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Doud: U.S. ag must embrace industrial policy, global trade reality... Gregg Doud, President and CEO of the National Milk Producers Federation and former U.S. Chief Ag Negotiator, offered a wide-ranging analysis of the Trump administration’s evolving tariff strategy, the economic dynamics shaping U.S./China relations and a bold vision for the future of American agriculture at the Crop Insurance Professional Association (CIPA) meeting in Kansas City.
According to Doud, President Donald Trump’s core trade philosophy is rooted in a disdain for the modern disposable economy. “Trump hates that you buy a washing machine from China and throw it out when it breaks. He wants Americans to buy durable U.S.-made goods and repair them — simple as that.” He said Trump is pursuing an industrial policy aimed at reshoring manufacturing and punishing economic models that undercut U.S. production.
Doud debunked the popular misunderstanding that tariffs apply to retail prices. “A 10% tariff on a $30,000 car doesn’t raise the price by $3,000. It applies to the import cost, not the sticker price,” he said. To illustrate, he noted that a 10% tariff on Colombian coffee affects the cost of a single cup by less than one cent. He also argued that in China’s case, the exporter — not the American consumer — is absorbing most of the cost. “They’re not a market economy. Their priorities are employment, industrial dominance, and keeping the economy afloat. That’s why they eat the tariff.”
Reflecting on the 33 negotiating sessions he held for the Phase One China deal, Doud celebrated the agricultural wins achieved but warned that “life is very different five years later.” He painted a bleak picture of China’s economy, pointing to falling real estate values, declining consumer confidence and stagnant hog prices — an especially troubling indicator in a country that holds half of the world’s hogs. On the potential impact of biotech in China, Doud issued a sharp warning: “If China’s corn yields go up by just 10%, they won’t need to import any corn from anyone. That could end the game for us.”
Doud described the EU as a massive, missed opportunity. U.S. ag exports to Europe have been flat at $12 billion for 50 years, while the U.S. imports more than $23 billion in ag products from the EU — $3 billion in dairy alone.
India, he said, is “full of potential” but paralyzed by internal politics. “The government subsidizes half a billion subsistence farmers to keep them out of the cities. That’s why they maintain 100% tariffs on agricultural imports.”
Turning to the dairy industry, Doud showcased a bullish trend: over $10 billion in new U.S. dairy processing investments through 2026. “Name another commodity anywhere in the world seeing this kind of investment,” he challenged. “The world knows the U.S. is where protein production can grow.” With exports now accounting for nearly 18% of U.S. dairy, Doud called it a “quiet revolution,” driven in part by social media-fueled trends like surging cottage cheese and butter consumption. “The TikTok effect is real,” he said.
Doud emphasized that U.S. agriculture’s top three issues are “labor, labor and labor.” He also pointed to water scarcity, especially in regions like the Texas Panhandle, warning producers to “quit growing corn and import it — use your water for forage if you want to survive.”
In parallel, he stressed the urgency of aligning federal regulation with ag innovation. “We’re way behind on biotech animal traits. If we can’t commercialize new technologies, we lose our competitive edge.”
In a compelling exchange about global competitiveness, Doud said America’s two biggest advantages are access to capital and robust futures markets. “We’re the world’s residual supplier because we have a futures market that rewards storing grain. No one else does.”
In closing, Doud invoked a map showing the shift in global trade allegiance — from countries that once counted the U.S. as their top trade partner to now favoring China. “Donald Trump was the first to introduce this slide. It explains why we’re doing what we’re doing.”
He concluded with a call to action: “Tariffs aren’t the end goal — they’re a tool. What matters most is that we get our industrial policy, our regulatory system and our tax code right. That’s how we keep U.S. agriculture globally competitive.”
Drought footprint shrinks for winter wheat, spring crops... As of April 29, the Drought Monitor showed 56% of the U.S. was covered by abnormal dryness/drought, down three percentage points from the previous week. USDA estimated D1-D4 drought conditions covered 23% of the U.S. winter wheat crop (down 10 points), 20% of corn area (down six points), 15% of soybeans (down six points), 37% of spring wheat (down 12 points) and 21% of cotton production areas (unchanged).
Across major corn, soybean, wheat and cotton states, dryness/drought covered 50% of Iowa (no D3 or D4), 33% of Illinois (no D3 or D4), 14% of Indiana (no D3 or D4), 75% of Minnesota (no D3 or D4), 98% of Nebraska (6% D3, no D4), 100% of South Dakota (3% D3, no D4), 69% of North Dakota (4% D3, no D4), 80% of Kansas (no D3 or D4), 61% of Colorado (4% D3, no D4), 64% of Texas (26% D3 or D4), 33% of Oklahoma (no D3 or D4), 7% of Tennessee (no D3 or D4), 32% of Wisconsin (no D3 or D4) and 21% of Michigan (no D3 or D4). No measurable dryness/drought was reported for Ohio, Kentucky or Arkansas.
The Seasonal Drought Outlook calls for drought to persist or develop across much of the northern/western Corn Belt and Northern Plains through July. Drought conditions are expected to improve or disappear for most areas in the Southern Plains. Aside from far northern Illinois and far southern Wisconsin, most of the eastern Corn Belt will be drought-free.
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March soybean crush a little stronger than expected... U.S. processors crushed 206.6 million bu. of soybeans during March, which was just above expectations of 205.9 million bushels. Crush increased 17 million bu. (9.0%) from February and was 3.1 million bu. (1.5%) above last year. Through the first seven months of 2024-25, soybean crush totaled 1.438 billion bu., 4.8% above the same period last year. To reach USDA’s forecast of 2.420 billion bu., crush needs to run 7.4% above year-ago for the final five months of the marketing year.
Corn-for-ethanol use slower than expected... Corn-for-ethanol use totaled 454.2 million bu. in March, 5.7 million bu. less than expected. Corn consumed for ethanol increased 33 million bu. (7.8%) from last year but declined 17.9 million bu. (3.8%) from last year. Corn-for-ethanol use through the first seven months of 2024-25 totaled 3.209 billion bu., up 0.6% from last year. To reach USDA’s forecast of 5.500 billion bu., usage must run just 0.1% above the final five months of last year.
GOP weighs SNAP overhaul as House Ag struggles to find $230 billion in cuts... House Ag Republicans are still debating how to meet the $230 billion spending cut target for the GOP’s budget bill, with proposed changes to the Supplemental Nutrition Assistance Program (SNAP) emerging as a key area of focus. The Congressional Budget Office (CBO) estimates capping future Thrifty Food Plan updates would be $36 billion in projected savings and reforming work requirement waivers (raising exemption age) would be $51 billion in projected savings.
A final CBO estimate is pending, including potential savings from a proposal to have states cover up to 25% of SNAP costs — a controversial move raising concerns among both red-state governors and the White House.
House Ag Chair Glenn “GT” Thompson (R-Pa.) has said cutting current SNAP benefits is off the table. Senate Ag Chair John Boozman (R-Ark.) warned of “unintended consequences” if cost-sharing is imposed on states.
Of note: A detailed internal GOP memo outlining all possible cuts is still being drafted after a closed-door meeting this week.
RFK Jr. accelerates overhaul of U.S. dietary guidelines... Health and Human Services Secretary Robert F. Kennedy Jr. announced plans to release simplified, consumer-focused federal dietary guidelines by late summer or early fall 2025, months ahead of the statutory deadline. Kennedy sharply criticized the current guidelines as “unreadable” and industry-driven, pledging reforms that prioritize whole, minimally processed foods and remove harmful additives from the food supply. Key policy shifts include:
- Streamlined guidelines: A user-friendly document replacing the current 400+ page version.
- Crackdown on ultra-processed foods: Public education, removal from schools and bans on petroleum-based food dyes within two years.
- Conflict-free advisory panels: A push to eliminate corporate influence over dietary recommendations.
- SNAP restrictions: Advocacy for state waivers to block soda purchases with federal food aid, backed publicly by USDA Secretary Brooke Rollins.
- Farm subsidy realignment: Reforms to redirect subsidies away from pesticide-reliant agriculture toward healthier food systems, with potential agency cuts if reforms stall.
Kennedy is positioning food policy as a cornerstone of public health reform and a battleground against corporate influence.
U.S. manufacturing slips deeper into contraction in April... The ISM manufacturing purchasing managers index (PMI) for the U.S. slipped to 48.7 in April, marking the second straight month of contraction. Output shrank more sharply, prices rose further and new export orders fell more steeply amid ongoing tariff-related disruptions, though new orders declined at a slower pace. The ISM survey also revealed U.S. manufacturers grappled with rising costs and margin pressure, while ongoing trade uncertainty disrupted supply chains, causing shipping delays, complex duties and frequent changes in cost structures. At the same time, they said customer demand was becoming more volatile, with some clients delaying orders or pushing tariff costs back onto manufacturers.