Harris’ Vice President Pick Brings Farming Issues Off Backburner

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(Bloomberg) — Vice President Kamala Harris’ decision to pick the governor of a major farming state as her running mate has signaled to the shrinking US agricultural industry that its top issues may finally get some attention on the campaign trail. 

Tim Walz’s Minnesota is the country’s top turkey-producing state, its No. 4 corn state and home to agricultural giants from crop trader Cargill Inc. to dairy cooperative Land O’Lakes Inc. During his six terms in Congress, Walz was involved in the crafting of three farm bills; as governor, he has advocated for policies aimed at boosting crop-based renewable fuels like corn ethanol.

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“The attention span of a national campaign is limited, and Vice President Harris has not been focused on agricultural issues,” said Scott Segal, a lobbyist and partner at Bracewell LLP in Washington. “The addition of Governor Walz marks a clear focus on agricultural issues in a way likely to be meaningful for upper Midwestern states so relevant to the success of Democratic ticket.”

The stakes of the upcoming election are high for the $1.5 trillion US agricultural sector. Although neither party is likely to only help or hurt the industry, the risk of new tariffs or changes to the country’s biofuel policy would only amp up the uncertainty for farmers already facing their biggest income slump since 2006.

“Rural America is on the ballot,” Deidre DeJear, a former Iowa governor candidate, said during an online event held by Outrun Coalition, a group supporting progressive rural candidates.

Here’s a look at how this year’s election may prove critical for US farming: 

Tariffing

Republican nominee Donald Trump is eager to aggressively use tariffs again if he returns to the White House. That evokes memories of the disruptions led by his trade war with China, when exports plummeted and farm bankruptcies rose. Trump ended up paying farmers $28 billion in aid to soften the blow, and a 2020 deal with China brought stability back to the markets. Still, China has since turned to Brazil instead of the US for more of its corn and soybeans supplies.

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Harris’ limited record suggests a trade stance more or less in line with that of President Joe Biden, who has maintained many of the tariffs that Trump imposed on China and implemented additional ones on goods like EVs. 

Harold Wolle, president of the National Corn Growers Association, expressed concern about the US trade outlook regardless of who wins. “There is a protectionist vibe in Washington, DC, right now and I don’t see a change in that attitude coming from either party,” he said.

Biofuels

Trump has repeatedly called Biden’s landmark legislation to address climate change — which includes massive incentives in the Inflation Reduction Act to make truck and jet fuels from crops and animal waste — part of a “green new scam,” raising concerns about the measure’s future if he were to return to the White House.

But scrapping or diluting Biden’s signature climate law, approved in 2022 with a tie-breaking vote from Harris, could prove politically difficult. That’s in part because red states and districts have gained the most from the investments and clean energy subsidies unlocked by the plan. Earlier this week, a group of US House Republicans urged House Speaker Mike Johnson not to repeal the clean-energy tax credits.

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If elected, Trump had said he would quickly move to repeal a Biden-era regulation that effectively compels automakers to sell more electric vehicles, a welcome message to ethanol producers who see EVs as an existential threat. Trump’s Treasury Department could also face pressure to rewrite policy to make the sustainable aviation fuel tax credit easier to claim by jettisoning land-use and sustainable agriculture requirements sought by some environmentalists. 

A raft of other thorny biofuel questions will also land on the new president’s desk. Top of the list is an industry push for the US Environmental Protection Agency to set higher quotas for advanced biofuels like renewable diesel. Another key issue is whether the Treasury Department should restrict tax credits for biofuels made from foreign-sourced ingredients, such as used Chinese cooking oil or Brazilian beef tallow. If Trump wins, it is likely that waste oil from China would be included in a broad list of products facing higher levies. Any barriers are opposed by most fuelmakers, which would typically prefer to be able to buy the cheapest ingredients without any restrictions. 

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US Dollar

Trump has repeatedly said the strong dollar has become a major problem for the economy and that he will pursue a devaluation. Over the past five years, the dollar has gained more than 40% against the the Brazilian real, giving farmers in the world’s largest soybean exporter a critical edge over their US competitors.

A reversal of this trend would boost US producers’ ability to compete overseas while raising the cost of imported crop-inputs such as fertilizers. 

War in Ukraine

Trump has said one of his priorities would be to negotiate an end to Russia’s war in Ukraine, one of the world’s largest suppliers of wheat and corn. The conflict disrupted grain supplies and helped propel prices to a record high in 2022, although its impacts on trade have since subsided. A peace deal would potentially boost the outlook for Ukraine’s grain production, Capital Economics analysts including Liam Peach said in a note to clients.

Sugar Subsidies

A 900-page conservative manifesto for reshaping the US government known as Project 2025 proposed the extinction of the federal sugar program, which combines marketing allotments, import quotas and tariffs to keep supplies under check and support domestic prices. Ending the legislation, which has survived both Democratic and Republican administrations since 1981, would likely allow for more sugar — including from top suppliers Brazil and India — to enter the US market, bringing domestic prices down to international levels. 

Trump has distanced himself from his allies’ Project 2025 amid a pushback on the proposals. Harris is vigorously campaigning against the plan overall.

Farm Insurance 

The 2025 Project also proposed the extinction of two programs that protect farmers against revenue losses. It suggested a reduction in the subsidies to the premium cost for farm insurance as well. Such farm safety-net issues are core to the farm bill, a massive law that sets US agriculture and food policy every five years. 

—With assistance from Jennifer A. Dlouhy and Ilena Peng.

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