Report on the Economic Viability of U.S. Agriculture and its Implications for Sustainable Development Goals

Executive Summary

U.S. corn and soybean producers are facing a severe economic crisis characterized by plummeting commodity prices, high production costs, and trade policy instability. This situation presents significant challenges to the achievement of several Sustainable Development Goals (SDGs), particularly SDG 1 (No Poverty), SDG 2 (Zero Hunger), and SDG 8 (Decent Work and Economic Growth). This report analyzes the crisis, its impact on rural livelihoods, and the policy responses aimed at mitigating its effects while fostering sustainable agricultural systems.

Analysis of the Agricultural Economic Downturn and its Impact on SDG 2

The financial stability of the agricultural sector is fundamental to ensuring sustainable food production systems, a core target of SDG 2 (Zero Hunger). Recent market dynamics have severely undermined this stability.

• Price Collapse: Corn prices have fallen by over 50% since their 2022 peak, while soybean prices have declined by approximately 40%.
• Cost Disparity: While crop prices have crashed, production costs have only decreased by 3%, leading to significant financial losses for farmers, such as an 85-cent loss per bushel of corn.
• Threat to Food Producers: The American Soybean Association and the National Corn Growers Association have issued warnings that farmers are under extreme financial stress and cannot survive a prolonged period of unprofitability, threatening the resilience of the food supply chain.

Challenges to SDG 1 and SDG 8 in Rural Communities

The economic crisis in the farm sector directly threatens the livelihoods of farmers and the economic vitality of rural areas, posing a risk to SDG 1 (No Poverty) and SDG 8 (Decent Work and Economic Growth).

Financial Conditions

A Federal Reserve survey highlights the deteriorating financial health of agricultural producers:

1. Weaker farm income has reduced liquidity and increased the demand for financing.
2. Credit conditions have worsened, with a significant percentage of lenders reporting lower loan repayment rates compared to the previous year.
3. The American Soybean Association notes that farmers are paying significantly more for essential inputs and equipment, further eroding their economic standing.

The Role of International Trade and SDG 17

Stable global trade is crucial for market access and farmer income, directly relating to SDG 17 (Partnerships for the Goals). Ongoing trade disputes have disrupted established partnerships and created market volatility.

• Market Disruption: The American Soybean Association reported that due to tariff retaliation, longstanding customers in China have shifted to competitors in South America.
• Loss of a Key Partner: China, historically a primary importer of U.S. soybeans, has not made future purchase commitments, leaving farmers in a precarious position as the harvest season approaches.
• Advocacy for Renewed Partnerships: Both the corn and soybean associations have called on the U.S. government to prioritize trade negotiations to restore market access and secure purchase commitments.

Policy Responses and Mitigation Strategies

In response to the crisis, government and industry bodies are implementing measures to support farmers and align with sustainable development objectives.

• Government Financial Support: The “One Big Beautiful Bill Act” includes approximately $59 billion for farm safety-net enhancements. This intervention aims to protect farmer livelihoods, contributing to SDG 1 (No Poverty) and ensuring the continuity of food production (SDG 2).
• Domestic Demand Initiatives: The National Corn Growers Association has advocated for policies to boost domestic demand, such as the use of higher blends of ethanol, which aligns with goals for sustainable energy and economic growth (SDG 8).
• Diversifying Trade Partnerships: The U.S. is strengthening trade relationships with other Asian nations, including Indonesia, Bangladesh, Vietnam, and the Philippines. These new agreements are expected to increase demand for U.S. agricultural exports, fostering resilient and diverse partnerships in line with SDG 17.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 2: Zero Hunger
   • The article focuses on the economic viability of producers of staple crops (corn and soybeans). The financial stability of these farmers is fundamental to ensuring a stable and secure food supply. The “economic crisis hitting rural America” directly threatens the producers who are at the start of the food value chain.
2. SDG 8: Decent Work and Economic Growth
   • The article directly addresses economic issues by describing the “economic crisis” faced by farmers, characterized by “weaker income,” “extreme financial stress,” and deteriorating “farm financial conditions.” This highlights a threat to sustained and inclusive economic growth, particularly in the rural and agricultural sectors.
3. SDG 17: Partnerships for the Goals
   • The central theme of the article is the impact of international trade policies on the agricultural sector. It extensively discusses the “trade war,” “tariff retaliation” with China, and the pursuit of new trade deals with other Asian nations. This directly relates to the goal of fostering a global partnership for sustainable development through fair and open trade.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 2 (Zero Hunger)
   • Target 2.3: By 2030, double the agricultural productivity and incomes of small-scale food producers… The article’s emphasis on the severe decline in farmer income due to crashing commodity prices (“Corn prices have plunged more than 50%”) and high production costs directly relates to the income component of this target.
   • Target 2.b: Correct and prevent trade restrictions and distortions in world agricultural markets… The article’s discussion of the “trade war,” “tariff retaliation,” and the American Soybean Association’s plea for the “removal of Beijing’s duties” aligns perfectly with this target.
2. Under SDG 8 (Decent Work and Economic Growth)
   • Target 8.1: Sustain per capita economic growth in accordance with national circumstances… The article describes a situation that undermines this target, detailing how “farm incomes” and “credit conditions deteriorate,” signaling a contraction in the agricultural economy.
3. Under SDG 17 (Partnerships for the Goals)
   • Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system… The “trade war” and retaliatory tariffs described are the antithesis of this target, representing a move away from an open and stable trading system.
   • Target 17.11: Significantly increase the exports of developing countries… While the U.S. is a developed country, the principle of securing and increasing export market access is central. The article highlights farmers’ calls for “increased foreign market access” and notes that due to tariffs, “customers in China have and will continue to turn to our competitors.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicators for Farmer Income and Viability (Target 2.3)
   • Commodity Prices: The article provides specific data points, such as “Corn prices have plunged more than 50% from their 2022 peak” and “soybean prices have fallen about 40%.”
   • Profit Margins: The article quantifies farmer losses, stating that the price and cost changes for corn “translating to a loss of 85 cents per bushel.”
   • Input Costs: It is mentioned that “production costs are down just 3%” while prices have crashed, indicating a severe squeeze on profitability.
2. Indicators for Economic Conditions (Target 8.1)
   • Credit Repayment Rates: The Federal Reserve survey provides a clear indicator of financial distress, noting that “roughly 30% of respondents in the Chicago Fed and Kansas City Fed districts reporting lower repayment rates,” with figures rising to 40% and 50% in other districts.
3. Indicators for International Trade (Targets 2.b, 17.10, 17.11)
   • Trade Volumes: A direct indicator of the trade dispute’s impact is that “China hasn’t purchased any U.S. soybeans for the months ahead.”
   • Trade Barriers: The existence of “duties on the U.S.” and “ongoing tariff retaliation” serve as direct indicators of trade restrictions.
   • Market Diversification: The article implies a shift in trade patterns, noting that China is turning to “competitors in South America” and that the U.S. is pursuing deals where “Indonesia and Bangladesh have agreed to boost buying.”

4. Table of SDGs, Targets, and Indicators

Source: fortune.com