How Economic Data Is Shaping the Next Round of Farm Policy Decisions

Inside the fertilizer shock, the trade numbers, and the prevent plant fight driving farm policy conversations at USDA and in Congress

Producers are still working out what a months-long fertilizer supply shock out of the Middle East means for next year's input costs. Chinese trade retaliation has cost U.S. agriculture nearly $15 billion annually, and new analysis is putting a number on it. Congress is weighing a sugar policy fix backed by a bipartisan letter signed by more than 100 members. And USDA is deciding what to do with prevent plant buy-up coverage.

Behind all of these decisions is the same kind of work: economic analysis built to answer a specific question, then handed to the people who have to act on it.

That was the focus of the latest episode of Clearing the Air on Agricultural Policy, the Barry Flinchbaugh Center for Ag and Food Policy's monthly conversation on agricultural policy. This episode's guests were Sandro Steinbach, professor in North Dakota State University's Department of Agribusiness and Applied Economics, and Shawn Arita, a former senior economist in USDA's Office of the Chief Economist — both now with NDSU's Agricultural Risk Policy Center (ARPC).

The Strait of Hormuz Disrupted Fertilizer Markets — But Differently Than 2022

Trade risk shows up just as directly on the input side of the ledger. After the Strait of Hormuz closed at the end of February, ARPC began modeling how different reopening scenarios might affect fertilizer prices.

Arita said the disruption was severe but didn't play out the way the 2022 shock did. "This disruption was much more of a severe supply-side crunch than what we saw in 2022, when we actually did see record fertilizer prices," he said. "This time around, in 2026, we didn't see the same level of record prices."

Urea was the product everyone worried about first, since roughly 30 percent of global supply moves through the strait. Prices pulled back as alternative supply and shipping routes through Oman came online, and China — a swing supplier — stepped back into the urea market. "That helped a lot," Arita said. "We did see prices pull back significantly, and they are in fact lower than what it was when the strait closed."

MAP and DAP told a different story. Sulfur, a key feedstock for both, was also constrained by the closure, and Arita said supply conditions for those products were already tight before the disruption started. How long that pressure lasts depends on how quickly fertilizer production infrastructure in the region gets repaired — and on that point, ARPC's models can't yet say.

China Trade Retaliation Cost U.S. Agriculture Nearly $15 Billion

Trade policy produced a clearer number. Through NDSU's Ag Trade Monitor, Steinbach's team built an econometric model to isolate the direct effect of Chinese retaliatory tariffs on U.S. agricultural exports.

"This disruption was almost equal to fifteen billion dollars of losses in the Chinese market, annualized," Steinbach said — about 40 percent larger than the disruption from the first round of Chinese retaliation in 2018 and 2019.

Some of that loss was offset by diversion to other markets. Steinbach pointed to corn shipments shifting toward Mexico and South America. But diversion doesn't erase the damage for the states and commodities that depend most heavily on the Chinese market, where the direct trade loss was concentrated.

The same dynamic cuts the other way when access holds up. Arita pointed to new purchase pledges China has made as part of a developing trade framework, including a reported commitment to buy up to $17 billion in non-soy U.S. products and 25 million metric tons of soybeans. ARPC's research on the earlier Phase One agreement found China came close to meeting roughly 80 percent of a similar target — but that access faded in the years afterward, once enforcement attention moved elsewhere. "China has to clear the deck, so to speak, to let our products in," Arita said. Whether that happens again is still an open question.

A Sugar Study Shows How Quickly Analysis Can Reach Congress

Not every example involves trade wars or supply shocks. When Senator Hoeven's office asked ARPC to study the effect of rising high-tier sugar imports on the U.S. sugar sector, Arita's team built a partial equilibrium model and put a number on the damage: between $0.9 billion and $1.5 billion.

That figure ended up in a bipartisan letter signed by more than 100 members of Congress, pushing the issue toward the U.S. Trade Representative's office as it considers Section 301 tariffs. It is a smaller example that makes a larger point: timely, targeted economic analysis can help policymakers better understand the tradeoffs before a decision gets made.

The Prevent Plant Fight Demonstrates the Need for Economic Analysis

ARPC's work is meant to inform decisions, not argue for a particular outcome. Steinbach describes the center as nonpartisan, working with USDA, Congress, and industry across the political spectrum. A recent example is the fight over prevented planting buy-up coverage. USDA's Risk Management Agency removed one option a few years ago and announced the removal of a second option in December 2025, effective for the 2026/27 crop year, arguing that ad hoc disaster payments for flooding had made the coverage unnecessary.

ARPC's analysis challenged a common assumption about who actually uses the coverage. Prevented planting is often treated as a Northern Plains issue, but Steinbach said the data doesn't support that. "Prevent plant is not a North Dakota or South Dakota issue," he said. "It's a tool used in many regions, with loss ratios in Arkansas and California much higher than they are in the Dakotas."

That distinction matters because it shapes how the removal gets evaluated. A coalition of congressional members from both parties has since pushed USDA to reconsider the change, pointing to the data ARPC presented: the tool is used in many regions and was doing what it was designed to do.

ARPC Is Building Models That Start at the Farm Level

Knowing how a program has worked is different from knowing what happens if it changes. Steinbach said ARPC is building data integrations — combining state and county data with USDA's Risk Management Agency records — to model how changes to the farm safety net scale from individual farms up to macroeconomic outcomes.

That's harder than it sounds, because farmers don't all respond to the same incentives the same way. "Every farmer is different," Steinbach said. "They're all driven by different behavioral factors. So you really need to start at the producer level to even make statements, because you need to know what the preference sets are." That farm-level approach is what ARPC plans to lean on as the prevent plant debate, and others like it, move toward resolution.

Where Things Stand on Prevent Plant

Most of what ARPC works on doesn't resolve quickly. After receiving roughly 450 letters from producer and industry groups, USDA is expected to announce a decision on the future of buy-up coverage soon. Whichever way it goes, the data and modeling behind this debate will keep getting used as Congress works through the next farm bill cycle.

Steinbach and Arita joined Clearing the Air on Agricultural Policy, hosted by Eric Atkinson of Kansas State University with regular panelists Jennifer Ifft, the Flinchbaugh Agricultural Policy Chair at Kansas State University, and Mark Edelman, professor emeritus and longtime agriculture and rural policy specialist at Iowa State University.

Clearing the Air is produced as a monthly collaboration between the Flinchbaugh Center and Smoke and Mirrors, Ifft's podcast on agricultural policy.

Watch the full conversation with Sandro Steinbach and Shawn Arita.

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About Clearing the Air 

Clearing the Air is a monthly podcast brought to you by The Flinchbaugh Center in partnership with the Smoke and Mirrors podcast. Hosted by Eric Atkinson, the show offers thoughtful, fact‑driven conversations for anyone interested in the intersection of agricultural economics, policy, and real‑world decision‑making. Each episode features insights from Jennifer Ifft, Mark Edelman, and Brad Lubben, along with a rotating monthly guest.