If Farmers have the money to pre buy diesel and fertilizer, and stockpile them somewhere on their property, then I think we need to completely rethink any "making them whole" that the Trump administration has said regarding tariffs. They are pretty rich so they don't need the help.
Since your wife’s family is so intimate with farming I figured you would know how this works.
Even smaller grain farms are multi-million dollar businesses. Their largest costs are land and inputs. Farmers are price takers, not price makers. If fertilizer and chem goes up, they don’t get to ask Cargill or ADM to give them an extra dollar a bushel to make up for it. They have to sell it at what the market is willing to pay for it. So one of the biggest controllable profitability factors for them is keeping input costs as low as possible.
There are several mechanisms to make this happen:
Traditionally speaking, most input suppliers offer aggressive cash discounts for orders placed and paid for in the fall. Seed, fertilizer, etc. Our company, for instance, offers a 15% cash discount if paid by Nov 15, and three different 0% financing options that take the payment date out to December 2026 or January 2027.
Sure, some big affluent farms will stroke a check in the fall with no problem. But most will put these on their operating line of credit or on vendor financing because the discount more than offsets the cost of the carrying interest.
Another mechanism is that a lot of ag retailers (Growmark, etc) offer bundle discounts for seed/chem/fuel wherein farmers can purchase their entire input package at a bundled discount, with generous carrying terms or cash discounts.
Most farmers had the majority of their input decisions for the 2027 crop year made before the calendar even flipped to 2026. I would admit that more farmers than normal have been waiting to make those decisions the last few years because of tax concerns—they had plenty of expenses against income so they are waiting to put more of their expenses in the coming tax year, so they book after Jan 1.
I don’t know how many times I have heard the line, “I’m glad I priced all my fuel this winter when it was dirt cheap” the last 40 days, but it’s a lot. Successful farmers are educated businessmen, not hayseeds just going with the flow.
No good businessman is going to just sit around and expose themselves to the risk of spot pricing one of their key inputs all spring. They have all this shit locked down well in advance so they can calculate a marketing plan to reward the CBOT when the price of their crops exceeds their cost of production.
These random nameless faceless farmers that these biased social media posts are clearly hobby farmers that aren’t doing it for a living or for a family legacy. They work a job in town, the farm is secondary, and they aren’t hedging their costs in a way that gives them the best chance to make a profit. And, coincidentally, that are the very type of farmer that is getting by on subsidies, which you hate.
So yeah, go ahead and pull the subsidies. Wanna know what happens next? Rampant, uncontrolled consolidation of American farms. The rich will get richer and every state will be farmed by a handful of giant corporate farms like Dowsons in central Illinois. (our largest customer)
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