New Tariffs Are Squeezing American Farmers

American farmers are bracing for a double hit — rising costs on the supplies they need to operate, and shrinking markets for the products they grow.

New tariffs exchanged between the U.S. and Canada have put farmers squarely in the crossfire,

Leaving them feeling the pressure on both ends of their business: what they pay for inputs and what they can earn from their crops.

A Deeply Tangled Supply Chain

The economic relationship between American farmers and Canada is more interwoven than most people realize. Canada purchased $28 billion in U.S. agricultural goods last year, making it the second largest export market for American farm products. Dairy, soybeans, corn, and ethanol all flow north in significant quantities.

At the same time, Canada supplies materials that American farmers depend on — including steel, aluminum, and agricultural equipment components. Those materials often cross the border multiple times as they move through the supply chain, meaning a tariff can hit the same component more than once before a piece of equipment reaches a farm — quietly driving up costs even when farmers aren't buying imported goods directly.

The result: higher prices going out, lower prices coming in.

Dairy Farms Already Under Pressure

For dairy producers, the timing couldn't be worse. The U.S. dairy market has already been navigating a prolonged price slump, and new trade barriers threaten to make it worse.

Dairy supply chains between the two countries are deeply interconnected — everything from finished cheeses to processing ingredients like whey moves across the border regularly. If those sales slow or stop, the domestic market won't be able to absorb the surplus, and prices will fall further.

Many dairy farmers have already been supplementing income by raising beef cattle just to weather the period of weak milk prices. The industry needs to expand exports — not lose them — to turn things around.

Above all, producers say what they need most is predictability. "Stability provides certainty to businesses and industry to know where things are at and know that there's a sure plan on where things are going."

The Fertilizer Problem

Beyond dairy, crop farmers are watching something else closely: potash.

Potash is a potassium-based fertilizer that is essential to growing corn, soybeans, and many other staple crops — and roughly 85% of the potash used in the United States comes from Canada, which is the world's largest producer and exporter.

Any disruption to that supply would land on top of nitrogen fertilizer costs that are already elevated due to instability in global energy markets primarily from the conflict in Iran — compounding the squeeze at exactly the wrong time.

Uncertainty Is Its Own Cost

Even before any new tariff formally takes effect, the instability itself is already shaping decisions on the ground.

Farmers are delaying equipment purchases, sizing operating loans more conservatively, and pulling back on input spending as they try to plan for a spring planting season they can't yet predict.