Minnesota farmers brace for new Trump tariffs

DILWORTH, MINN. – Glen Hjelle’s farm outside Elbow Lake in western Minnesota sits a long way from the White House.

But as a young man, he remembers how then-President Jimmy Carter’s embargo of the Soviet Union rattled wheat markets like nothing he’d see for the coming decades.

That is, until the presidency of Donald Trump.

“I’m really nervous what’s going to happen,” said Hjelle, speaking by phone from Grant County. “Last time [Trump] was in, ag markets crashed.”

From windmills to cow pastures, Minnesota farmers may seem far from global markets. But with access to the sea in Duluth, Mississippi River ports and rails headed west to the Pacific, crops coming off Minnesota farms reach every corner of the Earth.

They also remain extra vulnerable to trade saber-rattling.

“A lot of the ag production in the [Upper Midwest] is exported,” Jay Debertin, the CEO of Inver Grove Heights-based agribusiness CHS Inc., said on Wednesday at a Federal Reserve conference in Minneapolis. “If trade flows become interrupted, we have a fundamental problem of what to do with the crop. Because we’ll grow it again next spring. It’s not like manufacturing where we can slow [factories] down.”

Farmers might be holding their collective breath as Trump, who once said trade wars are “easy to win,” moves back into the Oval Office.

Still, it’s not as if farmers are throwing roses for the outgoing Biden administration. Spending accelerated on farm programs to curb climate change, but the Democratic president’s link to inflation drew farmers’ ire as prices on fertilizer and diesel skyrocketed. Meanwhile, though crop prices spiked following Russia’s invasion of Ukraine in 2022, grain values are now low.

And there’s been no new trade deal in years, with economic nationalism on the rise, industry officials say.

“[We] saw some deals started under [George W.] Bush that were finalized under the Obama administration, but over the last decade we’ve seen a change in how the U.S. approaches trade,” said Devin Hoffarth, market development and industry relations director for the Minnesota Corn Growers Association. “A lot less of these deals are happening. Quite frankly, the negotiations just aren’t being had.”

All of this has left farmers feeling uneasy.

Earlier this month, in a strip mall meeting room in Dilworth, just east of Fargo, at a small grains conference put on by groups including the University of Minnesota Extension and Minnesota Wheat, a PowerPoint slide from an Alexandria investor noted corn prices cratered toward $3 a bushel under Trump.

Hjelle remembers the time well — and the U.S. Department of Agriculture payments that arrived to offset his losses.

“Yeah, the Trump Bucks. It was insane,” Hjelle said. “Put me in a different tax bracket, all the money he threw at us.”

Whether the federal government could unleash those payments again remains an open question.

Minnesota producers say the state’s domestic markets buffer farmers some from trouble abroad.

Darin Johnson, a soybean farmer outside Wells, says he remembers tales of soybeans piling up outside elevators back in 2018. But in south-central Minnesota, the prevalence of local processing facilities and hog farms allowed farmers to weather the storm.

“In southern Minnesota, we’re pretty lucky we have so many [processing facilities] right near us,” said Johnson, who is also president of the Minnesota Soybean Growers Association. “The market that we have here a lot of that stays right here.”

Still, he knows that represents only a sliver of the industry. Half of Minnesota’s exports go to China, Canada or Mexico.

And under Trump, as well as Biden, who kept tariffs on Chinese imports in place, farmers have found it’s just as easy for China to send a boat to Brazil to buy beans as sending one to the U.S. Pacific Northwest.

“One out of three rows [of soybeans] in Minnesota are going to China,” Johnson said. “We’re looking for trade, not aid.”