Debt, Dollar Value Hurt Ag Market
Published: Friday, July 11, 2025
The following is from Alan Guebert, a freelance agricultural journalist from Illinois.
With 2025 half gone, the cautious American ag economy, like the slowing U.S. economy, now tiptoes into its second half.
Key U.S. ag markets quietly survived the raucous first half. For example, November soybean futures opened January near $10.28 per bushel and closed June at roughly $10.27.
When was the last time soybean futures survived the first six months of any year—and both the South American harvest and U.S. planting seasons—and lost but a single penny? The safe answer would be never.
It wasn't the only almost-asleep ag market this year. Cotton futures hardly budged from January to June while new crop corn and wheat futures slowly drifted 6 and 7% lower over the same period.
Livestock markets, however, were active. Live cattle futures, edgy over record low numbers and sluggish herd rebuilding, rose $19 per hundredweight from January through June while hog futures added $11 per hundredweight over the same six months.
That means retail red meat prices will likely remain strong through year's end.
Today's yawning grain markets, however, will wake up if mid-summer heat and dryness threaten corn's fast-approaching pollination season and soybeans' bloom period. The coming six weeks will tell that tale.
Like ag markets, U.S. equity markets have been remarkably resilient. The Dow 30 Industrials Average, for example, is up 3.6% over the shaky first six months while broader measures like the S&P 500 and the NASDAQ both finished 5.5% higher.
Even interest rates—the target of endless White House complaining—are either lower or equal to rates a year ago. For example, today's average 30-year fixed rate mortgage is pegged at 6.8%, a half point lower than June 30 last year.
Two numbers the White House rarely mentions, however, threaten to undermine all this domestic tranquility. The first is an honest accounting of the debt the White House and GOP-led Congress are now heaping on taxpayers through their blanket-stretching budget bill.
As we await its final form, all we can really be certain about is that whatever Congress and the White House finally end up with, its impact on the deficit will be far higher than what either claims.
The second number that few in Washington are talking about is the fast-sinking value of the dollar across international markets.
Almost all of 2025's six-month slide—that, according to the New York Times, is the "worst in more than a half a century"—is due to "the seismic event" of the White House's "aggressive tariff push and more isolationist foreign policy."
American farmers are well aware of the market-killing impact of the inscrutable Trump tariff program. "From January through April," the American Farm Bureau Federation recently noted, the U.S. "imported $78.2 billion in agricultural products while exporting just $58.5 billion."
The resulting $19.7 billion deficit "is the largest ever recorded for the first four months of a year and signals that the 2025 deficit could surpass previous records."
Worse may lie ahead, noted farmdocDAILY in quoting a recent story by Pro Farmer.
"'We have no plan—none—to deal with the growing trade gap,' said one senior industry executive ..." according to the Pro Farmer piece. "'It's just not bad policy; it's no policy at all.'"
Not according to Secretary of Agriculture Brooke Rollins who, in a July 1 press release, touted a new trade deal with Namibia that she valued at just $15 million, or .07% of 2025's January-April ag trade deficit. Rollins called the deal a "win for farmers."
That's slicing the baloney pretty thin—especially when farmers and ranchers are expected to receive $42.4 billion in "federal government direct farm program payments" this year.
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