Post-election perspectives on agriculture: 5 key areas to watch
Going into 2025, the agriculture industry faces a complex landscape of workforce challenges, technological opportunities and policy shifts. It can be expected that President Trump will have a significant influence on all of these. Here are the top five potential impacts:
1. Deregulation
The Trump administration is likely to push for deregulation in the agricultural sector, aiming to reduce federal oversight on farming practices. This could include relaxing environmental restrictions and streamlining approval processes for genetically modified crops and pesticides. While this might lower costs and increase efficiency for large-scale producers, it could also raise concerns about environmental sustainability and the marginalization of small farmers.
2. Trade policies
Trump’s focus on renegotiating trade deals to favor U.S. exports could open new markets for American agricultural products. However, this approach might also lead to trade tensions and tariffs, which could impact the global competitiveness of U.S. farmers.
While it’s yet to be seen how trade policies and tariffs will be implemented under a new administration, tariff structure changes could affect both domestic production costs and international competitiveness.
Stringent trade policy will likely heighten geopolitical issues. The incoming administration may impose tariffs as early as day one, so the agricultural community must watch closely and start planning for the change.
Last, but certainly not least, the expiring provisions of the Tax Cuts and Jobs Act will likely prompt congressional action, with potential implications for agricultural-specific measures like R&D cost treatment and equipment depreciation, as well as the fearfully watched estate tax exemption. These changes could create opportunities for strategic estate and tax planning.
3. Subsidy restructuring
The administration may propose restructuring federal farm subsidies, potentially reducing direct payments to farmers while increasing investments in agricultural technology and research. This could promote modernization and self-reliance but might also threaten the financial stability of small and medium-sized farms that rely on these subsidies, creating additional challenges for smaller operators.
The bright spot for subsidies may be the Farm Act, proposed by President Biden. the act provides one last boost for small farmers before he leaves office. The hope is to assist farmers growing crops with low 2024 market prices, like wheat, in sustaining themselves.
4. Technological advancements
Trump’s policies are expected to emphasize advancements in agricultural technology, such as precision farming, artificial intelligence and sustainable practices. Increased funding for these technologies could enhance productivity and efficiency while also reducing labor costs.
5. Rural broadband expansion
Expanding rural broadband access is likely to be a priority to support the adoption of new agricultural technologies. Improved connectivity could help farmers use precision agriculture tools more effectively, potentially leveling the playing field for smaller farms.
These potential changes could significantly reshape the agricultural landscape, affecting everything from farm operations to market dynamics.
How Wipfli can help
While many operators have hunkered down, the smartest ones will be looking to transform their operations in 2025.
Our agricultural industry experience and solutions help companies optimize their operations today while preparing for tomorrow. From talent retention strategies and tax planning to subsidy compliance and estate and transition planning, we focus on practical solutions. Learn more about our agriculture services.
