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Trump, Carney strike cordial but tense tone in first meeting... President Donald Trump welcomed newly elected Canadian Prime Minister Mark Carney for their first official meeting. The two leaders showcased personal warmth but signaled major friction ahead over trade, tariffs and the future of U.S./Canada economic relations. While Carney thanked Trump for his hospitality and “transformational leadership,” he pushed back firmly on the president’s suggestion that Canada should become the 51st U.S. state. Trump, in turn, maintained his view that “there would be a lot of advantages” to such a union, including “a massive tax cut for Canadian citizens” and “free military.”
Trump made clear that tariffs on Canadian steel, aluminum and autos are not coming off anytime soon. Carney acknowledged the challenges ahead and emphasized a mutual reliance, particularly in automotive manufacturing. “Fifty percent of a car that comes from Canada is American,” he noted. “That’s not like anywhere else in the world.”
Carney confirmed the U.S.-Mexico-Canada Agreement would be “a basis for a broader negotiation,” acknowledging that aspects “are going to have to change.” Trump said the U.S. might not need a new trade deal at all: “We can sign 25 deals right now… but we don’t have to sign deals. They have to sign deals with us. They want a piece of our market. We don’t want a piece of their market.”
Asked what the top concession he wanted from Canada was, Trump replied simply: “Friendship.” But he also said the U.S. was “subsidizing Canada” and questioned “why are we taking your cars… why are we taking your steel? It’s hard to justify subsidizing Canada to the tune of maybe $200 billion a year,” Trump claimed.
Carney, in his final answer, made clear that Canada’s position on sovereignty was non-negotiable. “Canadians’ view on this… is not going to change,” Carney said, referencing the 51st state suggestion. “There are much bigger forces involved… and this will take some time.”
Rollins signals USDA overhaul, commits to aid and bipartisan farm bill work... USDA Secretary Brooke Rollins testified before the Senate Appropriations Committee today, outlining a forward-looking vision for USDA and addressing pressing issues affecting rural America.
Calling for the department to be “both reformed and reimagined,” Rollins emphasized her commitment to modernizing USDA operations to better serve American farmers and ranchers in a rapidly changing environment.
Rollins reassured lawmakers USDA has “no plans” to close any Farm Service Agency (FSA) offices, a major concern for rural communities that rely heavily on those facilities. “It is not in our plan,” she said, emphasizing the importance of maintaining local USDA access across the country. Rollins said USDA is working to rehire some staff, primarily in FSA, Animal and Plant Health Inspection Service and wildfire response offices.
Acknowledging the strain of ongoing trade tensions, Rollins pledged swift USDA action if farmers are targeted by retaliatory tariffs stemming from President Trump’s trade policies. She also committed to expediting distribution of $10 billion in newly approved economic aid for commodity producers. Several senators pressed Secretary Rollins for an update on the nearly $21 billion in weather-related disaster assistance approved by Congress Dec. 21 as part of a supplemental aid package. Rollins responded that USDA is just days away from unveiling the application process for producers to access the funds. She added that the department aims to begin distributing the aid swiftly — ideally by the end of May.
Rollins urged Congress to move quickly on a new five-year farm bill, vowing to work with both Democrats and Republicans to deliver legislation that supports the agricultural sector: “We are ready to work across the aisle to get this done.”
While reiterating her support for President Trump’s strict immigration policies, including mass deportations and increased border enforcement, Rollins expressed openness to reforming the H-2A migrant farmworker visa program in coordination with Congress and the Department of Labor to address labor shortages in agriculture.
Another ag trade deficit in March... U.S. agricultural exports increased to $16.06 billion in March, while imports jumped to $20.62 billion, producing an ag trade deficit of $4.56 billion. That was up from a deficit of $4.27 billion the previous month. This marked the 17th month of the past 18 in which agricultural trade posted red ink. Through the first six months of fiscal year (FY) 2025, the U.S. has racked up an ag trade deficit of $20.77 billion, with $93.65 billion in exports and $114.42 billion of imports. USDA forecasts ag exports at $170.5 billion and imports at a record $219.5 billion for FY 2025, which would be a record $49 billion deficit.
The U.S. will have a record trade deficit in FY 2025, though as new trade policies and tariffs take effect, the actual outcome remains uncertain.
U.S. trade deficit surges to record in March... The U.S. trade deficit widened to a record $140.5 billion in March. Imports jumped 4.4% to an all-time high of $419 billion in anticipation of more tariff announcements. Exports inched up 0.2% to a record $278.5 billion.
Farmer sentiment improves despite tariff concerns... Farmer sentiment improved in April with the Purdue University/CME Group Ag Economy Barometer climbing 8 points (5.7%) to a reading of 148. That was up 49 points (49.5%) from April 2024. The improvement in farmers’ sentiment was bolstered by increases in both the Index of Current Conditions, which rose 9 points to 141, and the Index of Future Expectations, which increased 8 points to 152. This month’s improvement in farmer sentiment occurred despite ongoing trade disputes with many of U.S. agriculture’s largest trading partners. Producers overwhelmingly reported they expect the increased use of tariffs by the U.S. to prove beneficial to the U.S. agricultural economy in the long run.
Although sentiment improved in April, farmers are still concerned the U.S. government’s tariff policy will have a negative impact on farm incomes. Some 56% of respondents to the April survey said they think the U.S. tariff policy will have either a negative or very negative impact on their farm’s income in 2025. In a related question, 53% of producers expect the increase in tariffs on imports to make it more difficult to obtain inputs from their suppliers this year. Producers who expect some difficulty in obtaining inputs pointed to three main areas of concern: fertilizer, parts for farm machinery and electronics and crop chemicals.
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Linking higher reference prices and boost in farm program payment caps... If Title I reference prices in the farm bill are increased significantly, it would be logical to also consider raising the current payment caps for farm program payments. Here’s why:
Why Increasing Payment Caps May Be Logical
- Avoiding unintended constraints: If reference prices are raised but payment caps remain unchanged, more producers could quickly hit the payment limit, especially in years of low market prices. This would blunt the intended benefit of raising reference prices, as the cap would prevent full payment of the increased support.
- Alignment of policy objectives: The purpose of raising reference prices is to enhance the safety net for producers facing lower commodity prices or higher costs. If payment caps are not adjusted accordingly, the policy’s effectiveness is diluted, particularly for larger operations that are more likely to reach the cap.
- Budgetary considerations: Raising both reference prices and payment caps would increase federal outlays for farm programs. This would require policymakers to weigh the benefits of increased support against the budgetary impact and the need for potential offsets elsewhere in the farm bill. However, it would also lessen the need for ad hoc economic aid.
Payment caps primarily affect larger farms and entities with high production levels, as they are more likely to reach or exceed the cap. This can limit the incentive for very large operations to participate fully in farm programs, or prompt them to restructure ownership and management to maximize. Most small and mid-sized farms do not reach payment limits and thus are not directly affected by the caps. For these farms, payment caps do not restrict participation or the level of support they receive.
Payment caps are intended to address equity concerns by preventing the concentration of federal support among the largest producers and ensuring broader distribution of benefits. However, the effectiveness of these caps is debated. Some argue that large operations can use legal entities, partnerships and family members to multiply payment limits, potentially undermining the caps’ intent.
Besides payment caps, income caps (such as the $900,000 adjusted gross income limit) restrict eligibility for payments to those below a certain income threshold. Analysis shows these income caps affect less than 0.5% of farms — since most farms do not exceed these high-income thresholds.
Payment caps exist for farm program payments, such as those made under PLC, ARC and ad hoc disaster relief or economic assistance programs, where limits are typically set at $125,000 or $250,000 depending on the producer’s share of income from farming. However, these caps do not apply to crop insurance premium subsidies, which remain uncapped regardless of farm size or total subsidy received.
ADM posts mixed Q1 results, notes trade headwinds... Archer-Daniels-Midland (ADM) reported mixed first-quarter 2025 results, reflecting challenging macroeconomic conditions. Trade tensions between the U.S. and China, along with other trading partners, are creating headwinds for ADM, which has seen its profit erode in recent quarters due to a slump in global crop prices and weak crop processing margins. Strong performance at its Nutrition unit and lower costs the company’s first-quarter results.
ADM is responding to market challenges through a cost-cutting and consolidation push. ADM said in February it planned to cut costs by $500 million to $750 million over the next three to five years and has been slashing jobs and downsizing operations since then.
EU plans to end Russian gas imports by end of 2027... The European Commission will propose next month a ban on new Russian gas deals by the end of this year, and a ban on imports under existing contracts with Moscow by the end of 2027, according to a draft document seen by Reuters. A draft of the “roadmap,” setting out how the Commission plans to phase out Russian energy, said that in June, it will present a legal proposal to ban remaining Russian gas and LNG imports under existing contracts by end-2027. The commission will also propose in June a ban on imports under new Russian gas import deals and spot contracts by the end of 2025, said the draft, which could still change before it is published. The legal proposals would need approval from the European Parliament and a reinforced majority of EU countries.