As the calendar turns to 2026, the American agricultural sector finds itself at a precarious crossroads, battered by a year of escalating trade tensions and a "Trade War 2.0" that has redefined global commodity flows. Throughout 2025, Senator Jerry Moran (R-Kan.) emerged as one of the most consistent and urgent voices on Capitol Hill, warning that the aggressive use of unilateral tariffs—while intended to bolster domestic industry—has placed a "bullseye" on the backs of U.S. farmers and ranchers.
The immediate implications of these warnings are now visible across the Midwest: commodity prices for staples like corn and soybeans have faced sustained downward pressure, and the U.S. agricultural trade balance has swung into a historic deficit. While the federal government recently moved to stem the bleeding with a $12.5 billion "Farmer Bridge Assistance" (FBA) program in December 2025, Moran’s central thesis remains a haunting prospect for the market: once a global customer is lost to competitors like Brazil or Argentina, they may never come back.
The crisis reached a boiling point in the spring of 2025, following the implementation of broad-based tariffs on a range of international partners. Senator Moran, representing a state that is a global leader in wheat and sorghum production, detailed a "scissors effect" that began to decapitate farm profitability. By April 2025, while input costs for fertilizer and machinery remained stubbornly high due to industrial tariffs, the prices farmers received for their crops plummeted as retaliatory measures from China and Mexico effectively shuttered key export markets.
The timeline leading to this moment was a slow-motion collision. In late 2024, Moran noted that net farm income was already projected to be 27% lower than its 2022 peak. When the "Liberation Day" tariffs were enacted in early 2025, the reaction from global markets was swift. China, formerly the largest buyer of U.S. soybeans, slashed its imports from the United States to near zero by mid-year, pivoting entirely to South American suppliers. By the time Moran testified before the Senate Appropriations Subcommittee in late 2025, he described a grim scene of grain piled high at Kansas elevators with "no place to go," as the U.S. moved toward a staggering $42.5 billion agricultural trade deficit.
Key stakeholders, including the American Soybean Association and the National Association of Wheat Growers, have rallied behind Moran’s warnings. The initial market reaction was one of high volatility; commodity futures in Chicago saw "limit down" days throughout the summer of 2025 as the reality of a prolonged trade standoff set in. The Senator's rhetoric shifted from policy debate to economic survival, culminating in his co-sponsorship of the Trade Review Act of 2025, a bipartisan effort to reclaim Congressional authority over tariff implementation.
The financial fallout of this trade environment has created clear winners and losers among the giants of the "Ag-Stack." John Deere (NYSE: DE) has been among the hardest hit, reporting a 12% decline in full-year 2025 revenue. The company was forced to implement multiple rounds of factory layoffs as farmers, facing diminished liquidity, deferred purchases of large-scale equipment. Management at Deere warned that the "tariff hit" would likely intensify in 2026 as the rising costs of steel and aluminum continue to bake into their manufacturing margins.
Similarly, Archer-Daniels-Midland (NYSE: ADM) faced a grueling year, cutting its adjusted earnings-per-share guidance three times as global "crush margins" collapsed under the weight of trade uncertainty. The company announced it would eliminate approximately 700 jobs—roughly 2% of its workforce—to navigate the commodity downturn. However, some grain processors like Bunge Global SA (NYSE: BG) showed surprising resilience; despite missing revenue targets by over $3 billion in Q3 2025, Bunge’s strategic integration of Viterra allowed it to leverage non-U.S. supply chains, helping it beat profit estimates and even see a "tariff rally" late in the year when domestic oilseed protection measures were proposed.
On the winning side, Corteva (NYSE: CTVA) emerged as a "defensive compounder" for investors. Because Corteva relies heavily on a localized seed production model, it bypassed many of the cross-border tariff risks that plagued equipment and grain traders. The company’s stock reached all-time highs in mid-2025, as its high-tech crop protection products remained essential for farmers trying to maximize yields on every subsidized acre. Meanwhile, industrial giants like Caterpillar (NYSE: CAT) and meat processors like Tyson Foods (NYSE: TSN) have navigated a mixed bag, benefiting from some domestic protections while suffering from the broader cooling of global trade volumes.
The significance of Senator Moran’s warnings extends far beyond the 2025 harvest; it signals a fundamental shift in the American economic consensus. For decades, the U.S. agricultural model was built on the assumption of ever-expanding global markets. Moran’s "Lost Market" analogy—comparing a lost export market to a small town losing its only doctor—suggests that the damage may be structural rather than cyclical. As China and other major buyers formalize long-term supply agreements with Brazil and Canada, the U.S. risks becoming a "residual supplier" rather than a primary partner.
This event fits into a broader trend of "de-globalization" that has dominated the mid-2020s. The regulatory implications are profound, as seen in the push for the Trade Review Act of 2025. If passed, this legislation would represent the most significant reassertion of Congressional trade power in nearly a century, requiring the executive branch to obtain legislative approval for tariffs within 60 days. This shift could end the era of "tariff-by-tweet" or unilateral executive action, providing the "certainty" that Moran argues is the lifeblood of rural economies.
Historically, the current situation draws comparisons to the 1980 grain embargo, which many economists argue permanently damaged U.S. reputation as a reliable supplier. The ripple effects are also being felt by competitors; while U.S. farmers struggle, their counterparts in the Mato Grosso region of Brazil are seeing record investment. This divergence suggests that the "Trade War 2.0" is not just a temporary dispute, but a catalyst for a permanent realignment of the global food supply chain.
Looking ahead to the rest of 2026, the short-term focus will be on the rollout of the $12.5 billion Farmer Bridge Assistance program. While the aid provides a much-needed floor for farm liquidity—offering roughly $44 per acre for corn and $31 for soybeans—it does not address the underlying lack of demand. Strategic pivots are already underway; many U.S. producers are shifting acreage toward specialty crops or crops destined for domestic sustainable aviation fuel (SAF) production to reduce their exposure to international trade whims.
In the long term, the market will watch for whether the U.S. can successfully negotiate a "de-escalation" with its primary trading partners. A potential scenario involves a "Grand Bargain" where tariffs are traded for structural changes in market access, but such an outcome remains elusive as of January 2026. Market opportunities may emerge in the "Ag-Tech" space, as companies that provide efficiency-boosting software or biologicals become even more critical for farmers operating on razor-thin margins. However, the challenge of a generational exodus remains; as Moran cautioned, if young farmers see no path to profitability without government checks, the "brain drain" from rural America could accelerate.
The warnings from Senator Jerry Moran throughout 2025 serve as a stark reminder that trade policy does not exist in a vacuum. While the goal of protecting domestic manufacturing is a central pillar of current policy, the collateral damage to the agricultural sector has been extensive. The key takeaway for the start of 2026 is that "markets, not payments" remains the rallying cry of the American heartland. Federal aid can prevent a wave of bankruptcies in the short term, but it cannot manufacture the global trust required to sustain a multi-billion dollar export industry.
As we move forward, the market will likely remain in a "wait-and-see" mode. Investors should keep a close eye on the progress of the Trade Review Act in the Senate and the Q1 2026 earnings reports from John Deere (NYSE: DE) and Archer-Daniels-Midland (NYSE: ADM) for signs of a demand bottom. The lasting impact of 2025 may well be the realization that in a globalized world, the "weaponization" of trade is a double-edged sword that cuts deepest in the very fields that feed the world.
This content is intended for informational purposes only and is not financial advice.
