WASHINGTON, D.C. (RFD NEWS) — President Donald Trump is preparing to deliver the first State of the Union address of his second term, which is set to kick off on Tuesday night at 9:00 p.m. Eastern.
“We’re probably not expecting any major announcements that really affect U.S. agriculture in a serious way,” said Rich Nelson. “Obviously, we hear some more spouting out discussions regarding the aid package, which is still to be dispersed, but for major movements, probably not a market story for us tomorrow night in that address.”
Like Nelson, many ag industry analysts believe Trump’s address will likely not produce any major new headlines for Farm Country. However, the ongoing uncertainty surrounding the Administration’s trade policy should be a main point of discussion following the Supreme Court’s tariff ruling against the White House last week.
Trade Policy Will Likely Take the Spotlight
The Agriculture Retailers Association (ARA) has been watching since that decision was handed down, but its stance has not shifted, according to the group’s President & CEO Daren Coppock.
“We have been opposed to tariffs on farm inputs since before I came to ARA 16 years ago; it’s something that raises the cost of what we deliver to the grower,” Coppock said. “Our members need unfettered access to as many sources of supply as they can to be able to serve their grower customers best.”
Coppock says more than just traditional ag inputs have taken a hit since the tariff plan was rolled out.
“There are a number of other tariffs in place under different authorities that are not affected by this,” he said. “And I know that the machinery sector in particular is still being impacted heavily by tariffs on steel and other materials that they need.”
Supreme Court justices said President Trump does not have the authority under the International Emergency Economic Powers Act (IEEPA) to impose the tariffs originally rolled out. Since the ruling, the White House has shifted strategies, now using Section 122 as a replacement. However, those new tariffs can only last for 150 days before requiring an extension from Congress. The 15-percent tariff is a flat surcharge on most goods entering the U.S.
The markets have been responding to the decision late last week. Analyst Ted Seifried says soybean growers stood to lose the most under Trump’s backup plan.
“When the 10% blanket announcement came out, what actually happened, I think, [is that] soybeans sort of breathed a little bit of a sigh of relief that it wasn’t worse, that it’s not 15% or 20% or, you know, some crazy number,” Seifried said. “But then, you know, after all of that, there are a lot of details that we still need to know. One, is this even legal and constitutional? Certainly, President Trump says it is. But, you know, he said it was the first time, and we found out Friday morning that that one wasn’t.”
President Trump this week warned other nations not to make any drastic trade moves. Senator Chuck Grassley (R-IA) says he believes all existing trade deals will remain.
“I will bet you that a lot of these countries, however far they went in their agreement with the President, are willing to stay there, as long as they’re certain of it,” Sen. Grassley said. “And, of course, they could back out, but I don’t necessarily think they will, because I think trade with the United States is very important to them.”
Grassley says it is now time for Congress to step up and reassert power over tariffs.
We’ve had many great discussions over the past year about the president’s tariff plan, but one word always comes up: Uncertainty. The current tariff mechanism is only good for 150 days from today. Brian Hoops at Midwest Market Solutions tells us that leaves a lot of room for the unknown.
“After 150 days to be renewed, he’d have to have congressional approval to do that,” Hoops said. “I think that uncertainty about the tariffs and what that means, and the retaliation that possibly could be coming from other countries, is what is making the grain markets nervous. We saw a pretty good rally all last week, especially in wheat, where the funds covered a lot of short positions. In fact, they’re still short, over 55,000 contracts of Chicago Wheat, 7,000 contracts of Kansas City, that they need to cover. That could give us some more price appreciation -- but that nervousness, that uncertainty, we’ve talked about before -- the markets do not like it.”
The 150-day timeline puts us at mid-July. It’s also worth noting that this would fall around the same time as the first U.S.-Mexico-Canada Agreement (USMC) review, set for July 1.
The ARA will be watching President Trump’s State of the Union address tonight, after last week’s Supreme Court ruling on tariffs.
Coppock warned that tariff changes create ripple effects across the economy, leaving its industry in a tough spot. “I think the industry is under a lot of pressure, and that happens anytime that the farmers are under pressure, because if they don’t do well, neither do our members,” Coppock said. “And so, the level of instability and unpredictability in the economy has been difficult for us. You just don’t know what’s going to happen to your cost structure on, especially on imported items, from one day to the next. And it’s not the kind of thing where you can turn on a dime and instantly change your supplier or instantly build a domestic plant to produce something because of a change in tariff rates. Those things take time, and we’re operating on planning horizons that are measured in decades, not years or days.”
Coppock added that rising input costs are also putting pressure on suppliers. One of their top concerns is “Farmgate Economics,” and they’re focusing on practical ways to help producers succeed.
The Debate Surrounding Glyphosate and Human Health
New details now on the push to “Make America Healthy Again” (MAHA). Health and Human Services (HHS) Secretary Robert Kennedy, this week, is defending pesticides, saying the recent executive order designating glyphosate as critical to national security was needed, despite his personal feelings about ag chemicals.
In a post to X, Kennedy minces no words, saying pesticides and herbicides are toxic by design, and say they put Americans at risk. But Kennedy says the U.S. agricultural system depends on those chemicals, such as glyphosate, warning that crop yields would fall if they were blacklisted.
Kennedy says he and Ag Secretary Brooke Rollins are accelerating the transition to regenerative agriculture, saying it will eventually help reduce a farmer’s reliance on these chemicals.
Farm Bill 2.0 Mark-Up Rescheduled
The “Farm Bill 2.0” markup has been delayed by a week due to the blizzard in the Northeast, but urgency across the ag sector remains high.
National Potato Council CEO Kam Quarles applauded the proposal, calling it critical to the long-term success of specialty crops, including potatoes.
“We’re very happy that Chairman Thompson has taken this first step, released the bill, and is going to mark that up in the House Agriculture Committee next week,” Quarles said. “Hopefully, this year, we’re going to be able to get a new Farm Bill to the president’s desk. I think that’s an imperative for specialty crops, but agriculture broadly. We have to get an update to our farm policy.”
Quarles says that, while appreciated, the $1 billion in U.S. Department of Agriculture specialty crop bridge assistance will fall short of the sector’s needs, but the draft text of the farm bill 2.0 could boost optimism among specialty growers.
“You know, he’s put out a very good product,” he said. “I certainly think the Specialty Crop Farm Bill Alliance is very supportive of this. The National Potato Council is very supportive. He’s got some great provisions in there that speak directly to the needs of the fruit and vegetable industry.”
According to House Ag Committee Chairman, Rep. Glenn “GT” Thompson (R-PA), the rescheduled Farm Bill markup is scheduled for a week from today, and Quarles says his organization is ready to help.
