After farmers struggled with low crop prices and reduced market opportunities in 2024, many are hopeful the worst will be over in 2025. But the coming year could be even more tumultuous, experts warn, as volatile commodity prices and the specter of another global trade war stand to deepen margin pressures on the farm.
Bumper corn and soybean crops throughout 2024 have reduced income prospects and forced many farmers to cut back on expenses, especially as they face higher interest and labor costs. The downturn has rippled throughout the agricultural economy, prompting thousands of layoffs across major processors and equipment companies, from Tyson Foods to Deere.
Experts predict these conditions to continue this year, with the World Bank projecting food commodity prices — including grains and oils — to slump another 4% this year before leveling off in 2026. Changes in U.S. policy with the start of a second Trump term could also reshape global markets and food prices if the president-elect follows through on threats of widespread tariffs and mass deportations.
Still, there are reasons for optimism in 2025: Higher livestock prices, hopes for a new farm bill and increasing demand for sustainable farming and technology solutions could spur economic growth. Many farms and agribusinesses are now beginning to reposition operations to prepare for an anticipated upswing in the market.
Here’s a look at the five biggest trends set to shape agriculture this year, and how they could bring new opportunities — or challenges — to the sector.
Challenging conditions, supply imbalances
While most experts predict modest growth for the general U.S. economy in 2025, conditions are volatile and uncertain for farmers and agriculture.
Agriculture producers are facing some of the most challenging conditions they’ve seen in recent years, including a stifling combination of low commodity prices and high input costs. Net farm income decreased $6 billion last year driven in part by a global surplus of grains and soybeans.
While crops fared worse than livestock in terms of income, supply imbalances and policy uncertainty have some experts concerned about 2025. Also, the incoming Trump administration touted tariff hikes and mass deportations, threatening global trade and migrant labor, two huge challenges for agriculture.
“In theory, these policies could achieve some limited objectives…but it is very hard to paint them as anything but negative for the U.S. farm economy,” Rob Fox, director of CoBank’s Knowledge Exchange, said in a report.
Significant impacts to agricultural trade and producer profitability worldwide weighs on global profitability, according to Rabobank.
In addition to trade disagreements, a strengthening U.S. dollar could mean fewer exports as American-grown commodities become more expensive to global trade partners.
Meanwhile, food and agriculture companies have positioned themselves for a rebound year following layoffs throughout 2024. Deere & Co. reduced its manufacturing and office workforces by the thousands, while processors like Tyson Foods shut down a number of plants to shore up costs.
Despite these ongoing pressures and political uncertainties, farmer confidence is higher than it’s been in years. According to Purdue University’s Ag Economy Barometer, which measures the health of the U.S. farm economy, the future expectations index rose 37 points to 161 following the election results with farmers looking forward to a favorable tax and regulatory environment under the new administration.
Weather and disease events will impact crops and livestock
A developing La Niña event and the worsening spread of bird flu are expected to impact crop and livestock production in 2025.
In recent months, experts have pointed to a significant rain delay in Brazil and dryness in Argentina and southern parts of the United States as early indicators for the weather event.
Drought has already delayed soybean harvests in Brazil, resulting in delays of safrinha corn planting and maturation, according to Rabobank. The overall intensity of La Niña should be mild, analysts said, but that could change by March or April.
Additionally, the bird flu virus has worsened over the past year, affecting not only millions of wild birds and commercial poultry, but hundreds of dairy cattle herds and dozens of humans as well.
The first death of a human bird flu patient was reported in Louisiana this month after exhibiting severe respiratory symptoms. Public risk of infection remains low, according to federal agencies, and no person-to-person spread has been identified.
However, public health experts said they are worried the virus could mutate and become more transmissible, ABC News reported. As a result of the outbreaks, dairy and egg prices have increased and are expected to remain strong in 2025.
Trump to reshape farm policy, from trade to immigration
President-elect Donald Trump has an ambitious agenda that he says will begin on “day one” of his second term. Experts say that many of his proposals, including higher tariffs and a crackdown on immigration, could deepen many of the economic challenges already faced by farmers.
Trump has threatened a blanket 60% tariff on goods from China, the world’s top agricultural buyer, in addition to 10% to 20% duties on imports from other countries including established trading partners. Experts worry the moves could spark retaliatory tariffs and escalate into a global trade war that would raise consumer food prices and reduce demand for U.S. agricultural products.
Retaliatory tariffs during the first trade war led to $27 billion in lost exports for U.S. agricultural producers between 2018 and 2019, according to a USDA report, with soy and pork producers seeing the biggest decline in market share. As the U.S. continues to be a net importer of food, retaliatory tariffs could also lead to higher prices at the grocery store.
“The interplay of ongoing inflationary pressures and potential trade disputes, particularly with Mexico and Canada, is likely to keep food prices volatile in 2025—especially for fresh fruits and vegetables,” said Rob Dongoski, a partner and agribusiness expert at Kearney. “Tariffs could exacerbate affordability challenges for consumers, particularly in lower-income demographics, while reshaping the availability of fresh produce in grocery stores and restaurants.”
Beyond tariffs, Trump has said he would crack down on border crossings and carry out mass deportations. In agriculture, where more than 40% of the workforce is made up of undocumented workers, the clampdown would create new regulatory uncertainty and worsen a labor shortage that has contributed to high food prices and prevented farms from fully harvesting all their crops.
A study from the Peterson Institute estimates there are 8.2 million unauthorized immigrant workers in the U.S. If the Trump administration were to deport 1.3 million, for example, the agriculture sector would lose $19 million in production and see its workforce shrink by 2.5%.
“It is a major shock to the US economy, with substantial disruption across all sectors, especially agriculture,” the report said.
Bailout programs could offset farms’ losses associated with certain policies — during the trade war starting in 2018, for example, the administration doled out some $28 billion to farms to make up for lost markets.
The recent farm bill extension, passed with Trump’s approval, also included $10 billion in economic assistance for producers, which could hint at the possibility of increased subsidies during his second term.
Agtech to emphasize cost efficiency
Despite economic, weather and policy challenges, farmers see opportunities to increase their profits through new technology or production practices that stand to lower costs and grow output.
A McKinsey survey of farms around the world found that most producers in North America are prioritizing new yield-increase products to increase profits, with around 30% saying they’d also try new technology or innovative equipment. Around 75% of North American farmers surveyed said they are using or willing to adopt at least one new digital technology to improve operations, a six percentage point increase from 2022.
After a tough economic year that affected sales of automated sprayers, drones and other precision technologies, the agtech market is expected to continue growing in terms of scale and product offerings.
With margins tight, farmers have held on to older equipment rather than buying the latest tractors with all the bells and whistles. During this time, manufacturers have turned to retrofitted equipment as a more affordable option for farmers looking at upgrades on an as-need basis.
Additionally, innovations in generative AI will increase decision-making and productivity on the farm and become a cornerstone for agricultural companies, Ron Baruchi, CEO of Agmatix, said in a report. Digital twin technology and increased adoption of biosolutions are also expected to drive significant progress in the new year.
“We anticipate even more significant advancements in data-driven agriculture, machine learning, and other innovative solutions allowing us to tackle resource constraints,” Baruchi said.
Shifting farm bill negotiations could impact sustainable agriculture funding
With Trump in the White House and Republicans controlling both houses of Congress, a new farm bill could emerge that looks a bit different from current proposals that currently have lawmakers at a stalemate. One of the most consequential changes could be the loss of $20 billion a year for farmers to transition to more sustainable farming practices.
The U.S. Department of Agriculture has seen record enrollment for its conservation programs, with demand far outpacing available funding. Democrats had hoped to use additional funding under the Inflation Reduction Act to expand opportunities for producers, though that money could be on the chopping block as Trump vows to claw back unspent IRA dollars.
Less public support could slow an expansion of climate-smart agriculture in the U.S., where holistic adoption still remains low. While farms have expressed growing interest in sustainable practices — especially if they promise yield increases or lower costs — most producers see a lack of compensation as a top barrier to adoption.
Government assistance often plays a bigger role in driving adoption than the private sector. A McKinsey study earlier this year on farm sustainability adoption found that 57% of farmers reported participating in a government program, while only 4% were part of an industry sponsored program, which includes the more than 15 carbon programs launched since 2016.
Sustainable agriculture advocates say Congress will need to move quickly on a new farm bill to lock in climate-smart benefits to producers before more cuts could be made.
“Quick work in 2025 is now even more critical,” Mike Lavender, policy director of the National Sustainable Agriculture Coalition, said in a statement. “Amidst a new Congress and new Administration, Congress must get to work on a new farm bill that recoups the conservation investment left on the table.”