Michigan’s farming industry is closely tied to global markets through the export of staples like soybeans, corn, and dairy, along with specialty crops like apples and blueberries.
While tariffs and agriculture aren't strangers, today's environment is unique. Michigan farmers are facing pressure from both domestic and international tariffs, which may continue to increase the cost of supplies or make it more difficult to sell crops. Here’s more on what that may mean for your farm’s business and income.
How Tariffs Affect Michigan Agriculture
Michigan farmers are facing new taxes on supplies from the U.S. government and very high taxes — sometimes as high as 140% — from other countries on the products they sell. These high taxes can make it harder to sell U.S. farm goods to other countries.
A recent report from the Michigan Department of Agriculture and Rural Development (MDARD) shows the effects of current tariffs: exports of key Michigan crops, such as soybean meal and wheat, have dropped by 46% and 89%, respectively. Fresh cherry exports have declined by 62%, while apples fell 58%.[1]
Import tariffs on steel and aluminum are also driving up food packaging costs. The State Department estimates these tariffs could raise expenses for canned food manufacturers by as much as 12%.[1] Other tariffs on essential farming inputs, like potash fertilizer, may also increase costs for agribusinesses.
The Bottom-Line Tariffs Impact on Michigan Farms
Shrinking crop exports may mean reduced revenues for farmers. At the same time, higher input costs could further reduce profit margins as farmers pay more for supplies they need.
With rising input costs and crop surpluses potentially driving prices down, businesses may face financial strain from diminishing profit margins. This may leave agricultural companies with less cash to cover operating costs, equipment financing, unexpected expenses, and other common industry expenses.
Tariffs may also impact farmers in several ways, including:
- Leaving less money for necessary long-term investments, such as barns, irrigation systems, and tractors.
- Making it more difficult to prepare financially for the year ahead due to cost uncertainties and market fluctuations.
- Cutting back on spending, hiring fewer workers, or reducing hours, actions which can ripple through the local economy.
5 Strategies for Navigating Tariff Uncertainty
Business leaders and farmers may not be able to control trade policy, but these five strategies may help soften the tariffs' impact on Michigan farmers.
- Diversify markets by seeking buyers in regions less affected by tariffs.
- Stress-test cash flow using different pricing scenarios, either through forecasting tools or working with a local banker.
- Monitor tariff developments and adjust purchasing decisions and timing as needed.
- Reduce costs by operating more efficiently—such as buying in bulk or sharing resources like equipment with nearby farms.
- Stay connected with organizations like the Michigan Farm Bureau or Michigan Agri-Business Association for timely updates on trade policies.
Tariffs and Agriculture: Moving Forward
For now, tariffs are likely to shape Michigan’s agriculture in both expected and unexpected ways. Agricultural business leaders can prepare by building flexibility into their financial plans. Open conversations with local lenders and financial advisors can help businesses remain resilient in uncertain trade environments.
To learn more about financial tools that can help Michigan farms manage market swings, visit Northstar Bank’s agricultural banking resources or speak with one of our lenders.
Loans are subject to credit approval.
