Mexico is in the top 3 markets of soy products, while Canada is in the top 10 markets of soybeans.
“They (Mexico) have a big crash industry, they get a lot of soybeans from us, and they import a lot of food and a little oil,” Sutter said.
Mexico has not detailed how it will retaliate against US products, but Sutter said the country's response will be closely monitored. Sutter noted that most of the soy and dietary products can help feed the Mexican animal protein industry. Retaliatory tariffs will raise consumer prices.
“If they put tariffs on those products, the prices will rise,” Sutter said. “So what do you do to the value of chicken or pork or something like that?
“I'm a mental optimist and I'd like to think somewhere to avoid these kinds of situations, whether it's a Zoom call or a face-to-face meeting between people in Mexico and the US,” Sutter said.
Johann “Kip” Aidberg is Senior Vice President of Government and Industry for the Equipment Manufacturers Association, and spoke after the AEM press conference. Given the tight farm margins and low product harvest value, AEM is forecasting a bearish outlook for 2025. After several years of growth, the demand for high-horsepower tractors eased, and manufacturers reported reduced production, continued downsizing of the workforce and capital expenditure. Tractor inventory is approaching the historic heights of dealer lots.
When asked about AEM's view on tariffs, Eideberg did not pull the punch.
“They are taxes. They are taxes on American businesses, American farmers, American workers. They are competitive in the global market. They are inflation and can drive inflation. So they are bad for equipment makers, farmers again.
While President Trump likes to emphasize the trade deficit, US equipment manufacturers have a trade surplus with Canada. The US imports around $3.5 billion while exporting about $10 billion in agricultural machinery from farm machines north of the border. Canada is the largest market for equipment manufacturing. The tariffs will affect the company's revenue, expansion and the employment plans of equipment companies, Eideberg said.
“Manufacturers always try to absorb most of the cost increase, but some are handed over to customers. This is not a big news for farmers and ranchers given the headwinds they've faced recently,” Ideberg said.
Growth Energy CEO Emily Skor, like others like the National Corn Growers Association, has promoted E15 legislation in Classic, but said he is currently focusing on trade and tariffs. Last year, Canada purchased more than $1.4 billion from its US ethanol factory.
“This is the number one trading partner for over 600 million gallons of ethanol we sent last year,” Squall said. She added, “We don't want to be caught up in the intersection.”
The White House also pointed out that its criticism of Brazil's 18% tariffs on US ethanol and squall is an example of the tariff disparity the ethanol industry wants to fix.
“But we have a free trade relationship with Canada and it's working well now, and we want to continue,” Squall said.
Speaking about Trump's social media posts about farmers selling their products domestically, Squall said, “Well, OK, we want to consume more farming in the US, so let's sell more e15s. That's my answer.”
Shutdowns could link aid payments
Agriculture Secretary Brook Rollins on Sunday emphasized that $10 billion in economic aid would come to growers under the new Emergency Products Assistance Program (ECAP). Rollins said he hopes the application will be made public in early March and that the program will be ready by March 21st.
On Monday, USDA officials warned that these aid checks could be caught up in the possibility of government shutdowns. Currently, Congress will pass a bill that will continue to run the government, facing the deadline of March 14th. Lawmakers often waited until the end to mediate a one-year funding agreement or ongoing resolution, or CR transactions.
Asked about more details about ECAP, Steve Peterson, senior advisor to the Farm Production Protection (FPAC) mission area, said he thought $10 billion would come a long way to support producers, but Peterson warned that those checks could be postponed if government closures were to occur.
“The only thing I want to be transparent is that we know that our funds will only run until March 14th, so if there is a delay to extend another CR to fund the government, the only thing I'm seeing is hiccups between these agencies and the USDA,” Peterson said. “We want them to pass on the full budget, but if it doesn't happen and the government shuts down, it's at a disadvantage — I want to be very upfront — which will negatively affect our ability to provide that support on time.”
Peterson was answering questions from John McClure, a wheat, corn, soy and sorghum farmer from Stafford, Kansas. McClure hopes the USDA will provide details of $20.78 billion in disaster aid. McClure said his area in southern Kansas is in the fourth year of drought. “We're hanging in the thread now,” McClure said. He added, “Don't delay it, everything is important.”
The USDA has not yet detailed how disaster funding will split, but the law passed in Congress has set aside $2 billion, particularly for livestock. It could remain around $18 billion to split up for farmers who lost their crops during the 2023 and 2024 disasters. That means that payment factors are likely to be needed to determine how to balance payments to farmers.
Chief Greg Horstmeier's DTN editor contributed to this report.
Also, “AG Secretary: $10 billion in financial aid, ECAP application, should arrive soon” https://www.dtnpf.com/>
Chris Clayton can be contacted at chris.clayton@dtn.com
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