Beau Hanson faced critical decisions as spring planting approached.
Like many farmers in western Iowa, Hanson was gearing up in early April to plant crops that would determine his financial outcome at harvest time.
Farming inevitably involves uncertainty, and in Monona County, where Hanson resides, growers are carefully evaluating their options. Recent years have been difficult: a wet spring in 2024 forced some to replant multiple times, while this year’s conditions lean toward drought. Soybean prices have dropped steadily, yet input costs for seed and fertilizer remain high, compounded by rising loan interest rates now nearing 9 percent—more than double what they were three years ago.
Adding complexity to this challenging environment is the ongoing trade conflict.
In April, tariffs imposed on Chinese imports reached 145 percent, triggering retaliatory duties of 125 percent on U.S. agricultural exports to China. This escalation significantly taxes Midwestern crops, particularly soybeans, which last year accounted for $12.8 billion in sales to China. Combined levies have pushed the effective tariff on soybeans to 155 percent, according to industry estimates.
Even before the latest round of tariffs, many Iowa farmers anticipated a third consecutive year of financial losses. The agricultural economy is slowing, with lenders adopting a cautious approach and equipment dealers noting reduced sales as farmers extend the use of aging machinery rather than investing in new equipment.
“Every year brings uncertainty,” Hanson said. “But this one feels particularly challenging.”
Raised in Castana, Iowa, Hanson played football locally before returning home after college to take over the family farm adjacent to his childhood home. While many peers left farming for urban jobs, Hanson is committed to building his future on the land cultivated by four generations of his family.
He manages 700 acres planted with soybeans and corn, supplemented by a herd of 400 cattle. His three children, active in 4-H, help care for newborn British White Park calves in the barn.
Monona County, like many rural Iowa areas, voted overwhelmingly for former President Trump, with 72 percent support. Hanson declines to discuss his personal vote, noting his role on the county fair board and his position selling seed to local customers.
“I prefer to avoid politics,” he said thoughtfully, pausing to kick the dirt. “But it’s clear a trade war won’t help grain prices here.”
A Reflection of the 1980s Farm Crisis
During five days in early April, I traveled through western Iowa’s rural communities, speaking with farmers. These roads are familiar; I grew up working on my family’s small corn and soybean farm in Blencoe, roughly 20 miles southwest of Hanson’s farm.
In my teenage years during the 1980s, I listened to farmers at Helen’s Cafe in Onawa discuss rainfall, yields, and fishing tales. A good year was marked by my father purchasing a new pickup truck. A particularly hard year meant practical gifts like a clock radio, likely bought as a farm expense.
Farmers today often recall the hardships of the 1980s. “The ’80s, the ’80s, the ’80s,” said Gary Jensen, who farms in the Loess Hills region, a rugged area rising sharply from the Iowa plains. “That era comes up all the time.”
The 1980s were a devastating period for American agriculture. A trade embargo against the Soviet Union caused grain prices to collapse just as the Federal Reserve raised interest rates to as high as 20 percent to curb inflation. Land values plummeted, undermining farmers’ loan collateral. An estimated 300,000 farmers defaulted on loans, triggering the largest wave of bank failures since the Great Depression and devastating small towns.
At 33, Jensen did not experience that crisis firsthand but understands its lessons. Preparing his 1989 Case tractor for planting, he laughed when asked about its age and said he has no plans to replace it soon. “There won’t be any new equipment purchases anytime soon,” he remarked.
Farmers are cutting expenses, noted Barry Benson, senior vice president of agribusiness banking at the First National Bank of Omaha. “They’re running combines and tractors for an extra year,” he explained.
Before planting season, Benson and other lenders typically meet with farmers to discuss operating loans. A farmer with about 400 acres might borrow $250,000 for seed, fertilizer, and land leasing, repaying the loan after harvest.
However, Benson estimated that one-third of last year’s loans could not be repaid on time and required restructuring, forcing some farmers to take on additional debt or sell assets.
Dan Dotzler, president and CEO of United Bank of Iowa in Ida Grove, described having “difficult and extended” conversations with farmers.
“We do everything possible to support these long-standing relationships,” Dotzler said, “but we also advise farmers to seek additional income sources. Many need to find jobs off the farm to support their families. The current environment is very different from a few years ago.”
Dotzler remains cautiously optimistic that farmers who manage expenses well will endure. Yet he is concerned about high interest rates, costly equipment repairs, the absence of a new Farm Bill, and the uncertainty surrounding tariffs.
“There’s a lot of uncertainty about how tariffs will unfold and their impact,” he said. “That creates anxiety.”
The Crucial Role of Exports
One factor that helped the farm economy rebound after the 1980s was expanding export markets, especially China.
China’s rapid growth created strong demand for soybeans and other feed products. From virtually no imports in the 1990s, China grew into a key market, peaking in 2022 with $36.4 billion in agricultural imports, including soybeans, corn, sorghum, poultry, and pork.
Exports are vital because American farms produce far more than domestic consumers can absorb. Modern Midwestern farms use advanced GPS-guided planters that optimize seed placement and depth, boosting efficiency. Improved seed varieties also increase yields and resist pests and diseases.
Corn, used for animal feed and ethanol, has a larger domestic market, with exports comprising about 15 percent of production.
Soybeans, however, are highly vulnerable to trade disruptions, with roughly 40 percent of the crop destined for export.
“Exports, exports, exports — that’s where the market lies,” said Milo Ruffcorn, a 66-year-old farmer from Mondamin, Iowa. “We need reliable buyers for our corn and soybeans.”
Concerned that prolonged trade tensions with China could suppress soybean prices, Hanson and many others are focusing heavily on corn this planting season.
Since May 2022, prices for both corn and soybeans have dropped about 40 percent. Facing potentially unprofitable prices, farmers are prioritizing crops that yield more per acre—primarily corn.
Hanson plans to plant corn on 90 percent of his acreage. Nationally, farmers are expected to plant 95 million acres of corn this year, the highest level in five years, according to the U.S. Department of Agriculture.
After accounting for rent, crop insurance, seeds, chemicals, and loan repayments, Hanson estimates he can earn a $60,000 profit, or about $85 per acre, on corn. His calculations for soybeans, however, indicate a loss.
“It doesn’t make sense to plant a crop if you expect to lose money,” Hanson said, shaking his head.
Expectations of Government Support
At Frannie’s Cafe on Main Street in Onawa, Karol King enjoyed a pork tenderloin sandwich with macaroni salad. King, who employed my father in the 1990s and 2000s installing irrigation systems, is a lifelong Republican and Trump supporter.
He praised the former president’s tough approach to tariffs, especially against China, despite acknowledging the hardships for farmers like himself.
“It’s going to be tough, but they’re weaker than we think, and we’re their biggest customer,” King said.
Even if trade tensions persist and grain prices stay low, King and other farmers believe the government will intervene to provide relief.
“For some reason, he supports farmers and blue-collar workers,” King said. “We won’t be left out to dry.”
The belief in government backing is reinforced by statements like those posted by Trump on his social media platform in mid-April, declaring that American farmers are on the “front line” of the trade conflict with China and pledging to “PROTECT OUR FARMERS!!!”
During Trump’s first term, tariffs on China were met with retaliatory duties, and the government responded with an emergency $23 billion aid package for farmers.
President Biden and Congress have continued some subsidy programs, including a $10 billion payout last year to offset low commodity prices. Hanson credits these payments with helping him break even on some fields and earn a modest profit on others.
Farmers I spoke with expressed a desire to sell their crops at strong market prices but also showed a willingness to accept government assistance if available.
“I’d prefer corn above $5 a bushel and soybeans over $11,” Hanson said. “Without that, we need a safety net to protect farms like mine.”
Still, Hanson remains cautious about relying on government aid. “Will we get a payment this year?,” he shrugged. “That’s another unknown.”
