Dr. Tim Boring: These overlying fundamentals here really that were a piece of that report to the governor are still absolutely in effect here. And so, we're still going through and looking at what the specific trade impact numbers might be. But in terms of these general trends, we continue to be existing in an environment here where there's a lot of unpredictability. There's chaos in our international trading relationships here. And we're seeing in real time that some of these established trading relationships with their largest trading partners, China, Canada, Mexico, those continue to be fraught with a lot of questions here of what the stability of those relationships might be.
Here in Michigan, we do a lot of trade with Canada and Mexico. You know, those soybean markets are really important for producers all across the state and the country. But for a lot of the products we have in Michigan here, they're going to go to those neighboring countries through longstanding agreements and relationship-based trade patterns.
So we continue to track, you know, the anecdotal reports of the fact that, you know, the Mexicans perhaps, while they still recognize that the black beans grown here in Michigan are of premium quality, they're really reliable, they know they're getting good product for that, but perhaps they should be looking to source those beans from Brazil or other countries to their south. Quality might not be quite as good, but it perhaps is a more stable trading relationship into the future. There's some certainty here of what tariff levels might be for those other products coming into countries.
So that example really, I think exemplifies a lot of what we're seeing right now of those longstanding trading relationships developed in a lot of partnership with Michigan businesses here. They're suffering from some unpredictability and the continued sense that the United States isn't really a reliable trading partner. And we're seeing a lot of other countries come into these global marketplaces looking to take over that market share from the United States. And that's really concerning long-term for the future of Michigan agriculture.
Patrick Center: Looking at this report, can we drill down into some of the uncertainties and the inputs that farmers are dealing with?
Dr. Tim Boring: Well, there's a lot of different impacts to this going on, certainly. And we can look at a lot of those different individual markets, and those are evolving in real time here. So even over the last couple of weeks, we're tracking some of the developments of the United States agreements with China and what China is looking to do to purchase soybeans at a level at least approaching what they have historically purchased. We've seen the last several days, there's some commitments to buy additional soybeans. So, you know, there's cautious optimism around those sorts of situations. And I think it really underscores just how quickly and the dynamic nature of a lot of these relationships.
But we're also going to look at on a broader level beyond the snapshot in time of these numbers and what are these fundamental conditions that continue to drive trade into the future. We are seeing the results of first Trump administration, where we incentivize the production of commodities in different areas of the world. And we're seeing the effects of that in a lot of ways today, that the Chinese have been in a position to not buy American soybeans because of investments they've made over the last few years into building out those Brazilian and Argentine soybean markets. And those are lessons that they learned during the first Trump administration that they should not put themselves in position where they're reliant on the United States production. China will make investments in other countries, they'll establish other trading relationships, and those are going to be market forces then that are driving behaviors here into the future. So, soybeans have gotten a lot of national attention, but in a place like Michigan, we're seeing a lot of the impacts in a lot of other smaller minor crops as well, as we look to really quickly remake some of what these global trade flows of Michigan products look like.
Patrick Center: The short term and the long-term impacts and where Michigan farmers stand?
Dr. Tim Boring: Short term impacts here, growers right now are making decisions around what to plant for 2026. They're working with banks to secure funding or purchasing inputs of fertilizer and seed. A lot of those decisions are being made right now and there's a lot of uncertainty then around what markets might look like.
Market forces would tell you perhaps to plant fewer soybeans and more corn, but all these markets work in concert with one another. So faced with the prospect of record planted corn acreage across the country into 2026, that's obviously going to depress the prices of corn then. And it's another additional pressure here on growers.
In a state like Michigan, where we have a lot of permanent crops, tree crops, bush crops, things like blueberries, asparagus, cherries, apples, those aren't planted on an annual basis. So, the production levels we have are largely the production levels we have. And there's a lot of concern there about what those markets are going to look like into the future. And those kinds of crops growers have to forecast, you know, on a decade’s level basis here of what returns might look like. And when we've got such unpredictability in the market, it's a lot harder to make those kinds of investments to be able to ramp up production over the long haul here.
So for a lot of the different commodities we grow in Michigan, whether it's row crops or fruit and vegetables, you know, balance sheets aren't penciling out positive for either 2025 or 2026. It's stifling a lot of investment and innovation that we need to continue to position Michigan for success. And there's a lot of concern out there of have we altered some of these trade flows with our tariff policies in a way that for the medium term perhaps, five years or so, what are those market outlooks going to mean for farmers?
Patrick Center: You mentioned the midterm outlook, still a difficult time. I would imagine that there are some farmers who are teetering right now.
Dr. Tim Boring: There's a confluence of factors really affecting agriculture in Michigan today. Input costs have continued to rise, machinery costs remain stubbornly high, land prices are high, the value of a lot of our commodities has fallen, the price that farmers receive for those crops. And so, there's a combination of factors that are combining for a pretty bleak economic outlook for a lot of producers right now. And certainly that's a gradient. There are producers who are probably going to be in a position to eke out some marginal uh revenue here in the next year. But for a lot of producers that have made substantial investments into operations, there's concern there about how things pencil out. So, the tariff aspect to this and international trade is certainly one fundamental piece that's been putting some downward pressure on a lot of these markets. The world, in a lot of ways, it's a washing grain today and we've got a lot more supply than what those demand levels would match up to be. So, it's really concerning in a lot of places.
There's concern about on a Michigan level here of the susceptibility of some of our different crops and perhaps fundamentally altering what production levels, processing, and those fundamental pieces of rural economies, what they look like in the years ahead here. So, the overall picture here for agriculture is not particularly positive right now.
On a state level here, we're continuing to really double down on building local and regional food systems that are working to address these needs we see in so many different areas here of, you know, those investments in communities result in healthier people, healthier economies and opportunities to pursue the American dream for people. There's a lot of opportunities for agriculture across the state here. And those are issues and opportunities we're really looking to build on here on a smaller level. But these headwinds that we continue to see on a broader national and global level are concerning. And for some crops and some farmers, we're into a position where they're facing pretty significant bleak outlooks ahead.
Patrick Center: Dr. Tim Boring, Director, Michigan Department of Agriculture and Rural Development. Thank you so much.
Dr. Tim Boring: Thanks so much. Thank you.
* This interview was conducted prior to the Trump Administration announcing $12 Billion Farmer Bridge Payments.