Farmers Struggle as Trade Wars Hit

Midwest Faces Crop Losses While Southeast Thrives on Housing and Tech

The start of 2025 brought mixed fortunes for U.S. regions. Midwest farmers bore the brunt of trade wars, with low crop prices and high fertilizer costs driving many to bankruptcy. Nebraska and Iowa reported the highest GDP decline of 6.1%, reflecting severe agricultural distress.

Fertilizer supplies tightened due to global conflicts, notably sanctions on Russia and unrest in the Middle East, which disrupted essential urea fertilizer imports.

Josh Linville of StoneX highlighted, “1 out of every 2 tons of urea fertilizer that gets shipped to the United States comes from the Middle East.”

Nationwide, 259 farms filed for bankruptcy in the first quarter alone, surpassing any full year since 2021. Smaller farms felt the hardest impact, with rising input costs and declining market prices.

However, not all regions suffered equally. Southeastern states like Alabama, Arkansas, and Mississippi thrived thanks to strong poultry and egg markets. These commodities outperformed row crops, giving a boost to local economies.

Yet, small row-crop farmers even in the Southeast faced mounting bankruptcies, especially in Arkansas, impacted further by climate-related shipping disruptions on the Mississippi River.

The Southeast's real estate and tech sectors fueled growth in states like Florida, North Carolina, and South Carolina. A surge in population and construction activity led to modest GDP gains.

Federal Reserve’s Matthew Martin noted, “Employment in South Carolina is on fire right now and North Carolina is doing well also.” However, concerns linger over tariffs, labor shortages, and federal immigration policies, which could affect future growth.