Geopolitics has become the major factor driving global agricultural markets in recent years, outweighing traditional supply and demand forces, according to Joseph Glauber, who served as chief economist of the US Department of Agriculture from 2008 to 2014.
Glauber pointed to last year's US tariffs and the current conflict in the Middle East, particularly the closure of the Strait of Hormuz, as prime examples of how geopolitical events now shape commodity prices and trade flows. He made these comments ahead of the Sosland Purchasing Seminar event in Kansas City.
The Middle East shipping crisis
The closure of the Strait of Hormuz has pushed fertilizer and energy prices higher, but grain and oilseed prices have remained relatively subdued so far. Glauber cautioned that the longer the strait remains closed, the bigger the impact on fertilizer markets. The critical question is whether fertilizer cost will constrain production enough to raise crop prices.
Production impacts depend on how long prices stay elevated. In 2022, when fertilizer prices were even higher than current levels, Glauber noted that major production setbacks did not occur. Producers who bought inputs before late February will not feel the full pinch until the next planting season. Southern hemisphere growers, however, could face harder hits if prices remain high through the rest of the year.
The China tariff shock
The Trump administration's tariffs have dealt a much sharper blow to US farm exports than the Middle East shipping disruption. US soybean exports to China dropped 75 percent in 2025 compared to 2024, according to Glauber. While US exporters found other markets, sales did not nearly offset the loss to China.
China remains the world's largest importer of agricultural products and will stay a critical destination for US farm exporters. Glauber noted that the US cannot easily diversify away from China, and that private companies, not the government, make the final export decisions. Government policy can help by negotiating better market access through trade agreements, but can also hurt trade through tariffs that trigger retaliation.
Corn and meal outlooks
US corn exports have benefited from Mexico's suspension of feeder cattle imports, which boosted demand for feed corn. That advantage will likely fade once the border reopens, though Mexico will remain a top market. Soybean meal exports are surging because more soybeans are staying in the US to be crushed into biodiesel rather than shipped overseas. If biodiesel demand grows as forecast, soybean meal exports should continue to rise.
USMCA at risk
The sunset review of the US-Mexico-Canada Trade Agreement is scheduled for July. Glauber called the deal invaluable for US agriculture and urged that the overarching principle in renegotiation should be "do no harm". He believes Canada and Mexico share that sentiment.