The 2024 federal elections will have significant impacts on policies that affect U.S. food and agriculture. With election day in the rear-view mirror, it is important to delve into how the results will likely impact our industry.
Potential Upsides for the Agriculture Industry:
In some cases, we expect policies that will be beneficial to food and agriculture. For example, we expect that Congress will enact tax legislation that will be largely favorable to agricultural businesses and producers.
Potential Downsides for the Agriculture Industry:
In other cases, however, we see significant down-side risk that must recognized and mitigated to the extent possible. Two examples are the risk of a significant global trade war affecting farm inputs and exports and the risk of deportations affecting agriculture sectors that rely on immigrant labor.
Pinion’s Government & Public Affairs advisors examine the recent elections and post-election developments and provide analysis of the four main policy areas of interest to U.S. food and agriculture: tax, trade, labor/immigration, and the farm bill.
2024 Election Outcomes & Developments
With his election, Donald Trump has become the second U.S. president to win non-consecutive terms. Republicans have also won narrow control of both the House and the Senate. The party will now have control of both chambers of Congress for the next two-year cycle. With conservatives also controlling the U.S. Supreme Court, President Trump and the Republican party will have significant latitude to enact a broad range of policies that will affect U.S. food and agriculture.
While some House races are still to be determined, it appears most House Agriculture committee members retained their seats. This includes both vulnerable Democrats and Republicans in swing districts. The election outcomes countered Democratic concerns about a potential rout in rural, agriculture-centric districts.
Current forecasts suggests that the Republicans will hold a 53-47 seat majority in the U.S. Senate and somewhere between an 8-10 seat majority in the U.S. House. Critically, because the Republicans control less than 60 seats in the Senate, they will still be subject to the filibuster rule requiring a 60-vote margin for non-budgetary policy changes. While Republicans could repeal the filibuster, for decades Senators from both parties have kept in place this tool that protects minority views in the Senate.
Congressional Leadership: Likely Favorable for Ag
Election outcomes can lead to changes in policy, regulations, and funding that directly affect industry operations and profitability. Leadership changes in congress and on key congressional committees can alter the legislative agenda on issues such as farm subsidies, food safety, and trade policies. Fortunately, congressional leadership is shaping up to be supportive of traditional agriculture priorities and policy and we largely expect legislation that favors traditional farming practices, robust risk management programs, and tax policies beneficial to agricultural businesses and producers.
Senate Majority Leader
South Dakota Senator John Thune was selected to lead Senate Republicans next term, succeeding Mitch McConnell. Thune is a longtime member of the Senate Agriculture Committee and the Finance Committee, which handles tax and trade policy. Senator Thune’s understanding of the importance of agriculture to South Dakota could help shape Senate priorities. Thune has been critical of the lack of new trade agreements beneficial to agriculture under The Biden administration. He has also expressed skepticism about Trump’s tariff proposals.
Thune has been involved in crafting four farm bills during his time in Congress. Thune has said that another one-year farm bill extension will likely be needed amid the ongoing partisan gridlock over current proposals. It is unclear if the one-year extension will be reconsidered with the GOP winning both chambers of Congress or whether the Senate will now push to pass a farm bill before the end of the year.
Senate Agriculture Committee Leadership
Senate Arkansas Republican John Boozman is on track to become Chair of the Senate Agriculture Committee. Boozman unveiled his farm bill priorities in June, including proposals to significantly expand farm safety net programs and boost crop reference prices. His proposal largely mirrors the Farm, Food, and National Security Act of 2024 – the House’s version of the farm bill approved by the House Agriculture Committee last summer. This legislation is broadly supported by U.S. agriculture.
Senator Amy Klobuchar (D-MN) is expected to take over as the lead Democrat on the Senate Agriculture Committee. The Minnesota senator has sat on the Senate Agriculture Committee since 2007, after she first won her Senate race. Klobuchar has backed bipartisan proposals to expand the farm safety net and invest in ag conservation programs. She is also a staunch advocate for ethanol subsidies and policies supporting sustainable aviation fuel.
Legislators and agriculture lobbyists are optimistic that Klobuchar’s experience as a bipartisan negotiator from a state heavily involved in production agriculture might facilitate progress on the stalled farm bill, especially with the GOP majorities in both chambers of Congress. Klobuchar has expressed interest in getting a new farm bill done before the end of the year, so that it does not drag into 2025.
House Leadership
Since the House of Representatives stayed in Republican control, leadership is expected to remain unchanged, with House Speaker Johnson and Minority Leader Jefferies continuing in their respective roles. We also expect that GT Thompson will continue as Chair of the House Agriculture Committee despite his recent health concerns. We do think there is the possibility that the Democrats will replace their lead on the House Agriculture Committee since Ranking Member David Scott (GA) appears to be of diminishing effectiveness. This change could take place at the start of the new Congress or sometime in the next two years.
Presidential Nominations: Potential Mixed Bag for Ag
The appointment of new cabinet secretaries significantly influence the direction of agricultural policy and practice in the United States. These leaders have the power to help shape legislation, determine funding priorities, and create regulatory frameworks that directly affect the agricultural sector, from small family farms to large agribusinesses.
The agriculture sector relies on stable policy environments to plan their operations and investments effectively. Despite relatively status quo developments in Congress, the new Trump administration is sending mixed signals through its agricultural policy stances and secretary nominations.
Secretary of Agriculture
The Secretary of Agriculture plays a crucial role in supporting America’s farmers by implementing national agriculture policy, overseeing programs aimed at supporting the agriculture industry, and promoting agricultural trade and production.
Trump has picked Brooke Rollins as his Agriculture secretary. While Rollins grew up on a farm, she has less experience in agriculture policy than others who had been on Trump’s shortlist to lead the Department of Agriculture. The Secretary of Agriculture plays a crucial role in supporting America’s farmers by implementing national agriculture policy, overseeing programs aimed at supporting the agriculture industry, and promoting agricultural trade and production.
Rollins served as director of the Office of American Innovation and acting director of the Domestic Policy Council during the first Trump administration. Since her time in the White House, Rollins co-founded and led the America First Policy Institute. Rollins is from Texas and has a degree in agricultural development. The agriculture secretary is anticipated to play a role in Trump’s strategies for comprehensive tariffs, which previously resulted in significant retaliatory duties from both allied nations and competitors, severely impacting the U.S. agriculture sector during his last term.
Administrator of the Environmental Protection Agency
President-elect Trump has nominated former New York congressman Lee Zeldin to lead the Environmental Protection Agency. The EPA is responsible for key oversight of the agriculture industry, including the use of pesticides and other chemicals, pest control methods, fuel use on farms, building construction, waste disposal and implementation of the Renewable Fuels Standard. If confirmed, Zeldin would lead the Republican effort to roll back key climate change regulations enacted by the Biden administration.
Of concern to the renewable fuels industry and corn farmers who supply ethanol, Zeldin has a history of opposing biofuels and the Renewable Fuel Standard. When he served in the U.S. House of Representatives, Zeldin, along with dozens of his House colleagues, signed a letter addressed to then-EPA Administrator Gina McCarthy, requesting a decrease in the renewable volume obligations for 2016.
Secretary of Health and Human Services
One major wild card that could cause upheaval in the food and agriculture sector is President-elect. Trump’s nomination of Robert Kennedy Jr. to lead Department of Health and Human Services. If Kennedy is confirmed by the Senate, he will have direct oversight of huge swaths of the U.S. food and agriculture sector. HHS and its agencies including the Food and Drug Administration oversee drug approvals, food safety, and disease surveillance. In the final weeks of the campaign, Trump embraced Kennedy on the campaign trail, part of what the campaign labeled its “Make America Healthy Again” agenda.
Kennedy blames Americans’ poor health in part on what he sees as a corrupt alliance among the food and drug industries. He has long advocated for banning pesticides, genetically modified crops, seed oils, and food additives, along with getting rid of the Food and Drug Administration. The FDA’s work includes setting nutrition guidance and overseeing food labeling and safety. The agency can also ban food ingredients and make drastic changes to animal feed additives and antibiotics. During his legal career, Kennedy sued pesticide makers, including Monsanto, then the Missouri-based maker of Roundup. Kennedy also once said that American pork producers were more dangerous to American than Osama Bin Laden’s terrorist network.
During his victory speech Trump again referenced RFK Jr. saying, “He wants to do some things, and we’re going to let him go do it.” In announcing the pick, Trump posted on social media, “For too long, Americans have been crushed by the industrial food complex and drug companies who have engaged in deception, misinformation, and disinformation when it comes to Public Health.”
Commerce Secretary
Trump has picked Howard Lutnick, chief executive of the financial services firm Cantor Fitzgerald, as his nominee for Commerce Secretary. Trump said that his pick to run the Commerce Department would also oversee the Office of the U.S. Trade Representative. Lutnick has defended Trump’s plan for across-the-board tariffs.
U.S. Trade Representative
Jamieson Greer has been selected for U.S. Trade Representative. The selection of Greer, a trade attorney who served as USTR chief of staff in Trump’s first term, is seen as a sign the president-elect will continue his aggressive pro-tariff policies.
Policy Forecast: Insight on Tax, Trade, Farm Bill, & Labor
Four major policy areas have the potential to dramatically impact U.S. food and agriculture in the coming years.
1) – Tax Proposals: Current Atmosphere of Educated Guesses and Uncertainty
Current Status: The enactment of the Tax Cuts and Jobs Act (TCJA) in 2017 included provisions largely viewed as positive for the agricultural sector. Many of those provisions, especially those for individuals and households, are set to expire next year.
Budget Reconciliation Expected: Trump has made extending TCJA provisions a core issue. With complete control in Washington, Republicans plan to use the budget reconciliation process to quickly extend the tax cuts passed by Congress in 2017. Budget reconciliation is an expedited process for considering spending bills. Instead of needing 60 votes, a reconciliation bill only needs a simple majority in the Senate.
Potential Corporate Tax Impacts: In addition to extending the TCJA provisions, Trump has called for lowering the corporate tax rate to 20 percent and as low as 15 percent for corporations that make their products in the United States, ending taxes on Social Security benefits, a deduction for auto loan interest, eliminating taxes on overtime pay, and exempting tips from income tax. He has also suggested eliminating the $10,000 cap on the State and Local Tax deduction, a cap he signed into law through the Tax Cuts and Jobs Act.
R&D Expense Legislation Expected: The Tax Cuts and Jobs Act also includes a provision which requires businesses to amortize research and development (R&D) expenses over a period of five years. This is detrimental to the food, agriculture, and manufacturing industries. Forcing businesses to deduct R&D expenses over several years creates cash-flow problems, substantially higher tax bills, and disincentivizes investment in R&D activities. Last year, the House overwhelmingly passed bipartisan legislation restoring immediate R&D expensing, however the legislation died in the Senate where Senator Mike Crapo’s (R-ID) opposition to the Child Tax Credit derailed the bipartisan bill. With Republicans winning control of the Senate, Crapo is now set to head up the chamber’s influential Finance Committee.
Impacts and Concerns Surrounding Tax Extensions: Some congressional Republicans have expressed concern about government debt and have stated it would be difficult to extend all next year’s expiring Trump cuts without offsetting any of the costs. Overall, Trump’s total agenda has been forecast to increase the national debt by $7.75 trillion through 2035.
However, Senator Crapo has been outspoken in arguing that “pro-growth” tax cuts won’t need to be financed with offsetting tax increases. Additionally, Republicans are at least considering the idea of formally approving expanded tariffs in Congress to help pay for tax cut extensions. Congress has not raised tariffs through legislation in almost 100 years — the Smoot-Hawley Tariff Act of 1930 which worsened the Great Depression. With a narrow GOP majority, just a few members of the House could complicate passage of certain tax provisions.
Indicators of an IRA Repeal Create Drawbacks for Ethanol: In addition to extending and potentially expanding the tax cuts in the TCJA, President Trump has indicated that he wants to repeal the Inflation Reduction Act, including stopping the law’s tax credits and incentives for clean energy. Republicans could try to cover the cost of their tax cuts by rescinding the IRA’s green energy tax breaks. However, some of these tax provisions are extremely beneficial to ethanol producers and some Republicans have urged House Speaker Mike Johnson not to fully repeal the IRA’s clean energy tax credits.
The Treasury Department is currently considering rules for the 45Z Clean Fuel Production Credit, one of the IRA provisions important for the ethanol industry. It is uncertain whether the rules will be finalized before Trump takes office, creating uncertainty and delaying investor investments into new ethanol facilities.
2) – Trade Policy Changes: Potential for Significant Actions Ahead
Global markets are critical for the financial health of U.S. agriculture, with approximately 20% of U.S. farm products being exported. One of Trump’s most consistent policy positions is his support for tariffs.
During his first term, Trump aggressively pursued his trade policies, implementing tariffs on U.S. adversaries and allies alike. This led to retaliatory tariffs from targeted nations with soybean sales to China dropping by almost 79% in the first two years of his presidency. This prompted the administration to implement the Market Facilitation Program which distributed $23 billion in payments to farmers for losses caused by the trade disruptions.
Potential for an Agricultural Trade Shakeup: Donald Trump’s reelection promises another shakeup for agricultural trade and the president has broad authority to levy tariffs without the approval of Congress. In lieu of tax increases, Trump has called for a universal baseline tariff on all US imports of 10 percent to 20 percent and 60 percent tariff on all US imports from China. These tariff levels will likely trigger even more aggressive retaliation and could significantly impact agriculture both in terms of higher input costs and reduced export opportunities.
In 2023, exports to China were the largest share of U.S. agricultural exports. In the aftermath of the trade war during Trump’s first term, foreign purchasers of U.S. agricultural products have pursued other suppliers. Two years ago, China started importing corn from Brazil. The country is now China’s biggest supplier of corn, surpassing the U.S. China now buys the majority of its food and agriculture imports from other countries, particularly Brazil and only purchases about 17% of its needs from the United States.
Negative Impacts of a Retaliatory Tariff: According to a study prepared this year by the National Corn Growers Association and the American Soybean Association, a 60% retaliatory tariff could result in a loss of over 25 million metric tons of U.S. soybean exports to China and nearly 90% of corn exports to China. U.S corn price would drop $0. 13 per bushel and the price of soybean would decline nearly $1 per bushel. Under these circumstances, the U.S. experiences an annual reduction in soybean and corn exports ranging from 2.9 to 4.6 million metric tons, whereas Brazil would see an average annual increase of 8.9 million metric tons in soybean and corn exports. This change could result in a permanent decrease in demand from the U.S.
Threat of an Import Tariff on China: In addition to threatening a 60% tariff on all goods imported from China, President Trump has threatened to place a 10-20% tariff on goods from all other countries that are imported into the United States. If implemented, this across-the-board tariff would raise the cost of farm inputs and cause massive retaliation by other countries, with much of it targeted at U.S. food and agriculture exports.
Manufacturing Impacts of Tariffs: Trump has also expressed his willingness to use tariffs to try to keep American companies from moving manufacturing to other countries. At a farmer-focused roundtable in Pennsylvania in September, he threatened equipment giant John Deere with a 200-percent tariff if it follows through with a plan to move some production to Mexico. Such tariffs would likely violate the terms of the U.S.-Mexico-Canada Agreement (USMCA) negotiated by President Trump in 2019.
Increased Tariffs Raise Concerns for Ag: Key Republican Senate leaders from states with large agriculture industries such as John Thune (R-SD) and John Boozman (R-AR) have expressed concern that agriculture could bear the brunt of likely retaliation for increased tariffs. While some Congressional Republicans may balk at the steep tariffs Trump has proposed and worry about their impact on the economy, Trump could use his executive authority to implement his proposed tariff hikes as he did during his first administration.
Uncertainty for U.S.-Mexico-Canada Agreement (USMCA): In addition to tariffs, 2025 will likely see significant action related to the USMCA which is up for review. In 2020 the USMCA replaced the North America Free Trade Agreement guaranteeing preferential market access for U.S. farm and food products. The U.S., Mexico, and Canada will need to confirm whether to continue the USMCA in 2026. Trump has expressed his intention to renegotiate provisions of the USMCA calling for increased tariffs on cars and equipment manufactured in Mexico. Mexico and Canada are the second and third largest export markets for U.S. food and agricultural exports with total values of $28.2 billion and $27.9 billion respectively.
Possible Trade Play with U.S. Dollar Value: Both Trump and his running mate J.D. Vance have also expressed skepticism about the benefits of a strong dollar. In what would be perhaps the most aggressive trade policy move, Robert Lighthizer, Trump’s former trade chief, has expressed willingness to intentionally devalue the U.S. dollar to urge other countries to modify their currency values to increase U.S. exports. A weaker dollar would make U.S. exports cheaper on the world market but would also dramatically increase consumer prices for imported products.
3) – Farm Bill: Movement Expected, But What Gives?
Current Status: The current farm bill officially expired in September. Congress must pass a farm bill extension or a full update by the end of the year when funds began to run out and programs start to expire. Top Congressional farm bill negotiators, unable to move past disagreements, agreed over the summer to leave a final decision on a new farm bill or another extension until the lame duck session. Passage of a new farm bill has been hindered by contentious debates over the Supplemental Nutrition Assistance Program (SNAP) and conservation programs.
Movement Expected: As previously noted, the House passed their version of the farm bill earlier this year. With the House remaining in GOP hands, this will serve as the basis for the next farm bill. Also as previously noted, Senator John Boozman of Arkansas is in position to take control of the Senate Ag Committee gavel in the next Congress. Boozman’s leadership means Republicans are more likely to successfully limit increases to SNAP and include other GOP priorities in the next farm bill and significantly expand farm safety net programs and boost crop reference prices.
Possible IRA Changes: The Inflation Reduction Act dramatically increased funding for farm bill conservation programs including the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP). Trump has expressed his desire to cut funding for green measures, including those in the Inflation Reduction Act. However, these programs are generally popular among farmers who have been able to secure the funding and given the importance of rural voters there might be reluctance to eliminating funding for all these programs. The House version of the farm bill incorporates conservation funding from the Inflation Reduction Act but removes the mandate that funding be directed to IRA’s climate-smart agriculture practices guardrails.
4) – Labor/Workforce: All Eyes on the Fate of H-1B and H-2A Visas
American agriculture depends on legal immigrants for its workforce.
H-2A Today: The H-2A visa program provides a legal means to bring foreign-born workers to the United States to perform seasonal farm labor on a temporary basis, for a period of up to 10 months. Due to the scarcity of domestic workers, the H-2A program has seen a dramatic increase in usage, from just over 48,000 positions certified in 2005 to around 371,000 in 2022.
ICE Administration Change: Trump has pledged the largest mass deportation in U.S. history. During his first term, federal agents carried out large raids on poultry processing plants and dairy farms. Trump has selected Tom Homan, a former border patrol agent who served as acting administrator of Immigration and Customs Enforcement (ICE) during his first administration, as White House border czar. Homan has said ICE would resume raiding work sites to carry out Trump’s plan for mass deportations. These raids and mass deportation could heavily impact the U.S. dairy, meat processing, and produce sectors each of which rely heavily on immigrant labor.
Potential Program Changes Ahead: In his first term, Trump showed a willingness to limit legal immigration. Denial of H-1B visas, which are given to high-skilled, in-demand jobs in the U.S., more than doubled. During his second term, H-2A visas could also be a target. Project 2025, a policy proposal by the conservative Heritage Foundation, said the next Republican administration would cap and phase down the H-2A program. When Project 2025 received negative press, Trump disavowed it but many of the Project’s authors were in his first administration and staunch immigration opponent and long-time Trump immigration advisor Stephen Miller helped advise Project 2025. Trump has selected Miller to serve as White House deputy chief of staff for policy.
Looking Forward: How to Navigate in Times of Uncertainty
Predictable and sensible public policies are crucial for the food and agriculture sector and essential for growth, financial stability, profitability, and strategic business planning. Some of what we have seen post-election, such as prospects for tax legislation, could be a substantial win for U.S. food and agriculture.
Other developments, such as potential trade wars and some of President Trump’s cabinet positions have the potential to significantly disrupt U.S. agriculture and be detrimental to the food and beverage industry.
Action Items:
Stay informed. Staying informed about these changes enables stakeholders to better navigate challenges and capitalize on opportunities presented by new governmental priorities and initiatives.
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Shape Ag policy with a proactive voice. As policies and legislation are proposed and advanced in the coming months, the agriculture community must remain proactive in communicating the industry’s needs and challenges to policymakers.
- Engage with new members of Congress and the incoming administration will be essential for ensuring the health of U.S. food and agriculture.
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Learn about what other U.S. producers are asking: Pinion’s government and public affairs director, Brian Kuehl, recently held a live webinar overview of tax, trade, immigration/labor, and farm bill policy – fielding questions that are top of mind for producers and processors right now (inquiries on tax specifics and the trade/tariffs outlook, to farm act payments, DOGE, MFP payments, and how to stretch dollars in ‘bleak’ times).
- Watch the 45-minute recording here: Understanding the Impact of the 2024 Elections on the Food and Agriculture Sector
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Subscribe to receive regular updates via Pinion’s ‘AgInsider Business’ eNewsletter on the latest changes, impacts, and opportunities for food and agriculture.
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Reach out to a Pinion food and agriculture business advisor with any questions or concerns regarding potential changes and actions for your business.
