California Ag Network

Category: Ag Economics

  • USDA Advances Trump Administration’s Farmer-First Agenda at UN FAO Conference

    U.S. Department of Agriculture Deputy Under Secretary for Trade and Foreign Agricultural Affairs Michelle Bekkering led the delegation — on behalf of Secretary of Agriculture Brooke L. Rollins — to the 44th Session of the United Nations Food and Agriculture Organization (FAO) Conference in Rome, delivering a clear message: international organizations supported by American taxpayers must deliver results that align with U.S. interests and directly benefit American farmers, ranchers, and producers.

    During the Conference, the U.S. national statement was firmly delivered, echoing President Trump’s vision and Secretary Rollins’ commitment to prioritizing American farmers and ranchers.

    “Today, the U.S. sees FAO at a crossroads,” said Deputy Under Secretary Bekkering during the U.S. national statement to the FAO plenary. “One path is business as usual—more mandates, more meetings, more process, slow progress. The other path brings us back to basics and results—focusing on FAO’s core mission and making a real and sustainable difference on the ground. When farmers and ranchers can produce more, move their goods more efficiently, and compete fairly, everyone benefits—from farm to table to globe.”

    In meetings with FAO leadership and international counterparts, Bekkering emphasized U.S. reform priorities and the need for results-based, science-driven leadership.

    Alongside Chargé d’Affaires Scott Turner of the U.S. Mission to the UN Agencies in Rome, Bekkering discussed with FAO Deputy Director General Beth Bechdol how to better align FAO’s efforts with the priorities of its largest contributor. In a focused meeting with FAO Chief Economist Máximo Torero, she stressed that FAO credibility depends on its use of the best available science, data and evidence.

    The United States also met with Codex Secretary Sarah Cahill and underscored the importance of Codex Alimentarius to supporting American agriculture and fostering trade and encouraged more consistent communication on how international food safety standards benefit U.S. producers. The delegation also engaged the International Fund for Agricultural Development, meeting with Ronald Hartman, Director of Global Engagement, to push for increased collaboration with the American private sector in its global investments.

    In bilateral talks with Canadian Assistant Deputy Minister Tom Rosser, Bekkering discussed joint efforts to defend transparent, evidence-based agricultural policy across multilateral settings. She welcomed Canada’s alignment on key issues related to trade facilitation and regulatory coherence, reinforcing the importance of North American leadership on the world stage. Deputy Under Secretary Bekkering also met with Sweden’s Vice Minister for Rural Affairs Daniel Liljeberg to strengthen relations while sharing concerns about EU trade-barriers including the EU Deforestation Regulation, and underscored that American farmers produce the safest, highest-quality food in the world and deserve full access to global markets.

    Looking ahead, USDA will continue engaging with the FAO and U.S. interagency partners to advance reform priorities. This includes supporting the State Department’s review of U.S. engagement with international organizations to ensure alignment with American strategic and economic interests.

  • Revised Forecast Reveals Larger California Almond Crop

    The 2025 California Almond Objective Measurement Report published Thursday by the U.S. Department of Agriculture’s National Agricultural Statistics Service (USDA-NASS) estimates that the crop harvested in 2025 will come in at 3.0 billion meat pounds.

    The Objective Estimate is up 7 percent from USDA-NASS’s Subjective Forecast in May and 10 percent higher than last year’s crop of 2.73 billion meat pounds.

    “The Objective Measurement reflects the hard work by California almond growers during uncertain times,” said Clarice Turner, president and CEO of the Almond Board of California. “While shipping has remained consistently strong, we know uncertainty remains surrounding future trade policies. We continue to engage with trade partners and stakeholders to encourage constructive solutions that support fair and stable trade so California almonds can continue to be enjoyed by consumers around the world.”

    The 2024 harvest yielded 2.73 billion pounds, 2.5% below the 2024 Objective Report estimate, reflecting the difficulty of precisely forecasting crop size given the current fluctuations in weather and economic factors.

    The report shared the 2025 almond crop experienced variable weather during bloom, which began in early February and peaked in the middle of the month. Storms brought rain, wind and hail, which hindered bee hours and blossom growth. Conditions improved in early March with warm temperatures accelerating the crop’s progress through the end of bloom. Mild temperatures and timely rain in spring supported nut growth and continued through early summer, lessening heat stress in orchards. Lower than normal pest and disease pressure have been reported. Harvest is expected to begin on time.

    USDA-NASS’ forecasted yield is 2,160 pounds per acre, up from 1,980 in 2024. The forecast for the average nut set per tree is 4,364, an increase of 7 percent compared to 2024. The Nonpareil average nut set of 4,526 is 9 percent higher than last year. The average kernel weight for all varieties sampled was 1.60 grams, down 0.6 percent from the 2024 average weight. The Nonpareil average kernel weight was 1.60 grams, down 2 percent from the 2024 average weight.

    The 2025 Objective Report is based on actual almond counts using a statistically rigorous methodology. The survey was conducted from May 24 to June 28 and 1,892 trees were sampled in 946 orchards. USDA-NASS conducts the annual Objective Report, Subjective Forecast and Nursery Survey to provide the California almond industry with the data needed to make informed business decisions.

  • Expanded Market Access to Namibia is a Win for American Poultry Producers

    U.S. Secretary of Ag Brooke Rollins announced American poultry producers will have greater market access to Namibia, which will now accept fresh, frozen, and chilled poultry exports from the United States. The Trump Administration continues to take bold action to break down non-tariff barriers and defend current market access for farmers and ranchers.

    “President Trump is renegotiating the status quo of bad trade deals that have left behind American farmers and ranchers for far too long. Our agriculture is the best in the world, and under President Trump’s leadership, we are providing more markets for farmers to share their bountiful harvest. The announcement today is a win for farmers, a win for exporters, and a win for freedom-loving nations who want access to safe, high-quality U.S. food,” said Secretary Rollins.

    Effective July 1, U.S. exporters are now eligible to ship fresh, frozen, or chilled poultry and poultry products to Namibia, unlocking a market valued at $15 million. In addition, USDA successfully negotiated the removal of burdensome export and transit permit requirements for processed poultry products—reopening a previously restricted channel.

    Namibia’s decision to recognize U.S. food safety standards and the work performed by the USDA’s Food Safety and Inspection Service, affirms the global reputation of USDA’s inspection system, which ensures that American poultry products are not only competitively priced, but rigorously verified for safety and wholesomeness.

    This trade win follows four years of inaction by the Biden Administration, which caused the agricultural trade balance to go from a trade surplus under President Trump to a nearly $50 billion trade deficit under President Biden. Secretary Rollins has traveled to the U.K. and Italy, and will travel to Japan, Vietnam, India, Peru, and Brazil over the next three months to fight for American farmers and ranchers. Other USDA Trade Missions this year include the Dominican Republic, Taiwan, Côte d’Ivoire, and Mexico.

  • California Citrus, Table Grapes & Dairy Well-Represented in Upcoming Trade Mission to Dominican Republic

    The U.S. Department of Agriculture will lead a high-impact trade mission to Santo Domingo, Dominican Republic, from July 13–17 to expand market access and boost U.S. agricultural exports. The delegation includes 47 agribusinesses, trade organizations, and officials from Colorado, Montana, and Wisconsin departments of agriculture.

    “USDA is committed to growing export opportunities for American farmers, ranchers and agribusinesses,” said Deputy Under Secretary for Trade and Foreign Agricultural Affairs Michelle Bekkering, who will lead the mission. “This trade mission will connect U.S. exporters with key buyers, tapping into Latin America’s growing demand for high-quality American agricultural products, supporting rural prosperity and keeping American agricultural products globally competitive.”

    With an expanding middle class, economic growth and a burgeoning hotel and restaurant industry, the Dominican Republic offers U.S. producers a stable and sustainable market in the Caribbean Basin. The country is the fourth-largest market for U.S. agricultural exports in the Western Hemisphere and the top market within the Central America Free Trade Agreement-Dominican Republic (CAFTA-DR) region, which includes Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.

    Thanks to CAFTA-DR, U.S. exports to the Dominican Republic have increased from $800 million in 2007 to $2.2 billion in 2024, with the U.S. currently supplying 44 percent of the country’s agricultural imports, supporting around 15,000 American jobs. Between 2023 and 2024 alone, exports increased 6 percent.

    Participants will meet with buyers from the Dominican Republic, Haiti, and Jamaica to gain market insights and forge new partnerships. USDA’s Foreign Agricultural Service staff and regional experts will provide in-depth market briefings, site visits and networking events to maximize trade opportunities.

    Other participants include:

    1 Alaska Seafood Marketing Institute – Juneau, Alaska

    2 Boston Agrex LLC – Norwell, Mass.

    3 California Dairies – Visalia, Calif.

    4 California Table Grape Commission – Fresno, Calif.

    5 Colorado Department of Agriculture – Broomfield, Colo.

    6 Darigold Inc – Seattle, Wash.

    7 DoVen Foods LLC – Miami, Fla.

    8 Foodlink Group Inc. – Miami, Fla.

    9 Globex International – New York, N.Y.

    10 Grand Napa Vineyards – Napa, Calif.

    11 Hoogwegt U.S. Inc. – Lake Forest, Ill.

    12 IslandJon North America LLC – Atlanta, Ga.

    13 James Farrell & Co. – Bellevue, Wash.

    14 Lamex Agrifoods Inc. – Miami, Fla.

    15 Lawrence Wholesale LLC – Vernon, Calif.

    16 Leprino – Denver, Colo.

    17 Little Toad Creek LLC – Silver City, N.M.

    18 MacDonald Meat Company – Seattle, Wash.

    19 Merus LLC – Minneapolis, Minn.

    20 Metafoods LLC – Atlanta, Ga.

    21 Old Fashioned Cheese – Mayville, Wis.

    22 Pangea Growers Group – Boca Raton, Fla.

    23 Portal Pacific US – Rocklin, Calif.

    24 Prime International LLC – Logan, Utah

    25 Riceland – Stuttgart, Ark.

    26 Salt River Sisters – Harrodsburg, Ky.

    27 Scout & Zoe’s – Anderson, Ind.

    28 Scratch Food Group – Atlanta, Ga.

    29 SMAA Food Exports LLC – Charlotte, N.C.

    30 Stewco Farms – Bloomfield, Mo.

    31 Supreme Rice – Crowley, La.

    32 Sure Good Foods USA – Atlanta, Ga.

    33 Talmera USA Inc. – Los Angeles, Calif.

    34 Tropical Foods LLC – Miami, Fla.

    35 Trutana Foods – Great Falls, Mont.

    36 U.S. Dairy Export Council – Arlington, Va.

    37 U.S. Grains Council – Washington, D.C.

    38 U.S. Soybean Export Council – Chesterfield, Mo

    39 US Agricom Inc. – Doral, Fla.

    40 US Commodity Food Sales LLC– Doral, Fla.

    41 US Dry Bean Council – Frankenmuth, Mich.

    42 US Rice Producers Association – Katy, Texas

    43 USA Rice – Arlington, Va.

    44 Washington Apple Commission – Wenatchee, Wash.

    45 Western United States Agriculture Trade Association – Vancouver, Wash.

    46 Wisoman Foods Inc. – Hayward, Calif.

    47 Wonderful Citrus – Delano, Calif.

    USDA’s trade mission to the Dominican Republic is part of USDA’s broader 2025 export promotion strategy. So far this year, USDA has led trade missions to Hong Kong, Thailand, Peru, and Guatemala. Missions to Taiwan and Mexico are planned in the coming months.

    For more information on USDA trade missions, visit https://www.fas.usda.gov/topics/trade-missions.

  • California Dairies and US Dairy Export Council Represented in Upcoming USDA Trade Mission to Peru

    The U.S. Department of Agriculture will lead a high-impact trade mission to Lima, Peru from June 9 -12 aimed at expanding market access and boosting U.S. agricultural exports to address the $3.66 billion trade deficit with Peru. The delegation includes more than 50 agribusinesses, trade organizations and representatives from five state departments of agriculture working to strengthen economic ties and improve the trade balance.

    “USDA is committed to enhancing export opportunities for American farmers, ranchers and agribusinesses,” said Foreign Agricultural Service Administrator Daniel Whitley, who will lead the mission. “This trade mission will connect U.S. producers with key buyers in South America, improving economic opportunities, supporting rural prosperity and keeping American agricultural products globally competitive.”

    Peru is the fourth-largest market for U.S. agricultural exports in South America, and the U.S. is Peru’s second-largest agricultural supplier. Despite bilateral agricultural trade growing 263% to $5.3 billion since 2009, the $3.66 billion agricultural trade deficit persists. This mission aims to build on this growth, bridge the gap and increase U.S. exports.

    Trade mission participants will engage in business-to-business meetings with buyers from Peru and Ecuador, gaining market insights and fostering new business partnerships. Foreign Agricultural Service (FAS) staff and regional experts will provide in-depth market briefings, site visits and networking events to maximize trade opportunities.

    Administrator Whitley will be joined by Maryland Secretary of Agriculture Kevin Atticks, Montana Director of Agriculture Jillien Streit, and representatives from Indiana, Georgia, and Wisconsin, alongside a delegation of agribusiness leaders.

    1 Aero-Cos International – Marlboro, N.J.

    2 Alaska Seafood Marketing Institute – Juneau, Alaska.

    3 American Foods International Inc. – Doral, Fla.

    4 Ampac Seed Company – Tangent, Ore.

    5 Andes Global International LLC – Miami, Fla.

    6 Attebury Grain LLC – Amarillo, Texas

    7 Bear Fiber Inc. – Morganton, N.C.

    8 BioUrja – Houston, TX

    9 Boston Agrex LLC – Norwell, Mass.

    10 California Dairies Inc. – Visalia, Calif.

    11 Commercial Lynks Inc. – Alexandria, Va.

    12 Cotton Council International – Washington, D.C.

    13 Darigold Inc. – Seattle, Wash.

    14 Erie Foods International Inc.– Erie, Ill.

    15 G&C Food Distributors & Brokers Inc. – Doral, Fla.

    16 George F. Brocke & Sons Inc. – Kendrick, Idaho

    17 Great Northern Ag – Plaza, N.D.

    18 Heartland Essentials, LLC – Gilbert, Ariz.

    19 Hoogwegt US Inc. – Lake Forest, Ill.

    20 IND Hemp – Benton, Mont.

    21 Intervision Foods – Atlanta, Ga.

    22 James Farrell & Co. – Bellevue, Wash.

    23 JBS Food USA – Greeley, Colo.

    24 Kane County Agriculture Economic Development Corporation – Chicago, Ill.

    25 KIT International Inc. – Hackensack, N.J.

    26 Leprino – Denver, Colo.

    27 MAVIGA North America – Spokane, Wash.

    28 National Industrial Hemp Council – Washington, D.C

    29 Neil Jones Food Company – Vancouver, Wash.

    30 New World Trading LLC – Miami, Fla.

    31 Old Fashioned Cheese – Mayville, Wis.

    32 Pear Bureau Northwest – Milwaukie, Ore.

    33 Schreiber Foods Inc. – Green Bay, Wis.

    34 SMART Reproduction – Jonesboro, Ark.

    35 Sysco International Food Group – Jacksonville, Fla.

    36 Tedford/Tellico Inc. – Knoxville, Tenn.

    37 Texas Grain Sorghum Producers Board – Lubbock, Texas

    38 Tropical Foods LLC – Miami, Fla.

    39 Tyson Foods – Springdale, Ark.

    40 U.S. Dairy Export Council – Arlington, Va.

    41 U.S. Dry Bean Council – Frankenmuth, Mich.

    42 U.S. Grains Council – Washington, D.C.

    43 U.S. Highbush Blueberry Council – Folsom, Calif.

    44 U.S. International Foods LLC – St. Louis, Mo.

    45 U.S. Livestock Genetics Export Inc. – Mount Horeb, Wis.

    46 U.S. Meat Export Federation – Denver, Colo.

    47 U.S. Rice Producers Association – Katy, Texas

    48 U.S. Soybean Export Council – Chesterfield, Mo.

    49 USA Dry Pea and Lentil Council – Moscow, Idaho

    50 USA Rice – Arlington, Va.

    51 Western United States Agriculture Trade Association – Vancouver, Wash.

    The Peru trade mission is part of USDA’s broader 2025 export promotion strategy. Recent trade missions to Thailand and Guatemala generated nearly $23 million in 12-month projected sales for U.S. exporters. Looking ahead, USDA will soon announce application details for planned missions to Côte d’Ivoire, Mexico, and Taiwan.

    For more information on USDA trade missions, visit https://www.fas.usda.gov/topics/trade-missions.

  • Remarkable Market Growth Trajectory for U.S. Beef, Fresh Fruit & Tree Nuts in Taiwan

    In 2024, Taiwan was the eighth-largest market for U.S. agricultural exports, valued at $3.8 billion, 16 percent greater than 5 years ago. The top five U.S. agricultural exports to Taiwan are beef and beef products, soybeans, corn, wheat, fresh fruits and nuts. In December 2024, an agreement as part of the U.S.-Taiwan Initiative for 21st Century Trade entered into force. The agreement covers trade facilitation, customs, anticorruption, and support for small- and medium-sized businesses. The agreement has yet to conclude other topics undergoing negotiation, including agriculture. The United States was the largest supplier of agricultural products to Taiwan in 2024, accounting for 25 percent of Taiwan’s import market, followed by Brazil (10 percent) and China (6 percent).

    Macroeconomic Perspective

    Taiwan is a high-income East Asian economy with a real gross domestic product growth of 4.3 percent in 2024, driven by increased investments and a rebound in exports. Retail sales and spending on food services have continued to expand. Easing inflationary pressures, a healthy labor market, high wages, and rising household income will continue to support consumer sentiment and spending in the coming years, including imported foodstuffs.

    Demographics and Market Trends

    Taiwan has a population of 24 million people and a growth rate of 0.03 percent in 2024, with the largest population on the north and west coasts. Taiwan’s urban population is 80 percent of the total, and the major urban areas are New Taipei City, Taipei (the capital), Taoyuan, Kaohsiung, Taichung, and Tainan. As a wealthy economy, consumers in Taiwan have strong purchasing power and frequently prioritize products with health benefits. E-commerce is growing in popularity as a platform for agricultural and food products. Taiwan is highly advanced in technology and social media, making digital marketing essential for businesses entering the market. Importers in Taiwan value the United States as a trustworthy trade partner.

    Key Opportunities for Expanding U.S. Exports to Taiwan

    Beef and Beef Products
    Beef and beef products are the largest U.S. agricultural export to Taiwan, valued at $709 million in 2024, increasing 29 percent during the past 5 years. Taiwan ranked sixth among U.S. markets for beef and beef product exports in 2024. The United States ships frozen and chilled beef to Taiwan in a variety of cuts, including rib fingers, short plate, chuck roll, shank, and top blade. Additionally, the United States dominates grain-fed beef supplies in Taiwan, a segment of the market that continues to expand. The United States is the largest supplier of beef and beef products to Taiwan, accounting for 52 percent of the total market share, followed by Australia (19 percent) and Paraguay (13 percent). Taiwan continues to significantly rely on beef imports to fuel growing domestic demand due to limited beef production.

    Soybeans
    Soybeans are the second-largest U.S. agricultural export to Taiwan, at $601 million in 2024. Taiwan was the seventh-largest market for U.S. soybean exports in 2024.The largest soybean supplier to Taiwan is Brazil, accounting for $748 million, followed by the United States and Canada. Taiwan is expected to increase its soybean imports, as it currently relies on imports to meet 98 percent of its demand.

    Corn
    Corn is the third-largest U.S. agricultural export to Taiwan, at $384 million in 2024. U.S. corn volume increased by 92 percent since 2020, becoming more price competitive against other suppliers of corn, leading to a recovery in market share. Brazil is the largest corn supplier to Taiwan at $544 million, followed by the United States and Argentina ($136 million). Brazil’s corn exports to Taiwan declined by 24 percent in 2024, whereas U.S. corn exports to Taiwan increased 52 percent. In 2024, the United States gained market share as it harvested the largest U.S. crop in the fall of 2023.

    Taiwan’s pork industry has recovered from various non-African swine fever diseases that reduced its feed demand. A recovery in feed demand drove recent import growth.

    Wheat
    Wheat is the fourth-largest U.S. agricultural export to Taiwan, at $325 million in 2024. Taiwan’s top suppliers are the United States, followed by Australia ($73 million) and Canada ($7 million). The United States has historically been the major wheat supplier to Taiwan, with market share fluctuating between 70 and 90 percent in the last 10 years. Taiwan imports 99 percent of its wheat demand.

    In recent years, per capita wheat consumption increased as Taiwan’s high-income and sophisticated consumers demanded more diverse offerings. Taiwan has a vibrant baking industry, including some high-profile award-winning bakers. In addition to western-style wheat products, Taiwan’s consumers also have access to a diverse range of traditional wheat products, including noodles, buns, and dumplings.

    Fresh Fruits
    In 2024, fresh fruit was the fifth-largest U.S. agricultural export to Taiwan at $262 million, a 34-percent increase compared to the 2020 figure. The United States is the largest supplier to Taiwan, followed by New Zealand ($255 million) and Japan ($222 million). The top fresh fruits that the United States exported to Taiwan were fresh apples, cherries, grapes, peaches, plums, and oranges, including both conventional and organic fruits.

    Apples are the top imported fruit in Taiwan, with an import volume of 156,419 metric tons (MT) globally in 2024. The United States regained market share from South Africa and Japan, with U.S. apple exports reaching 63,637 MT, accounting for 41 percent of the market share by volume. This shift is due to moth detections on South African apples in May 2023, which led to an export suspension to Taiwan. South African apple exports were only 7,021 MT in 2024, with the United States filling this supply gap. Although people in Taiwan consume a wide variety of fruits, apples remain an important fruit in daily life.

    Dairy Products
    In 2024, U.S. exports of dairy products to Taiwan were $108 million, declining 11 percent during the past 5 years. This decline was in value. Volume remained steady between 2020 and 2023 but declined from 21,000 MT to 19,000 MT in 2024 due to New Zealand’s competitiveness and lower prices. The top suppliers for dairy products in Taiwan for 2024 were New Zealand (40 percent of imports), the United States (10 percent), and France (9 percent). Due to the westernization of diets and the popularization of healthy eating concepts, the overall dairy market continues to expand. The popularity of drinks like lattes and milk tea in recent years has led to an increase in the demand for liquid milk in many convenience stores and beverage shops on the streets.

    The butter market in Taiwan will continue to show stable import demand, as local production of butter is only a few tons and cannot significantly meet the overall market demand. New Zealand, France, and Australia were the top butter suppliers to Taiwan in 2024, at $93 million, $28 million, and $9 million, respectively. The United States is the seventh-largest supplier at $4.9 million in 2024.

    Tree Nuts
    U.S. tree nut exports to Taiwan reached $85 million, up 27 percent from 2020. The United States is the largest supplier to Taiwan, with a market share of 39 percent, followed by Vietnam (31 percent) and China (14 percent). Almonds and walnuts are the most prevalent tree nuts in Taiwan, together accounting for more than half of total global imports. U.S. almond exports to Taiwan were $30 million, and U.S. walnut exports were $21 million in 2024. In addition, pistachios are a fast-growing category, and the United States is the prominent supplier of pistachios to Taiwan at $21 million in 2024. The United States is the only supplier of pecans, with exports of $5 million in 2024. Food manufacturers have successfully promoted and positioned tree nuts as a healthy snack, in which 60 percent of the imported tree nuts are mostly used for snack processing, while 40 percent are utilized in bakeries to enhance texture, flavor, and decoration.

    Trade Policy

    In December 2024, the first agreement from the U.S.-Taiwan Initiative for 21st Century Trade entered into force, but additional negotiations from the initiative on other topics, including agriculture, have not concluded. This agreement was signed on June 1, 2023, by representatives of the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States and includes commitments on anticorruption, good regulatory practices, services domestic regulation, customs administration and trade facilitation, and small- and medium-sized enterprises. The first agreement from the U.S.-Taiwan Initiative on 21st Century Trade is available on the Office of the U.S. Trade Representative’s website.

    Conclusion

    Taiwan is a high-income economy with a large population and a major market for U.S. agricultural exports. U.S. agricultural and related products such as beef, soybeans, corn, wheat, fresh fruits, seafood, dairy products, tree nuts, and pork have a good opportunity to expand exports to Taiwan. Importers in Taiwan see the United States as a reliable business partner, with quality products, competitive prices, and transparent business practices.

  • What do Tariffs Mean for California Agriculture?

    Tariffs on foreign goods coming into the United States create both benefits and headaches for most American businesses. For agriculture, while there are some potential benefits, there are possibly more headaches.

    Tariffs, of course, have been used by countries for centuries to protect the health of existing and new industries, respond to unfair trade practices by trade partners (e.g., dumping, foreign government subsidized exports), and generate revenues.  In the U.S., tariffs date back nearly 240 years to the Tariff Act of 1789 in which President George Washington placed a 5% tax on all imports to generate revenue for our new republic and protect its domestic industries.  So, the United States has used tariffs for a long time by both Democratic and Republication administrations.

    On the positive side, tariffs protect California agriculture from imports that can be produced at lower costs and with less regulation.   This is especially the case for growers when bringing their commodities to market during harvest seasons and facing imports at lower price points in retail markets.  During the off-seasons, the benefits of import tariffs are somewhat less.  And in some cases, imported commodities actually serve as “placeholders” to meet retailer needs and consumer demand when those California commodities are not as readily available.  If those imports weren’t available, retailers will give that shelf space to other types of commodities and consumers would make other choices—hopefully only temporarily, but always facing the risk that consumption patterns will change permanently.

    Tariffs also can be a headache—perhaps, more like a migraine in many cases.  There are three main problems with tariffs from a business perspective in agriculture.

    First, because tariffs can be turned on and off very quickly, sales increases resulting from higher prices on imports are likely to be short-term.  The tariffs may stay in place for a while—or, they may not.  Generally, most growers shouldn’t make major commitments to expanding acreage and/or make crop changes unless it truly appears that the market opportunities created by tariff policies will be maintained for at least six months to one year, and possibly five to seven years, depending on the commodity.   

    For most growers, expansion is a slow and costly process because it takes time to acquire and prepare the land, and for plantings to yield significant production.  In California, for example, growers of tree nuts, berries, non-citrus fruit, and wine grapes have wisely demonstrated a conservative approach to expansion–their combined bearing acreage increased by 2.1% per year from 2020 through 2023.   And, ten of the twenty specific commodities studied in these groups actually reduced the number of bearing acres during this time period.

    Second, tariffs frequently result in reciprocal tariffs which may or may not be on like products.  So, grower gains in the American market may be mitigated by losses in foreign markets.

    For instance, in April 2018, China increased its “most favored nation” tariffs on selected agricultural products by approximately 15% in retaliation to U.S. tariffs on aluminum and steel.   Examples of the China’s tariff increases were:

    In this case, the agricultural products gained nothing from the U.S. tariffs, and the value of California’s agricultural exports to China declined by about $339.0 million from 2017 to 2019.  It is unknown whether the decline in exports to China was solely due to China’s tariff increase.  However, it certainly had to be a causal factor since the value of exports to China had been increasing over the prior three year period (i.e., 2015 through 2017) and there is no reason to believe that overall growth trends in dollar value would reverse themselves so suddenly and significantly in 2019.  The total export value declined 14.9% in 2019 compared to 2017.

    Based on the total value of California’s agricultural exports to China declining from 2017 to 2019 by $339.0 million, and given an average 15.0% increase in retaliatory tariffs, this equates to a decline of approximately $23.3 million in export value per 1.0% tariff increase in today’s dollars.  While the relationship between tariffs and export sales may not be perfectly linear, the decline is still going to be significant.

    Applying that experience to current times, China increased its tariffs from approximately 21.1% at the end of 2024 to 125.0% in April 2025.  If the ratio of approximately $23.3 million decline per 1.0% increase in tariffs in the 2018 scenario were applied to 2025, the decline in value of California agricultural exports would be approximately $2.3 billion.

    Third, tariffs and the resulting reciprocal tariffs present a “double whammy” for growers in that they not only shrink export markets but they simultaneously increase their operating costs.  Tariffs placed on imports will raise the costs of equipment, equipment maintenance, farm supplies, etc., and reciprocal tariffs will drive down sales in foreign countries.    

    A 10% increase in just some operating costs resulting from import tariffs on raw materials and parts on such items as  feed, chemicals, fuel, farm equipment and maintenance, etc. will increase total operating costs by 4.1% for an average California farm.  A 25% increase in these costs will raise total operating costs by 10.2%.  And, a 50% increase in these costs due to import tariffs will raise total operating costs by 20.5%.  In effect, average operating costs could rise by $30,000 to $140,000 per year for an average California farm depending on the size of the tariff and grower purchases. For an average size farm in California (about 328 acres), operating costs could rise anywhere from $90 to $500 per acre per year depending on the tariff.

    Having to deal with one of these issues would be bad enough, but dealing with all three definitely moves the needle from headache to migraine.

    The likelihood, of course, is that the current Administration and foreign governments will find ways to step back from the cliffs rather than jumping off.  While nobody will admit to blinking first, ways will be found to both save face and avoid a full-fledged trade war that lasts any meaningful amount of time.  But, sooner or later, these threats of trade wars are likely to turn into a reality even if on something less than a catastrophic scale.

    So, what can California’s agricultural industry do in these turbulent times of “on again,” “off again,” tariff threats?  Several things.  First, start taking steps to reduce vulnerability to higher costs and lower export sales because these situations are likely to arise again.

    For growers, control what you can control.  Becoming as cost-efficient as possible is always a good business strategy, but it is essential to survival during these tariff-induced turbulent times.  Every dollar saved reduces grower vulnerability. Lower operating costs help mitigate any lost revenues from reciprocal tariffs and gives growers options for shifting to alternative markets that might require selling at lower price points to avoid a buildup of inventory or straight crop loss.   

    For the industry, expanding the domestic market to the fullest extent possible helps reduce reliance on export sales.  For most commodities, there are only so many apples, cherries, grapes, almonds, etc. that an individual will eat in a given time period.  So, look for new uses, new users, or both in the American marketplace.  The odds are that there are some opportunities to expand domestic sales.

    Additionally, the industry should seek to solidify a “brand preference” for California-grown agricultural products in foreign markets.  Doing so can help make consumers in foreign markets less sensitive to price increases for California agriculture, thereby reducing the impact of reciprocal tariffs.  Although virtually nothing will help if reciprocal tariffs reach astronomical levels, foreign buyers who prefer California-grown commodities will probably pay some premium during moderate trade wars.  Industry efforts to cultivate foreign markets for the California brand requires considerable promotional/marketing efforts, but are likely to yield benefits during normal as wellas moderately turbulent times. — By Dennis H. Tootelian

    Dr. Dennis H. Tootelian is the founder of The Tootelian Company, a Sacramento, California-based marketing and management consulting company. He is an Emeritus Professor of Marketing, California State University, Sacramento.

  • Economist Shares How California Farmers Should Respond to Economic Uncertainty

    Economic uncertainty can be quite unsettling and can make important business and investment decisions difficult to navigate. Inflating costs, threatening tariffs and a volatile stock market are very concerning, especially in a state like California. World-renowned economist and financial expert Marci Rossell met with Matthew Malcolm on California Ag Network following a presentation she delivered to a group of American Pistachio Growers to address these concerns as they relate specifically to California farmers, whose success rely quite heavily on a healthy export market. Watch this brief interview to learn more.

    Please thank this video’s sponsor SQM Specialty Plant Nutrition for their industry support.

  • Mexico Poised to Become Top Destination for US Ag Exports

    U.S. food and agricultural exports to Mexico have surged 65% over the past four years, making it the fastest growing export market for a host of American agricultural commodities and products. Mexico’s growth as a destination for U.S. exports has been spurred by the country’s booming post COVID-19 economy and a rapidly growing manufacturing sector.

    The economic upswing has allowed Mexican consumers to expand their traditional diet, and U.S. food and agricultural producers are helping meet the country’s growing demand for meat, poultry, dairy, processed foods and feed grains. In 2024, U.S. food and ag exports to Mexico climbed to $31.4 billion, slightly below Canada, the top market at $32.4 billion.

    According to a new research brief from CoBank’s Knowledge Exchange, Mexico will likely surpass Canada to claim the top spot for the first time in 2025 despite some emerging headwinds.

    “The rise of Mexico as a customer has been a huge success story for U.S. agriculture,” said Rob Fox,  director of CoBank’s Knowledge Exchange. “But a few risk factors are developing that could slow the pace of additional growth. Mexico’s economy has been slowing, and the unusually strong peso over the last couple of years has weakened by about 15% since early 2024. Mexican consumers’ purchasing power will be more challenged in 2025.”

    Since 2020, Mexico’s share of all U.S. agricultural exports rose from 11.2% to 16.4%. On a volume basis, corn, pork, dairy products, soybeans and poultry products make up the top five U.S. commodities purchased by Mexico, according to USDA Foreign Agricultural Service data.

    At $13.9 billion, grain, feed, oilseeds and related products comprise the largest category of U.S. ag exports to Mexico. Strong recent growth is largely attributable to rising feed demand for the country’s expanding animal protein industry and severe drought, which is limiting domestic crop yields and grazing conditions. Given the ongoing trade tensions between the U.S. and China, Mexico will almost certainly overtake China as the largest export market for U.S. grain, feed and oilseeds in 2025.

    U.S. dairy exports to Mexico continue to follow a pattern of rapid growth. Total U.S. dairy export value to Mexico has risen by 76% since 2020, driven mostly by Mexico’s steadily increasing appetite for cheese. Mexico is the largest export destination for U.S. dairy products and almost twice the size of the second largest, China. And while Mexico’s domestic meat and poultry production continues to climb, consumption is expanding so quickly that imports from the U.S. are increasing as well.

    Mexico is also a sizeable importer of a wide array of U.S. packaged food and related processed agricultural products. Consumer-packaged goods, bakery and confectionery items represent most of those products. Other categories include fresh and processed fruit and vegetables, sweeteners and tree nuts.

    Over the past decade, cross border trade of food and agricultural products between the U.S. and Mexico has doubled to reach $80 billion. While free trade agreements have fallen out of favor in recent years, Fox said it’s hard to see the interconnectedness in food systems between U.S. and Mexico as anything but a “win-win” for both countries. “Consumers on both sides of the border benefit from a wider array of food choices at lower prices than they would otherwise.”

    Read the research brief, Mexico Poised to Claim Top Export Spot for U.S. Ag Products.

    About CoBank

    CoBank is a cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 78,000 farmers, ranchers and other rural borrowers in 23 states around the country.

  • May USDA Lending Rates for Ag Producers

    The U.S. Department of Agriculture (USDA) announced loan interest rates for May 2025, which are effective May 1, 2025. USDA Farm Service Agency (FSA) loans provide important access to capital to help agricultural producers start or expand their farming operation, purchase equipment and storage structures or meet cash flow needs.       

    Operating, Ownership and Emergency Loans      
    FSA offers farm ownership, operating and emergency loans with favorable interest rates and terms to help eligible agricultural producers obtain financing needed to start, expand or maintain a family agricultural operation.   

    Interest rates for Operating and Ownership loans for May 2025 are as follows:

    FSA also offers guaranteed loans through commercial lenders at rates set by those lenders. To access an interactive online, step-by-step guide through the farm loan process, visit the Loan Assistance Tool on farmers.gov.

    Commodity and Storage Facility Loans
    Additionally, FSA provides low-interest financing to producers to build or upgrade on-farm storage facilities and purchase handling equipment and loans that provide interim financing to help producers meet cash flow needs without having to sell their commodities when market prices are low.  Funds for these loans are provided through the Commodity Credit Corporation (CCC) and are administered by FSA.

    More Information
    To learn more about FSA programs, producers can contact their local USDA Service Center. Additionally, producers can use online tools, such as the Loan Assistance Tool and Debt Consolidation Tool to explore loan options.