
Lawmakers are pressing for answers on how Washington’s “managed trade” approach — keeping leverage through long-term tariffs — will affect farmers, global markets, and future export opportunities.
In the meantime, Senate Majority Leader John Thune is asking that farmers be allowed to use marketing assistance loans to help stay afloat.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

Water access—not acreage alone—is driving where irrigation expands or contracts.
Credit stress is building for row-crop farms despite steady land values and slight price improvements.
The Lexington shutdown pushes national slaughter capacity utilization nearer long-run averages, underscoring how tight cattle supplies are reshaping packer operations.
Texas livestock producers face a heightened biosecurity threat as New World screwworm detections in northern Mexico coincide with FDA approval of the first topical treatment.
Working capital is tightening for crop farms, increasing reliance on operating loans even as land values steady in the broader sector.
Higher ocean freight raises export costs just as global grain competition intensifies.