Government Shutdown Adds Pressure to Struggling Farm Economy

The government is still shut down amid a congressional stalemate. On this week’s episode of Agri-Pulse Newsmakers, Sen. Tina Smith, D-Minn., discussed which farmer-facing programs she’s worried could be affected. She also expressed concern the U.S. is losing export markets because of trade disruptions.

Then, American Soybean Association CEO Steve Censky took a look back at what the first Trump administration learned from delivering two rounds of Market Facilitation Program payments, and how that experience could guide the upcoming economic aid payments ag groups are requesting. Farmers for Free Trade executive director Brian Kuehl also joined the show to discuss the group’s cross-country motorcade for trade.

Watch the Episode

Want to receive Newsmakers in your inbox every week? Sign up!

Read the Transcript

Please note: This transcript has not been edited.

Lydia Johnson: Welcome to Agri-Pulse Newsmakers, where we aim to take you to the heart of ag policy. I’m your host, Lydia Johnson. Our guest this week is Minnesota Senator Tina Smith, who joins us to discuss the government shut down biofuels and trade.

But first, here are this week’s headlines.

• The Trump administration has been focused on getting out a package of emergency trade assistance payments to farmers. As our team scooped this week, the administration quietly moved $13 billion to a fund in the ag secretary’s office, known as the Commodity Credit Corporation, which was used to deliver tariff assistance to farmers during Trump’s first term. More than 200 ag organizations appealed to the president this week for economic assistance, without directly calling out the administration’s trade policy. The group wrote that while the budget reconciliation bill, signed into law in July, included significant changes to commodity programs, farmers will continue to face enormously challenging market conditions until those prices go into effect in October 2026. Top Senate Ag Appropriator Senator John Hoeven said a path forward to get tariff support to farmers would involve multiple steps, including Congress working on legislation and unilateral measures from the administration.

• Farmer sentiment improved in September despite fears of worsening economic conditions. The most recent Purdue AG economy barometer shows a one-point increase in farmer sentiment as producers remain hopeful for policy support. According to the report, 71% of farmers believe that the US is headed in the right direction and 83% expect to see market facilitation program style compensation due to export losses. However, weak commodity prices and rising pessimism from farmers has caused a seven-point drop in sentiment about current conditions. Producer expectations for farm financial performance and support for tariffs are down for the third month in a row.

• Nearly half of USDA employees are furloughed, and many of the department’s activities have been halted while the government shutdown. Congressional leaders remain in a stalemate over funding the government for fiscal year 2026, which began over a week ago. President Trump is now threatening not to provide backpay for furloughed workers. The Agriculture Department shutdown plan has halted data collection for many USDA published reports, including the Crop Progress and monthly World Agricultural Supply and Demand estimates report that were set to be released this week. Disaster assistance, processing and payments have also been paused. Farmer facing services are being hit particularly hard. About two thirds of Farm Service Agency employees and 95% of Natural Resources Conservation Service employees are furloughed.

Tina Smith is a senator from Minnesota. We asked her what services she’s concerned about the government shutdown affecting.

Tina Smith: I’m quite concerned about what kinds of services farmers are able to get, especially this fall when there’s so many other pressures on them. And honestly, I’m quite concerned about what’s going on with health care with farmers. About 25–27% of farm families are getting their health insurance from the exchanges. And those are the insurance rate increases that look to be doubling or in some cases, tripling. In southern Minnesota, for example, folks are going to be paying nearly $3,000 a year more. So there’s a lot of pressures on farm families right now. In addition to, the, you know, what’s going on with the with a very bad farm economy.

Lydia Smith: Senator, are you and your colleagues demanding that Republicans agree to extending expiring, health insurance subsidies as part of a deal to reopen the government? How does keeping the government closed? And as long as we’re looking ahead, you know, because of this issue, help rural Minnesotans?

Tina Smith: Yeah. Well, so, you know, what I’m what I’m fighting for is to lower health care costs for people in Minnesota and around the country, and the government is shut down because, the party that is in power in Washington is refusing to even negotiate with us about that really important issue. All we’re asking is that they talk to us, that they negotiate with us. And, I don’t usually vote for things that I think are bad for my constituents, especially if folks that are asking for my vote don’t even talk to me. So, what I really hope happens, and it’s urgent that it gets done is that we, you know, understand the U.S. House of Representatives hasn’t even been in Washington for nearly 20 days, are not going to be in next week. I wish that everyone would just come back here. Let’s get this negotiated. This is a bipartisan issue, of lowering people’s, health care insurance premiums. It doesn’t have to increase. And it’s kind of a now problem because people are going to be shopping for health insurance, starting right now.

Lydia Johnson: We asked Minnesota Senator Tina Smith what feedback she’s received from her constituents about the farm economy and if she thinks relief payments are necessary this year.

Tina Smith: Well, and I mean, as you well know, it has been a really rough year for, farmers around the country. I’m hearing a lot about what is happening with the impact of tariffs on markets, particularly for soybeans. I think, a lot of people are feeling like it just, feels sort of like adding insult to injury that we sent this, you know, $20 billion to Argentina while simultaneously China, is shipping is shifting all of its purchasing to South America. So, we really need to get, we need to get a handle on that. And of course, I will always support the things that we need to do to help keep Minnesota farmers and national farmers, surviving during this tough economic time. But the fundamentals of losing all of that market demand while, soybean crop yields have been so strong this year is a real problem for farmers.

Lydia Johnson: And, you know, you mentioned that fundamental problem of China is simply not buying these commodities. When we look at the bigger picture of this, you know, farmers are worried that they’re potentially permanently losing this market. You know, how sure are you that farmers are going to get that market back with China?

Tina Smith: Well, I mean, as we know, when you lose market share to a giant purchaser like China, they shift to other sources and they don’t just shift back. And I am quite concerned, as Minnesota producers are, that, if the United States, supply, which is seen as the best quality supply in the world if but if the supply seems to be, you know, un, you know, unpredictable because of this on again, off again tariff situation, then, our foreign markets will just shift to other suppliers. And so I’m quite concerned about that. We know from past history that, you know, when we had the Trump tariff wars, trade wars and the first administration that we never regained all of those markets that we lost. And of course, we’d all remember well what happened when we had the, the wheat embargo, you know, back in the 80s and the wheat market never recovered from that, trade disruption, so it is a serious moment for us.

Lydia Johnson: And when we talk about the loss of international customers, do you think that this is an opportunity to drive domestic demand for a lot of these commodities? You think it’s an opportunity to finally secure year-round e-15 and, and other, biofuel policy?

Tina Smith: Well, I would say two things. The first, it is essential that we continue to develop the market for year-round E15, and we also, continue to develop, value added market opportunities for advanced biofuels, which will be extremely important to the soybean market as well. I’ve never talked to anybody who believes that that will replace the loss of foreign markets for American commodities. That is always going to be an important is as our ability to produce more, more efficiently and economically continues to improve. The only way that that market is sustainable is if we have strong, international markets. I mean, it’s billions of dollars a year. But you’re absolutely right. In this moment, it is especially important that we make the progress we need to make on year-round E15 and other supports for advanced biofuels.

Lydia Johnson: One question as we wrap up here farm groups have been pushing for market relief for for the markets lost from China and other purchasers of these commodities. Are you concerned about those payments once they get that figured out? You know, is the government shut down, delaying getting those payments, getting those payments started, do you think?

Tina Smith: You know, I don’t it’s not my perception that the government shutdown is delaying that. I understand that the Trump administration is saying that they won’t move forward until they until the shutdown is over. But I’m not aware of any legal reason why we why we couldn’t begin to talk about that and begin to negotiate what that would look like. As you well know, the you know, I believe that that would require congressional approval, and Congress is at least the Senate is here and working. So, and as you also no doubt know, you know, when the, major cuts to the food nutrition programs were made earlier this year in the so-called big beautiful bill, that kind of that pretty much frayed the big coalition that allows the farm bill, you know, programs to go forward. And so we’ve got to figure out how to repair that, because there’s a lot of people in the United States Senate that don’t represent farm country, but they care a lot about nutrition programs. And holding those two things together is extremely important as we look for a path forward.

Lydia Johnson: We’ll be back with more Agri-Pulse newsmakers. But first, Andrew Huneke looks at direct government payments to farmers in this week’s Ag By the Numbers.

Andrew Huneke: Direct government payments to farmers are expected to rise to more than $40 billion this year, mainly due to assistance provided by Congress through the American Relief Act of 2025. This chart shows yearly direct government payments to farmers from 2016 to the projected total from this year. More than 35 billion of the projected $40.5 billion total is for supplemental and ad hoc disaster assistance. This year’s projected total is the second highest since 2020, which topped out at $45.6 billion. Both high years happened under President Trump. The surge leading up to and including 2020 was due to market facilitation program payments as compensation for the trade war, as well as pandemic assistance. The 2025 estimate does not include any of the trade related income loss payments now under consideration, which means the number could climb even higher in 2026. For Agri-Pulse I’m Andrew Huneke.

Lydia Johnson: Welcome back. Producers receive market support payments during the first Trump administration, and ag groups now want a round of payments before the end of the year. We’re joined by Steve Censky with the American Soybean Association and Brian Kuehl with farmers for Free Trade. Steve, you were deputy ag secretary while these payments were rolling out last time. How does this round of assistance compare to what you saw then?

Steve Censky: Well, I think I think it compares. There’s a there’s a great comparison because again, when we made the map payments, both the MFP one and MFP two, that was a result of the China trade war, where markets had been upended. And we’re seeing the same thing today, where, you know, China, as you know, right now, does not have any soybean purchases on the books for this marketing year. They’ve absolutely shunned purchasing from the United States. And that’s affected, of course, soybeans, but it’s affected other commodities as well. And so that was the impetus for the administration, under the first Trump administration, which I was part of to try to put together, you know, something to try to assist farmers, to try to provide a bridge. But I think the reality is still the same while it’s a bridge. And it helps, I guess, stop the some of the financial bleeding. It never replaces markets. And there’s long term effects that have that occur from losing markets and losing your customers.

Lydia Johnson: And I’m curious from rolling out the MFP payments last time, you know, what did you learn from that process and what should be considered as this new round of trade assistance is a lot of moving pieces right now, but being developed.

Steve Censky: Yeah, I mean, I think, you know, there was a difference between the MFP one and MFP two. I think, you know, we learned as we went along on making those payments. And I think the MFP two was, the better way to do it, to take a look, at, you know, farmers and the cropping mix within various counties to try to calculate, you know, what has been the damage due to, trade wars and lost markets. And try to come up with a payment that’s more reflective, of, you know, the mix of commodities within a county.

Lydia Johnson: And, Brian, I want to bring you in on the conversation here. Farmers for Free Trade has been leading a motorcade for trade event across the country this fall. And I’m curious, lots of talk of trade and tariffs right now, but what originally inspired this event, and what kind of feedback are you hearing on the road?

Brian Kuehl: We had a motorcade for trade event back in 2018, when President Trump had passed or had proposed the US Mexico-Canada agreement, and that was a 30-state tour, trying to build support for USMCA. And we did that successfully: USMCA passed by broad bipartisan margins. Looking at the depth of the emerging farm crisis, because of the ongoing trade war, we felt it was important to try this same approach again, so we launched another motorcade for trade. We have a 25ft RV that’s wrapped in information about trade. It’s traveling around the Midwest. We started in Nebraska. We’re currently in Michigan, headed for Wisconsin. And it’s really a harvest listening tour. A lot of what we’re trying to do is hear from farmers. Understand the challenges they’re facing, and then communicate that back to Congress.

Lydia Johnson: And I’m curious, Brian, do you think lawmakers are being loud enough about how farm country is being hit by tariffs?

Brian Kuehl: I would agree with that. I mean, I think that every member obviously needs to follow their own politics and their own conscience. And I’m sure a lot of a lot of members are working quietly behind the scenes, convening their concerns to this administration. You know, when we meet with members of Congress, it’s clear they’re hearing from their constituents. They’re hearing from soybean farmers, corn pork, you know, across the board, pretty much every commodity is, is selling below the cost of production. So, everybody’s getting hit with the exception, maybe of beef. So, I think I think members of Congress are hearing that. And, I really hope they are conveying that to the administration and, and, and pushing for, for real market access, which is ultimately what’s needed. A payment program, like Steve said, is a nice bridge, but it’s got to be a bridge to somewhere.

Lydia Johnson: Ag Secretary Brooke Rollins said USDA will protect American farmers from high and volatile input costs, and farmers are saying that suppliers are gouging and overcharging them. We asked American Soybean Association CEO Steve Censky what needs to be done to correct heightened input costs that are squeezing producers.

Steve Censky: Yeah, I mean, I would say that, we welcome, you know, Secretary Rollins and the US government, taking a look at that, trying to see what can be done to try to address the input cost. I mean, we have seen, of course, inflation. I mean, phosphate prices are more than double what they were in 2020. Potash prices are 41% higher. You have, machinery costs that are way up. You have, seed cost and other input costs that are way up. Part of that, I mean, and this gets back to trade. Part of it is due to the tariffs as well. I think North Dakota State University estimated that, you know, input cost, the cost of tariffs, has raised, input costs on average for farmers, about 12%, over what they would otherwise be. With some big differences in between that various inputs as well. And so, you know, we welcome whatever can be done to try to address the cost of inputs. But we recognize that that’s probably longer term as well. And there’s no, you know, quick fix there. We think it needs to be addressed. But I think that the quick fix is, we need trade deals. We need to, you know, as we’ve been saying to the American Soybean Association, we want President Trump and, to reach a deal with President XI from China, to restore that market. And we want to reach deals in other markets. And we also need to, of course, do things to expand demand domestically, like biofuels as well. And, you know, the administration put forth a very, very positive and robust. RVO proposal, that would significantly increase demand. We and, and also discourage, you know, imported feedstocks from being used or give preference at least to domestic feedstocks. And we think that’s great. And we think it needs to be finalized.

Lydia Johnson: And, Steve, soybean farmers are obviously struggling. Well, the boost to reference prices and crop insurance included in the one big Beautiful bill be enough to support producers in the future. Or do you think this is something that Congress is going to need to provide more assistance or take other action to correct markets long term?

Steve Censky: You know, the farm safety net is just that. It’s a farm safety net. And those payments, you know, are going to be available. And that support available to producers until October of next year. And so that’s a long time. And farmers need some help now. So I do think that there is a bridge that’s needed to try to help producers weather this and, and so that they can try to stay in business and plant a crop and that’s why, you know, farmer assistance we believe, is needed now, until, you know, some of those provisions kick in. But every farmer I talked to wants to have markets and doesn’t want to get a paycheck from the government. So that’s why, you know, going back to why we need trade agreements, why we need to make sure that we’re not jeopardizing our, our markets, that we’ve worked hard to try to develop over many years. We need domestic markets as well as international markets. And then, you know, we do think longer term that looking at the rising cost of inputs and what can be done there to, address that is also good. But that’s again a long-term play.

Lydia Johnson: And Brian, I want to get your thoughts as well. Lots of discussion on a bailout for producers impacted by the president’s trade policies. But obviously it would be better to have a market that’s self-sufficient to begin with, doesn’t need these bursts of economic support. So curious on your thoughts, long term, what needs to be done to correct markets?

Brian Kuehl: Long term, clearly, we need to open new markets and we need to hold on to the markets we have. You know, one of the challenges is that China is China is everything in terms of soybeans. I mean, last year, $12.5 billion worth of exports, we’ve had $14 billion in previous years. That’s not something that gets replaced with a trade deal with Vietnam or Indonesia. Those are helpful. And those can incrementally help improve, export markets. But at the end of the day, you know, China’s 1.3, 1.4 billion people, India is the same. Like, if we’re not tapping into those Colossus countries where you have all those mouths and all those people who want protein and thus need animal feed. We’re we’re going to be playing catch up. And, and I think one of our big concerns is that you look at the 2018 trade war. It was the moment that Brazil really kind of turbocharged. They were able to put a lot more, acreage into production. China has been investing in their infrastructure. Now we have Argentina removing their export tax on soybeans and beginning to export to China. Even as the US is, is bailing out Argentina. It’s a recipe for long term, harm to the US farmer.

Lydia Johnson: We’ll be back with more newsmakers. But first, Andrew Huneke has more on farm real estate value by state in this week’s Map It Out.

Andrew Huneke: Farmland values are up by more than 4% across the country this year, according to USDA. This map shows the dollar per acre cost of farmland in each state. This year. The average value of farmland exceeds $8,400 per acre in 11 states, including California, Florida, Illinois and Ohio. The average value of farmland across the country was just over $4,300 per acre. Farmland values rose in every state as well. Michigan had the highest at 7.8%, followed by Tennessee, South Dakota, and Ohio. Another important aspect to consider when analyzing the numbers is cropland and pasture land. According to the USDA, cropland values are still higher than pasture land values due to higher per acre returns. This is especially noteworthy in the Pacific Northwest this year, where average cropland value per acre is slightly more than four times higher than the average pasture land value per acre. For Agri-Pulse, I’m Andrew Huneke.

Lydia Johnson: Thanks for joining us for another episode of Agri Pulse Newsmakers. As world leaders prepare for Cop 30 in Brazil this November, American Agricultural is a critical opportunity to shape the global conversation on sustainable food systems. Join Agri-pulse on October 21st at the National Press Club for conversations on how U.S. agricultural innovation is delivering solutions. The world needs. To the newsmakers next week and check our website any time for the latest developments on all things food, farm and fuel policy. For Agri-Pulse I’m Lydia Johnson. Thanks for watching.

Agri-Pulse is a trusted source in Washington, D.C., with the largest editorial team focused on food and farm policy coverage.