You better stop, look around
Here it comes, here it comes, here it comes, here it comes
Here comes your nineteenth nervous breakdown
The Rolling Stones, 19th Nervous Breakdown, 1966
Two things are certain. For sure the Rolling Stones were not thinking of the plight of farmers when they wrote these lyrics. But equally certainly the loss of access to international markets caused by tariffs (especially for soybean growers), low corn prices, the uncertainty of any U.S. administration response and the resultant strain across the U.S. row crop sector must make them highly relatable to growers. Likewise the general bafflement at the strange logic of $40 billion in support for Argentina and the opening of the U.S. market to imports of Argentine beef at a time when they are active competitors to U.S. soybean growers and now U.S. ranchers (the latter currently enjoying robust beef prices). West Coast farmers will likely feel similarly, for example, as they consider ploughing in vines due to declining wine consumption and low grape prices. If you read my July article, We are all risk managers now, you will know that I think there are moments when art mimics life. This remains one such moment.
I know nothing stays the same
But if you're willing to play the game
It's coming around again
Carly Simon, Comin' Around Again, 1987
Going out on a limb here, the past few weeks have seen multiple specialist and generalist news outlets publish or broadcast reports on the challenges facing U.S. farmers because of the tariffs imposed by the United States. These range from the Wall Street Journal, the New York Times, CNBC, MSNBC and other television networks, including Fox News, to more sector-focused ones like POLITICO Weekly Agriculture, AgAmerica, farms.com and more. As at time of writing, talk of a bailout from the government has not yielded action. And no bailout for farmers can, over any extended time, be deemed a replacement for international market access, open and free trade and stable supply chains. On October 23, we were treated to an example of trade policy being driven by dislike of a TV commercial. As Alice would say, it gets curiouser and curiouser.
This is, in many respects, a rerun of 2017 to 2020. More broadly, there is a case to be made that populism has not really been a net positive for domestic farmers either in the U.S. or the UK. It has been estimated that as many as 90 percent of farmers voted Republican in the 2024 U.S. election and about 65 percent of British farmers voted for Brexit. Outcomes have been less than the campaigners promised, by any measure. According to the most recent available UK government data, in 2021/2022, based on the Net Farm Income, just over one-third of farms in the UK fell into the lower income brackets (less than £20,000, approximately $26,000) for the year while 19 percent of farms failed to make any profit at all. For clarity, Net Farm Income adjusts Farm Business Income for an imputed rental of a house and unpaid labour, excluding farmer and spouse. In other words, it is an attempt to capture a more complete cost structure, in the same way as imputing a lease rate for land that is owned is important for determining overall return on capital employed.
Out here in the fields
I fight for my meals
I put my back into my living
The Who, Baba O'Riley, 1971
If the business of farming is to feed the world, then the stakeholder universe is overwhelmingly disconnected from on-farm realities. World Bank data suggest that as of 2024 just under 58 percent of the global population lived in urban areas, up from about 30 percent in 1960. Forecasts from the United Nations are that this figure will reach 68 percent by 2050. If we want to risk perhaps a very small generalisation, there is an 80/20 at play here: developed countries tend to have urban populations that reach into the 80+ percent; poorest countries tend to have about the inverse with urban populations in the 20+ percent.
This is significant because on-farm factors across the producing world, exacerbated by external factors affecting trade and tariffs, are increasing the cost of food and inflation generally. Traders fear that geopolitics now impact markets in the same way as supply and demand used to, especially given correlations of input prices to other commodities. According to the OECD, year-on-year food inflation in OECD countries is now outstripping broader measures of inflation: food prices rose 5 percent in August 2025, while overall inflation was 4.1 percent.
Sometimes everything is wrong
Now it's time to sing along
R.E.M., Everybody Hurts, 1992
As increases in the cost of food outstrip overall inflation, affordability has become a central issue which is only poised to intensify as disposable household income stagnates. According to data from the OECD, in Q4 2024, despite an overall increase in household income across the 19 member countries, the picture was decidedly mixed: 9 countries saw an increase, 7 recorded a decrease and 3 showed no change. Despite an increase in real household income per capita of 0.5 percent in 2024, by Q1 2025 this had fallen to 0.1 percent. Limited to no growth is expected as economic growth overall slows down.
This has multiple implications for sector participants, and societies more broadly. Factors driving inflation are complex and varied, but prone to distortion as more people globally struggle to feed themselves and their families. Visible, or more tangible, results include:
- Supply uncertainty
- Oversimplification of causation
- Inaccurate and dubious finger-pointing by politicians
- Rising prices which, among other outcomes, increase theft from supermarkets and other retailers
- Deterioration in daily diets as quantity of needed calories displaces quality as a driver of food choices
Less immediately visible, but nonetheless pernicious, results are: environmental impacts, distracted and overstretched police and law enforcement, increases in nutrition-related illness and demands on health and social care systems, higher taxes and health insurance costs (depending on where you live) and ultimately reduced economic productivity. A number of these impact most directly the less well-off segments of the population and, in the U.S., people without health insurance: a study by the National Institutes of Health in 2022 looked at patients at a clinic in South Florida with a mean age of about 49, and found that 87 percent had at least one nutrition-related condition, with overweight or obesity observed in over 75 percent. A recent study in the UK estimated that the obesity and overweight epidemic costs the National Health Service over £12.5 billion a year, with total costs to the economy estimated at an additional £31.4 billion. Reductions in premature deaths from smoking are increasingly being offset by increases caused by obesity and nutrition-related factors.
Well I'll be coming home tonight
Everything will be alright
And we'll be looking at tomorrow
The Beach Boys, Lookin' at Tomorrow, 1971
Policymakers and investors should be conscious of, and anticipate the kinds of consequences that these trends could portend. It could be argued that as farmland consolidation continues, the risk profile also increases. Quite simply, deeper-pocketed owners are more attractive litigation targets. On-farm practices are certainly a part of this conversation, but the macro reality is that whoever buys or processes farm outputs will increasingly need more data to support the safety and integrity of the crop. Being regenerative, sustainable and even organic may be helpful, and indeed some food companies already want this identifier on their packages, in the same way as sustainability certifications are also increasingly displayed. But, at the core, this is about technology, management, and risk; in the end financial viability is the cornerstone requirement, but the data will reveal all.
About the author
David has been an ag investor, having launched a sector-specific fund in 2008, and has been an adviser to emerging growth companies and investors across the sector. He is now Sales and Growth Lead for Phlo Systems Ltd in London. Phlo offers unique solutions for commodity-based businesses including: end-to-end ERP and CTRM (commodity trading and risk management), a comprehensive trade finance management platform for non-bank trade finance providers, and customs clearance and compliance software and services.