The Fire Hose of Chaos: Agriculture

Peter Zeihan 12 min

Over the course of the next three or four years we're looking at somewhere between a quarter and a third of U.S. producers just going out of business because of the trade war. So as food becomes more approachable in the near term, you know it's going to become much more difficult in the long term.

  • Donald Trump

Chapters

  1. 0:00

    Trade War Impact on Agriculture

    The Trump administration's trade policies target major agricultural export partners, causing severe disruptions to the sector. Sales to China have effectively ceased due to tariffs, leading to a permanent loss of a key market for American farmers.

  2. 2:26

    Meat Sector Vulnerability

    The beef industry faces significant losses as it over-relied on Chinese demand, unlike pork which diversified earlier.

  3. 5:35

    Loss of Undesirable Parts Revenue

    A significant portion of animal sale proceeds comes from parts sent to foreign markets, which are now unavailable.

  4. 6:17

    Soybean Crisis

    Current soy farmers face immediate ruin as Chinese buyers will not purchase U.S. soy again due to existing stock in Brazil.

  5. 8:25

    Specialty Crop Collapse

    West Coast specialty crops like pistachios and cherries are devastated as China's financial support for these imports disappears.

  6. 9:29

    Need for Massive Bailouts

    Preserving American agriculture requires tens of billions in annual funding, a level of support not currently being offered. Without intervention, the industry faces a crisis similar to the 1980s where one-fifth of producers will go out of business.

  7. 10:49

    Immediate Price Drops Signal Bankruptcy

    Sudden cheap food prices indicate that farmers are liquidating assets to cover debts after going out of business.

Key points

  • 0:00

    Trump has basically picked fights with America's number one, number two, number three, number five, number nine, number eleven, number twelve, number fourteen, and number seventeenth largest trading partners when it comes to agricultural exports.

  • 0:00

    U.S. sales to China have functionally gone to zero, and they will not be coming back this year or next year or the year after.

  • 2:26

    The beef guys were like, oh, there's a protein shortage in China. We can help with that. And they just surged into China and they made themselves exposed in a way they had never had been before.

  • 5:35

    Somewhere between 10 and 30% of the proceeds from the sale of an animal comes from those what we would consider undesirable parts that are sent to foreign markets where they just yak it up.

  • 6:17

    The Brazilians had a great production year last year, so there's plenty of soy in the global markets, and the Chinese will never buy soy from the United States again unless they have no choice.

  • 8:25

    If you're looking for a zone that is particularly screwed, there is very, very little in California's Central Valley that is going to survive the next two years because their primary source of demand, the majority of their demand, has just gone away completely.

  • 9:29

    If we're going to keep our current slate of ranchers and farmers alive, it's going to take tens of billions of dollars a year from now on.

  • 9:29

    Or we get something about twice as bad as the 1980s farm crisis, which drove ultimately about 20% of agricultural producers out of business in a five-year period.

  • 10:49

    This means some producer somewhere has gone out of business and they have been liquidated and whatever they had that was last has been dumped on the market just to cover the debts.

  • 11:26

    So as food becomes more approachable in the near term, you know it's going to become much more difficult in the long term.

Who and where

People · 1

  • Drawing of Donald Trump

    Donald Trump 5

    President of the United States (2017–2021; since 2025)

    Photo 1

1. Photo: Daniel Torok, Public domain, via Wikimedia Commons · Wikidata · redrawn in our house style (Donald Trump)

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