From Biden's Chickenomics to Trump's Trade War 2.0, Farmers Keep Getting Burned
David Haggith

Which came first? The incineration of chickens or the heating up of egg prices?

Uncertainty played big on New York stock market screens today as Canadian retaliatory tariffs stayed in play and then Trump retaliated against the retaliation by saying he had given orders to raise tariffs on Canadian goods from 25% to 50%, even though he has for now postponed them for a month, and then Ontario’s premier, who had added a 25% tariff on electricity to the US, took it back off the same day he added it because the Trump administration agreed to sit down and talk with him later in the week.

The S&P 500 bounced from positive near its open, to being down almost 1.5% to positive again and finally closed down 0.75%. The Dow stayed down all day, but bounced a lot too, and finally settled its stomach at a rumbling, grumbling -478.

At least, the day was only half as bad as yesterday:

Financial markets, reflecting investors’ fears, sent the Dow Jones Industrial Average down nearly 900 points Monday while the Nasdaq composite suffered its worst day since 2022. A three-week market sell-off intensified….

Economists across the political spectrum point to the president’s pattern over seven weeks of stirring confidence-sapping uncertainty among businesses, everyday consumers and investors, not to mention the federal bureaucracy and on Capitol Hill. Financial markets thrive on stability and predictability. Trump’s on-off tariffs aimed at Canada and Mexico, China, and promised in April against exporters everywhere are the opposite of predictable.

The president’s rolling federal layoffs, firings, frozen grants to contractors and shuttered agencies under the Department of Government Efficiency (DOGE) have produced ripples of unease nationwide, even if most Americans support the general goals.

At least, Trump has brought egg prices way back down. President Biden got in a chicken fight with farmers, killing, it seemed, half the chickens in the country because they might have bird flu. Trump rushed to get other nations to send eggs to make up for the Biden flu, which probably killed more chickens than Avian flu ever has.

Of course, one farmer’s loss of egg layers is another farmer’s nest egg as the price of eggs rises for those who still have chickens, due to knocking out the competition; but for consumers it is just loss all the way—fewer eggs available to buy, higher prices to pay.

Former President Biden lamented that voters blamed him for high prices in the aftermath of the pandemic, even as economic indicators proved resilient. Six months before the November elections, most Americans told pollsters the economy was in recession, a false impression tied to inflated prices and wage stagnation. U.S. economic growth at the time had been increasing for years.

Financial writing like that is why you need me. It’s amazing how resilient economic indicators can look when you control much of the data. I’ve always said Americans vote their pocket book, which meant they were not that likely to want to vote in an incumbent president who presided over a period of high inflation, even if that course was originally laid in by the Covid lockdowns and stimulus checks and bailouts that were expediently approved during Trump 1.0. That was the inflation I promised was coming from all the economic destruction of those lockdowns and all that stimulus money.

As for a general recession being a false impression, consumers knew well what they were feeling, whether the statistics and their economists told the story or not. Those new jobs that were supposedly so strong were almost entirely made up of new part-time jobs, which were being attained by people who had to have more than one job to make ends meet. On top of that, over two-million of those new jobs were revised away during the last couple of years. So, they were phantom jobs in the first place. They never actually existed.

Unemployment didn’t rise much during the Biden years either because millions chose to retire early during the Covidcrash, so they were not counted. Nearly four-million others were sick or dead—whether due to Covid or the vaccines—so were not “available for work,” which means they were not eligible for unemployment so didn’t get counted either. Others were on the roll so long their benefits expired, at which point they were no longer counted as unemployed in the headline numbers either. The broken labor metrics did not adequately tell the true story. That said, Biden’s mandatory chicken executions certainly created a chicken recession.

What we see now as tariffs go on, get jerked back, then go on again, then get jerked back again, then get an added promise that they will be twice as high when they finally do go back on again is the stock market rocking badly back and forth like a ship on a stormy sea. Corporate lobbyists are all running from one side of the ship to the other, trying to bail it out by getting exceptions built into the tariffs.

In just about every case, tariffs are bad for your economy.… Even just putting them on and putting them off is itself harmful,” said former Obama White House economic adviser Jason Furman. “You never want self-imposed uncertainty if you can avoid it.”

What we have right now is now is relentless self-imposed uncertainty.

Potential downsides posed by Trump’s tariffs are stagflation, higher inflation and “withdrawals of confidence and purchasing power that could possibly tip the economy into recession.… Every kind of uncertainty premium is going way up.” —Larry Summers

Of course, those two, who were in the news today, are economists who faithfully served Democrat presidents, and they personally make enough money that they don’t have to worry about Biden’s Chickenomics. The eggs on their breakfast tables are always sunny side up. Nevertheless, I agree with them on that much. I’d choose better economists if I had found one speaking on the subject of uncertainty due to tariffs.

Farmers are getting plowed under

Farmers, on the other hand, are sweating out the new rounds of tariffs, particularly the tariffs that are actually fully in play with China and have been in play since the days when Trump started his “easy-to-win” trade war with China during Trump 1.0. What particularly has them worried, according to one of their spokesmen today, is that they have never recovered from 1.0, even with all the government assistance Trump had to put into play to help them through after starting the easy-to-win Chinese tariffs, and now those tariffs are getting doubled!

Caleb Ragland, a soybean farmer in Magnolia, Ky., voted for President Donald Trump in 2016, 2020 and 2024. Now, however, he has to navigate a tariff minefield at a time when the sector is already facing major headwinds.

Ragland works with his wife and three sons and has deep roots in the community. His family has been farming on the land for more than two centuries. But over the past few years, he has seen a double-digit percentage decline in crop prices while production costs rise. Soybean futures have gone down more than 40% over the past three years along with corn futures….

This isn’t the first time farmers have had to deal with new tariffs. Back in Trump’s first term, the trade war with China in 2018 — a time when Ragland said the agricultural economy was “in a much better place than it is right now” — cost the U.S. agriculture industry more than $27 billion, and soybeans made up virtually 71% of annualized losses.

That trade war has caused lasting damage. To this day, the U.S. has yet to fully recover its loss in market share of soybean exports to China, the world’s number one buyer of the commodity, according to the ASA.

“Tariffs break trust,” Ragland said. “It’s a lot harder to find new customers than it is to retain ones that you already have.”

And that’s one of the huge problems I’ve been trying to highlight. When you anger those who buy US products, like we’ve just done with Canada to where the people who buy US products find someone else to do business with—as all those Canadians business people and consumers are doing now with boycotts—you may never get that market share back. It’s hard to get over the bad feelings. You become regarded as an unreliable trading partner.

“We’re already at the point that we’re unprofitable,” Ragland said. “Why on earth are we trying to add insult to injury for the ag sector by basically adding a tax?”

A tax is a tax, and conservatives supposedly don’t like them. When you tax goods coming from China or Canada so that American buyers pay more, then China or Canada tax your goods that are coming their way so that your producers (farmers in this case) lose sales. That is the fundamental reason for tariffs in the first place, not revenue generation. They’re about protectionism. So, China applied tariffs in Trump Trade War 1.0 on soybeans and pork (two major US exports to China), and US farmers have never recovered from them, as they remain in effect from a war that never ended.

One of the farmers’ biggest concerns is that US import tariffs on Canadian products coming into the country will drive up their fertilizer costs. Canadian businesses certainly aren’t going to reduce their prices enough to offset 25-50% tariffs, and buying millions of tons of fertilizer from other sources will push the prices of those sources up due to the big rise in demand. The combination of further loss of market share for our farmer’s products due to foreign retaliatory tariffs plus spikes in operating costs due to US tariffs on imported goods and materials has farmers sweating bullets (or pullets):

“Usually when you ask [farmers] a policy question, by far and away the most important policy is crop insurance,” Michael Langemeier, agricultural economist at Purdue University, said. “Crop insurance is right up there with apple pie and baseball. It’s a program that’s very well liked, because it provides a very effective safety net.”

“The fact that crop insurance was a distant second to trade policy speaks volumes,” he also said.

The damage to farmers from the full-on, re-energized trade war with China is already being felt while the damage from whatever is going to happen with Canada mostly hasn’t begun yet:

Between mid-February and early March, there was a 33% per acre drop in net return for soybeans and corn related to the tariffs. That’s on top of the fact that 2025 was “not ending up to be an extremely profitable year before this,” he revealed.

And it wasn’t “an extremely profitable year before this” because farmers were still experiencing the impacts of Trade Wars 1.0. Of course, Trump will put in place a new farm bill to help cover these losses as he had to do last time, but that just means the US taxpayer is on the hook for all of it (or actually that it just all gets piled into the national deficit since we no longer pay for the programs we create). And the farmers will still feel the lasting impact of loss of market share just as they do now from Trump Trade Wars 1.0.

“I think we’ve seen the ag stock sell-off just because of general concerns that the farmer is going to not be as profitable this year,” Morningstar’s Seth Goldstein said in an interview with CNBC.

Share

 

 

 

Economic, Social and Political News of Our Troubled Times -- a non-partisan daily collection of the most consequential stories about our complex times from multiple sources around the world.

 

 

www.thedailydoom.com