Reference News Network, August 12 report - According to the Bloomberg News website on August 8, US President Donald Trump has repeatedly stated that he loves farmers. However, his actions are affecting the entire agricultural industry, as tariffs have increased the costs of various products from tractors to fertilizers, and squeezed the profits of American farmers already struggling with low prices.

As agricultural giants such as Mosaic, AGCO Corporation, and Bunge report their latest performance, the wide-ranging impact of Trump's trade war is becoming clearer: the supply of key nutrients needed for crop growth to the United States has significantly decreased, machinery prices have risen, and due to increased uncertainty, crop buyers are limiting their purchases.

While tariffs are increasing costs, American farmers (who are largely supportive of Trump) have little room for buffer to offset this impact. With global supplies ample, the benchmark prices of corn, soybeans, and wheat have fallen to the lowest levels since the peak of the pandemic lockdown measures, leading to reduced agricultural income.

Bert Frost, Executive Vice President of Sales, Market Development, and Supply Chain at CF Industries Holdings, said during a July 7 earnings call: "Because corn prices have not kept pace with rising input costs, the economic situation of North American farmers has long been a concern in the industry."

Frost also said that tariffs have delayed or reduced the import of urgently needed fertilizers in the second quarter of the United States, which has left the company with "extremely low inventory in the United States and Canada, and a desperate need to replenish it."

Trump asked farmers to give his tariff policy some time to take effect.

Previously, Trump reiterated his support for farmers on the Consumer News and Business Channel, calling them "a very important part of this country," and stating that he hopes to work to ensure farmers get the labor they need, despite many workers being deported due to his immigration crackdown.

"We will not do anything to harm farmers," Trump said, "we will take care of our farmers. We cannot let farmers be without labor."

Trump's new tariffs came into effect on July 7, which may further worsen the situation. This move will further increase the base tariffs implemented in April and continue his actions to reshape global trade. According to Bloomberg Economics, overall, these measures by the president will raise the average tariff rate in the United States to 15.2%, far higher than last year's 2.3%, setting a record high since World War II.

Erik Hansotia, CEO of AGCO Corporation, said: "The prices of some of our products and those of all our competitors will rise." AGCO recently announced price increases for some products in North America. He also said the company may raise prices in other regions to offset the impact of tariffs, "we will implement price increases when appropriate and feasible."

Jenny Wang, Vice President of Business at Mosaic, said during a phone call with analysts on June 6 that shipments of two key fertilizers (phosphates and potash) to the United States had dropped by 20% compared to the same period last year and are expected to "continue to decrease."

Mosaic stated that phosphate transportation was particularly affected due to most origins being subject to tariffs. Countries such as Morocco, China, and Saudi Arabia are major global exporters of key nutrients required for crop growth.

Jenny Wang also said that the timing of Trump's tariff policy coincides with tight supply of components used to provide nutrients for crops and global price increases.

The North American fertilizer price index has surged 35% this year, reaching its highest level since 2022. In 2022, after Russia's invasion of Ukraine, market concerns about supply led to a surge in fertilizer prices.

Aside from cost issues, tariff uncertainties have also impacted crop demand. Data compiled by Bloomberg from the US Department of Agriculture shows that the unfulfilled sales of US soybeans scheduled for delivery in the upcoming sales year are at the lowest level in nearly 20 years.

Greg Heckman, CEO of Bunge, said last week during a call with analysts that customers are now favoring "very spot transactions," meaning they only purchase crops they need immediately. Bunge reported adjusted earnings per share for the second quarter of the lowest since 2018. (Translated by Wang Diqing)

Original article: https://www.toutiao.com/article/7537621394205573632/

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