Illinois ag director says Trump trade policies are ‘crushing’ farmers

SPRINGFIELD — The Trump administration announced this week that it would make $12 billion available in the form of one-time payments to U.S. farmers to help weather what it calls “temporary trade market disruptions” in the wake of ongoing tariff disputes with America’s trading partners.

But Jerry Costello II, director of the Illinois Department of Agriculture, said this week the latest aid package is less than half the size of the one offered in response to trade disputes during Trump’s first administration. He said the money being offered now is not nearly enough to make up for the losses farmers are suffering.

“Tariffs are crushing farmers again,” Costello said in a statement. “Financial losses are worse this time around, yet the aid package is 50% smaller. We’re seeing repeated devastation with greater losses than Trump 1. It defies logic.”

Payment details

The U.S. Department of Agriculture announced the “Farmer Bridge Assistance Program” Monday. It said the funds are authorized under the Commodity Credit Corporation Charter Act and will be administered through the federal Farm Service Agency, which also administers most other farm credit, subsidy and conservation programs.

Of the $12 billion being made available, USDA said, $11 billion will be earmarked for farmers who produce row crops. Those include corn and soybeans, the two biggest crops in Illinois, as well as barley, cotton, oats, peanuts, sorghum, wheat and several other crops.

The remaining $1 billion is being reserved for other crops, including sugar and specialty crops, although details of those payments are still being developed.

The payments will be based on the number of acres of eligible crops each farmer planted, as reported to FSA, as well as statistical models that use production cost estimates, average yields and market prices to estimate each farmer’s losses.

USDA said eligible farmers should make sure their 2025 acreage is reported to FSA by 5 p.m. eastern time Friday, Dec. 19. Eligible farmers can expect payments to be released by Feb. 28.

Sufficiency of payments

In its statement Monday, USDA said the program would use “a uniform formula to cover a portion of the modeled losses” farmers incurred during the 2025 crop year, but it did not say how large of a portion those payments would cover.

Costello, however, said the limited size of the program ensures it will not be enough to cover all the losses farmers have suffered as a result of the trade disputes.

“It’s a much, much smaller relief package than last time, and this is a much larger problem than what we experienced during the first Trump administration and the first Trump tariffs,” he said in an interview with Capitol News Illinois.

In 2017, Costello noted, the Trump administration imposed significant tariffs on various goods coming into the United States from China. That prompted China to impose retaliatory tariffs on a number of U.S. exports, including soybeans.

Illinois is the nation’s leading producer of soybeans, he said, and China was the biggest export market for that crop.

“In 2017, tariffs are put in place. In 2018 and 2019, there’s an estimated loss of over $27 billion in the agricultural space,” Costello said. “What’s interesting about that is about 72% of that literally was specific to soybeans, and about 95% of that was specific to China. So at that point in time — again, first Trump administration — the aid package was $23.1 (billion).”

Costello also noted that nearly a third of the agricultural losses at that time were concentrated in just three states — Iowa, Illinois and Kansas.

This time around, Costello said, the global trade disputes extend beyond just China, and in the agricultural sector they involve many more crops than corn and soybeans. But the aid package is only half the size as the one in the first Trump administration.

Long-term costs

Costello said the trade wars have affected the farm economy on at least two fronts — lower prices due to shrinking export markets, and higher production costs because of tariffs imposed on imported goods such as fertilizers, tractors and other kinds of farm equipment.

During the first Trump administration, he said, Illinois’ sales of soybeans to China fell from $1.3 billion in 2017 to $116 million in 2018 — roughly a 90% drop. By 2020, they had fallen further, to just $29 million.

“So, I mean, those are major, major losses,” he said.

One result, he said, is that farmers have ended up storing their products in silos, either because the market prices are too low or there simply aren’t enough buyers.

“So when you’ve got all of your storage that’s being consumed, or most of your storage being consumed, a lot of farmers are forced to sell into a market that’s depressed if they have nowhere to go with it,” he said. “So they’re forced to take those losses.”

Meanwhile, he said, tariffs being imposed on products coming into the United States from overseas are driving up the cost for farmers to put a crop in the ground.

“Just this past year, because of tariffs, nitrogen tariffs are up 10%,” he said. “Herbicide, pesticide, insecticide are up 20%. Ag equipment, up 13%; tractors, up 16%. So there are huge implications because of the tariffs on a lot of the inputs.”

While those factors are affecting farmers’ bottom lines today, Costello said his biggest concern is that they could become long-term drags on the farm economy, making it difficult or impossible for individuals and families to earn their livelihoods by farming.

“Right now, we have more people farming that are over 75 than under 35,” he said. “It’s scary, because 58.6 is the average age of a farmer in the state of Illinois right now. So getting new people into agriculture, retaining the folks that have had the guts to try to come into a tough … those new folks are the most vulnerable, and those are the ones that it worries me will not be able to sustain this type of a downturn.”