Arizona farmers stand to benefit from a $12 billion farm bailout announced by the White House on Monday.
The bailout comes as farmers navigate trade uncertainty stemming from tariffs instituted by President Donald Trump as well as longer-term challenges like low commodity prices and high operational costs.
Farmers say costs for fuel, insurance and equipment have surged even as crop prices slump — a trend that predates the trade battles.
The U.S. Department of Agriculture will send $11 billion of the so-called bridge payments to farmers growing row crops like soybeans, cotton, corn and wheat, it wrote in a press release. The remaining $1 billion will go to other categories of crops, like sugar. The USDA said the payments respond to “temporary trade market disruptions and increased production costs.”
In 2018, the first Trump administration distributed similar payments to farmers during a trade war with China.
Federal assistance represents a “lifeline” for Arizona farmers, said Julie Murphree, the communications director of the Arizona Farm Bureau. She said the bureau’s members face tough economic conditions that predate the Trump administration’s trade policy.
Crop prices have dropped since 2023, according to the USDA’s National Agricultural Statistics Service, while payments by farms — for things like insurance and machinery — have remained high.
“We need commodity prices to go up and we need costs to go down,” Murphree said.
In that context, trade uncertainty under the Trump administration has created a “perfect storm” for farmers, said Jadee Rohner, the executive director of the Arizona Cotton Growers Association.
“Retaliatory trade wars have impacted producers in Arizona severely,” she said.
Tariffs adopted by other countries in response to U.S. tariffs can affect farmers who export their crops. International exports account for only 8% of Arizona’s total agricultural sales, according to a University of Arizona report. But they are crucial to segments of Arizona’s agriculture, comprising 16% of grain sales, 39% of fruit sales and 88% of cotton sales.
Arizona’s agricultural exports support 7,475 in-state jobs, according to the University of Arizona’s report.
Economic condition of Arizona cotton farmers depends on more factors than tariffs
The export market for American cotton has declined since 2022, according to the USDA. The strongest recent factors depressing demand for U.S. cotton have been a huge increase in Brazilian cotton production and the growth of the artificial fiber industry, said Paul Bush, the CEO of cotton marketing cooperative Calcot.
“The tariffs certainly haven’t helped,” he said, adding that their main effect was contributing to uncertainty in the supply chain.
That means bales of cotton piling up in warehouses around the world as economic certainty depresses orders from retailers and manufacturers, Bush said.
Bush said that China’s 15% retaliatory tariff levied on U.S. cotton between March and November did not significantly affect Arizona cotton sales.
Calcot markets about one-third of Arizona’s cotton crop to buyers, Bush estimated. He said Chinese companies are buying less U.S. cotton, but not because of trade conflicts.
“China’s lack of cotton-buying is more political right now than it is because of the tariff,” he said.
He said Chinese textile firms have extensive connections in Asian countries with large textile industries, and that much of the growing share of U.S. cotton exported to those countries — like Vietnam — may well end up in China. Bush said processing facilities in Vietnam, South Korea and China are the top destinations for Arizona cotton.
Meanwhile, Nancy Caywood, whose family has farmed cotton and forage crops in Pinal County for four generations, identified one main challenge: drought.
She hopes new federal assistance can help cover the water assessment fee of over $20,000 her family pays to their local irrigation district even when droughts stop water from flowing.
“It’s not going to be a whole lot of money. But anything will help,” she said.
In its press release, the USDA wrote that eligible farmers can expect payments in February.
