By Leah Douglas and P.J. Huffstutter
WASHINGTON, Dec 10 (Reuters) – U.S. farmers facing steep losses this year welcomed President Donald Trump’s $12 billion aid package announced on Monday, but said they would need more than that to fully offset low crop prices and lost export opportunities from his trade war.
The aid will help farmers prepare for the next planting season, said five farmers and agricultural groups, four agricultural economists and three bankers. Yet they added that it is a fraction of farm losses and will not rescue the sagging farm economy.
“This support will serve as a lifeline for those simply trying to make it to next year. But it is just a lifeline, not a long-term solution,” said Mike Stranz, vice president of advocacy at the National Farmers Union.
Farmers have been saddled with low crop prices, higher costs for labor and inputs like fertilizer and seeds. Meanwhile, exports of crops like soybeans have declined due to Trump’s trade disputes.
Farm losses this year range from $35 billion to $44 billion for the nine major commodity crops, including corn, soybeans, wheat and peanuts, said Shawn Arita, associate director of the Agricultural Risk Policy Center at North Dakota State University.
Trump administration officials have said the aid is only meant to serve as a stopgap until favorable changes to farm support programs from Trump’s tax and spending bill take effect, which should result in higher government farm payments.
Agriculture Secretary Brooke Rollins said the administration’s ultimate aim is for farmers to have strong markets “instead of farming for government checks.”
In the meantime, “this bridge is absolutely necessary based on where we are right now,” she said at the White House on Monday.
Agricultural lenders expect less than half of farm borrowers to be profitable in 2026, with liquidity, income and inflation as their top concerns, according to a November survey of agricultural lenders by the American Bankers Association and Farmer Mac.
LOTS OF CASH, LITTLE RELIEF
Even before the new aid, the Trump administration was set to supply farmers with a near-record $40 billion in total government payments this year, fueled by ad hoc disaster and economic support.
Trump’s tax and spending law, called the One Big Beautiful Bill, could push some farm payments higher next year. It increases reference prices – below which farm safety net programs are triggered – for commodities like corn and soybeans.
This week’s aid program is “intended to help producers stay afloat until the major improvements from the One Big Beautiful Bill Act, including a 10% to 21% increase in reference prices, take effect in October of 2026,” said Richard Fordyce, the U.S. Department of Agriculture’s under secretary for farm production and conservation, on a Monday call with reporters.
Reference price adjustments, though welcome and significant, are not enough to help farmers get ahead of mounting debt and higher expenses, said Wesley Davis, an independent agricultural economist.
More than half of farmers expect to use federal aid payments to pay down debt, rather than to invest in machinery or working capital, according to an October Purdue University/CME Group survey.
The $12 billion in aid will “get spread out quite a bit,” said Jennifer Ifft, professor of agricultural economics at Kansas State University. “If you’re in a bad place financially, this is just a bridge.”
AID ONLY ‘SLOWS THE BLEEDING’
Soybean farmers were particularly hard hit when China halted all U.S. soybean imports between May and November. Farmers lost billions of dollars in soybean sales at the start of their peak export season and will likely not recover that lost demand, according to traders and analysts.
The federal aid will only address about one-quarter of soybean losses, said Caleb Ragland, a Kentucky farmer and president of the American Soybean Association.
“We’re appreciative of an economic bridge,” Ragland said. But the money is just “plugging holes and slowing the bleeding.”
Most of the $12 billion in aid will not be available for farmers of produce and vegetables. They are eligible to apply for support from a $1 billion portion of it, which will not be nearly enough to cover their losses, said Kam Quarles, CEO of the National Potato Council and co-chair of the Specialty Crop Farm Bill Alliance.
For russet potatoes alone, losses this year are about half a billion dollars, Quarles said.
“The need is much bigger,” he said.
During Trump’s first administration, he issued about $23 billion in trade aid to farmers over two years. Farmers in some regions were overpaid because of how the USDA calculated payments, according to a 2021 Government Accountability Office report.
On Monday, Fordyce said this tranche of aid will not be adjusted by region, with payments calculated based on how many acres farmers have planted, production costs and other factors.
(Reporting by Leah Douglas in Washington and P.J. Huffstutter in Chicago; additional reporting by Karl Plume in Chicago; Editing by David Gregorio)
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