Iowa soybean farmers are harvesting what the Iowa Farm Bureau says could be a record crop this year, with an expected 53 bushels per acre. But Verne Hosek, who lives outside Fairfax, isn’t optimistic about making money this year.
Hosek, who farms hay, soybeans, and corn in northwest Johnson County, said his operation has been squeezed from both sides of their balance sheet as rising costs on fertilizer, machinery, and higher interest rates have increased his expenses, while soybean and corn prices remain low.
“Either we’re making less money or losing money each year,” Hosek said.
Inflation, high interest rates, and record production mixed with status quo demand have spelled a “storm” over the agricultural economy since it began to retract in late 2023, Iowa State University agricultural economist Chad Hart said.
A strained agricultural economy mixed with tariffs that raise prices on fertilizer and machinery, coupled with a trade war that squashes demand in an export-driven sector and drives down already depressed prices, all make for a tough time for Iowa farmers.
“It’s just a recipe for some really rough times in the agricultural economy,” Hart said.
Iowa’s soybean farmers will be hit the hardest as China increases pressure on the U.S. to remove the reciprocal tariffs implemented by President Donald Trump as a way to balance trade relations. A boycott on buying American soybeans by the world’s largest soybean consumer spells doom for Iowa soybean farmers who export roughly 40-50 percent of their crop, half of which goes to China alone.
The Trump administration has put in motion plans to use internal U.S. Department of Agriculture funds, tariff revenue, and other sources to give farmers a cash infusion to help solve liquidity issues for farmers.
“I will say that farmers, by a very large majority, voted for the current president, and we’ve gotten a fair amount of promises, but not much action and even fewer details.”
– Mark Mueller, Iowa Corn Growers President
However, many farmers rebuke the idea and instead call for Trump to change his trade policy and not damage current trade relationships.
Iowa Corn Growers President Mark Mueller said he sees another 1980s farm crisis coming if the administration and Congress don’t act soon.
“We are producing way too much, and we don’t have enough markets for it,” Mueller said. “So why are we shooting ourselves in the foot with some of the few remaining markets we do have left, the export market in particular?”
U.S. Sen. Chuck Grassley, R-Iowa, in an Oct. 6 speech on the U.S. Senate floor, said he is seeing parallels between the 1980s farm crisis and Iowa farmers’ current plight.
“There is a not-so-perfect storm brewing for farmers in my state of Iowa and in agricultural states generally,” Grassley said.
Grassley said that Congress was too slow to act in the 1980s, which resulted in a stark increase in farm bankruptcies and farmer suicides.
“I’m here saying I don’t want to see it happen again,” Grassley said. “We can’t be complacent, knowing the history of Congress being too slow to act. So, Congress ought to act now before it’s too late.”
Iowa farmers face decreasing net farm incomes, higher production costs, and lower commodity prices like they did in the 1980s; however, land values have remained high, which hit a record $4,350 per acre in August 2025, according to the Farm Bureau — unlike the 1980s, Hart said.
“I don’t want to diminish the fact that some farmers will declare bankruptcy, and we are seeing an increase in that, but that said, even in a really great year, we have farm bankruptcies,” Hart said. “It is like any other industry in that not everybody’s cut out or lucky enough to be able to do it. The economy tends to wean out those who can’t financially survive.”
Farm bankruptcies have nearly doubled the number from the same period a year ago, with 82 cases nationwide filed over the first three months of 2025, according to Bloomberg Law.
Hart says the agriculture industry will lose many new farmers, which it desperately needs, from this economic downturn.
The Trump administration’s trade policy has been a “bitter pill” for farmers to swallow, Iowa Soybean Association President Tom Adam said in a statement on Oct. 2.
That bitter pill translates to billions of dollars. An ISU study found that Iowa’s soybean industry stands to lose $1.5 billion from Trump’s reciprocal trade policies, more than a quarter of the industry’s $5.8 billion value. The Iowa corn industry is expected to lose $548 million, Iowa’s pork industry is expected to lose $1.18 billion, and Iowa’s ethanol industry is expected to lose $168 million.
Total losses could amount to nearly $3.4 billion this year due to reciprocal trade and tariffs.
Though the economic downturn had been coming since before the current administration took office, adding “tariff turmoil” on top of that reality has pushed Iowa farmers to the brink, Hart said.
Rising machinery costs add to burden
Since the COVID-19 pandemic, inflation has been a concern for most U.S. consumers, Hart said. Those rising costs also put farmers in a pinch.
Farming crops requires a significant amount of capital and supplies to increase yields and make farming profitable. Since 2021, production costs have risen more than 30 percent, according to data from the U.S. Department of Agriculture’s National Agriculture Statistics Service.
Of those, fertilizer and chemicals have increased the most, with fertilizer costs rising by more than 43 percent since 2020, and chemical costs increasing by 21 percent since 2020.
Inflation is a significant reason for the increase, and tariffs have added pressure to an already substantial rise in prices. Roughly 10 percent of nitrogen and phosphorus fertilizers are imported, Hart said, and 90 percent of potassium fertilizer, or potash, is imported from Canada, which has a 10 percent tariff on imports.
“It’s put a big time hurt on us — I may or may not make money this year,” Muller, the Iowa Corn Growers Association president, said. “I know a lot of my contemporaries won’t make money this year. And fertilizer, seed, and chemicals, those are our three biggest expenses.”
Tariffs’ largest impacts are not on fertilizer costs; instead, they impact costs on parts and machinery. Iowa-based agricultural manufacturing companies such as John Deere and Kinze Manufacturing import parts from all around the world as part of their global supply chain, Hart said.
This has resulted in a nearly 50 percent increase in prices for machinery, repairs, and parts since 2020, according to data from the USDA’s National Agriculture Statistical Service, with inflation also playing a key role in increasing prices, Hart said.
“Well, the main thing is, machinery repairs have gotten so much more expensive because the parts are so much more expensive,” Hosek, a Johnson County soybean farmer, said. “We don’t even end up buying [equipment], and we don’t even buy because the interest rates have gone up too.”
Logan Lyon, former ICGA District 6 Director, said every time he has to buy a part for his farm machinery, he can see the immediate effects of tariffs.
“When I have to go buy parts or components that are manufactured in Taiwan or Japan, or China,” Lyon said. “That’s where it’s probably hurting me more quickly, and it feels a little bit more personal.”
Mueller said steel tariffs have hit machinery costs hard, which were implemented in the first administration, but were not lifted by former President Joe Biden when he took office.
“Just about every piece of farm machinery I have is made out of steel, and so we’re just paying higher prices on that,” Mueller said.
Mueller said many farmers voted for Trump and have yet to receive what they were promised: more free trade.
“I will say that farmers, by a very large majority, voted for the current president, and we’ve gotten a fair amount of promises, but not much action and even fewer details,” he said.
In addition to high input costs, commodity prices — specifically soybeans and corn, Iowa’s two largest crops — have remained low following a record high in 2022. This is largely due to an abundance of product from back-to-back good production years and a declining demand for those commodities, Hart said.
“We’re trying to get as many bushels as we can, because of low prices,” Hosek said. “But, it costs more to get more bushels.”
Currently, soybeans are selling at $10 per bushel, according to data from the USDA’s National Agricultural Statistical Service, and corn is selling at $3.96 per bushel.
According to estimates by ISU, it costs an estimated $11.15 to produce a bushel of soybeans, meaning soybean farmers are losing $1.15 per bushel this year. Corn farmers are also getting hit: corn costs an estimated $4.22 a bushel to produce, meaning those farmers are losing $0.26 per bushel. This comes with a good production year.
Soybeans and corn are Iowa’s two largest crop commodities, and with farmers losing money on producing crops, the Iowa agricultural economy is in trouble, Hart said.
However, a new problem has arisen for commodity prices, with tariffs artificially reducing demand for American crops due to global reciprocal tariffs brought by Trump to encourage an even playing field for trade.
Trade war locks American farmers out of key markets
As Iowa farmers continue to harvest, a trade war is playing out between China and the U.S. after Trump levied a 34 percent tariff on Chinese imports more than six months ago. In retaliation, China levied a 20 percent tariff on U.S. imports.
China has not imported a single bushel of U.S. soybeans since May 2025, according to the American Soybean Association, and all other agricultural exports to China are also down by more than half in 2025.
Iowa Soybean Association President Tom Adam, a farmer from Harper, Iowa, who farms soybeans, corn, oats, hay, and raises cattle, said in a statement that there is little to celebrate for Iowa farmers more than six months after Trump’s “Trade Liberation Day.”
He said the mood across rural Iowa and farm country “is one of anxiousness and frustration,” while they wait for a resolution to Trump’s trade war.
“Milestones are often worthy of celebration, but here in Harper, Iowa, where I’ve farmed for more than 40 years, there’s little cause for cheer,” Adam said in a statement. “No, what has farmers and the businesses that support us on edge is not the weather but trade policy that’s severely straining relationships with key markets for the crops we produce.”
China has also actively invested in Latin American soybean markets in an effort to circumvent buying from the U.S.
China’s campaign to circumvent U.S. soybean purchases includes buying more than 10 cargo ships of Argentinian soybeans, which occurred just hours after the U.S. announced it would give loans, currency purchases, and debt buying to stabilize the Argentinian economy. Which has left U.S. soybean farmers in a tough spot, with lots of soybeans and nowhere to sell them.
“The price of soybeans has dropped so far because reciprocal tariffs have been placed on our products after we placed tariffs on prices to some of our best customers,” said Aaron Heley Lehman, the president of the Iowa Farmers’ Union, which advocates for family farmers. “So farmers are feeling the economic impact in a terrible way.”
Heley Lehman said that Trump’s approach to tariffs is not what farmers need; what they need is free trade.
“We know that we need trade that is fairer for farmers and for workers,” he said. “But this approach — this chaotic approach — it’s not getting us there.”
Mueller, president of the Iowa Corn Growers Association, said agriculture is more dependent on exports than any other industry because the U.S. cannot consume it all.
“We don’t eat enough, we don’t drive enough — we need the export market,” Mueller said.
Mueller said the corn growers’ association wants free trade because, in a free market, Iowa farmers win. He said reciprocal tariffs have damaged trading relationships around the globe and put U.S. farmers who are dependent on exports in a bad spot.
“We farmers proclaim to want to let the markets work, and when the markets do work, we come out on top,” Mueller said. “We produce products more efficiently, more economically, at a higher quality, more sustainably than pretty much anywhere else in the world. But then you start throwing tariffs, reciprocal or otherwise, it just muddies the water, and makes us have to work that much harder to get our regular trading partners back to us.”
Trump’s Republican allies have said his trade war and reciprocal tariff strategy will open long-term trade stability and expand market access for American farmers.
“We need to deliver long overdue, long overdue certainty for rural America, and I know that President Trump will not abandon our Iowa farmers,” U.S. Rep. Ashley Hinson, R-Iowa, said in a Sept. 29 call with reporters. “ But restoring our dominance and the global order when it comes to fair trade does not just happen overnight.”
Adam said in a statement that many farmers share Trump’s priorities, but his trade strategy has been an affront to farmers’ needs: a free market.
“Agriculture thrives when America leads on trade,” Adam said in a statement. “We can’t afford to let uncertainty and political maneuvering erode the markets farmers have spent decades cultivating. The crop is here. The quality is proven. The demand exists. What’s missing is the resolve to reconnect America’s farmers with a world of buyers who want to purchase our soybeans. It’s time to get trading again.”
Farmers don’t want a bailout; they want free markets
The Trump administration has teased using funds to bail out farmers, after the administration gave $31 billion in aid to farmers earlier this year, according to the Des Moines Register. Of that, some $864 million came to Iowa.
The administration is weighing its options to support a bailout for farmers, with a proposal to use internal USDA accounts, tariff revenue, and even money from the Commodity Corporation Fund to dole out between $12 billion and $13 billion in aid to farmers, according to Politico.
This comes at the urging of the Iowa and National Soybean Association, U.S. Sen. Chuck Grassley, R-Iowa, and farm advocates everywhere; however, farmers say they don’t want the bailout, they want to sell their product in a free market.
However, those funds are a lifeline that will keep many farmers afloat until Trump can finalize a trade deal with China, Adam, Iowa Soybean Association president, said, which he hopes will include provisions requiring the purchase of U.S. soybeans.
“While not ideal, federal farm payments will enable many farmers to survive another year,” Adam said.
With that cash influx, to help solve farmers’ cash flow issues brought on by high production prices and low prices, it will keep rural America’s head above water, Hart said.
“We need our markets — we don’t just need a handout — we need markets,” Hosek said.
