LUBBOCK, Texas (RFD-TV) — Farm tariffs are reshaping U.S. agricultural trade, raising both challenges and opportunities for farmers. According to AgAmerica Lending, the U.S. farm trade deficit reached $28.6 billion in the first half of 2025. However, the USDA projects a narrower deficit of $47 billion for the year, with further improvement expected in 2026.
Tariffs are driving up input costs, with fertilizer prices increasing by $100 per ton and machinery costs rising due to steel and parts duties. Not all commodities are affected equally: flexible row crops, such as corn and soybeans, can adjust more easily than permanent operations, like orchards or dairies.
China remains the most significant concern after cutting ag exports from the United States by half and turning to South America for soybeans, while Brazil faces steep U.S. tariffs that could shift its products toward China. Canada and Mexico face less severe changes under the USMCA, but still face uncertainty, while new U.S. agreements with Japan, Indonesia, and Australia are opening up fresh markets for rice, soybeans, dairy, and beef.
Farmers Face the Rising Costs of Fertilizer
Fertilizer prices have been mixed lately, but analysts with DTN found only one moved beyond five percent. Phosphorus fertilizer prices gained exactly five percent in recent weeks, holding around $860 per ton. However, all eight major types are now more expensive than they were a year ago.
Uan-32 is up 32 percent, urea gained almost 30 percent, and DAP is up 16 percent. Potash has been the last fertilizer type to decline year-over-year; however, that trend is now changing. DTN said it’s now gained one percent over 2024 levels.
And while fertilizer prices have risen recently, they remain below the historic highs we saw in 2022. Economists at the American Farm Bureau Federation (AFBF) have been monitoring the situation since then and say there are two main drivers at present.
“The big drivers are energy costs, mainly because nitrogen fertilizers rely on natural gas, and so other countries have had decreased production due to conflict, as well as geopolitical disputes overall,” explained Faith Parum with AFBF. “There will just, again, be that uncertainty, as you know, the world continues to move around through these geopolitical disruptions.”
The AFBF said input costs remain challenging for farmers, and it is essential to prepare for any potential surprises.
