A look at ag in ‘25
Renegotiated trade agreements and alternative cropping opportunities hold promise in the upcoming year
By Mark Johnson
Although 2025 will likely be another challenging year for grain farmers due to high input costs and low commodity prices, big changes in American leadership and trade philosophy may open and/or expand new markets for Tennessee producers.
In agriculture, the promise of a new year can hold a unique set of both challenges and opportunities. Not only must farmers contend with unexpected weather and volatile markets, but also the influence of new technologies and government policies. Add to that a monumental shift of leadership and political philosophy at the highest levels of American government, and 2025 will likely be a year of change.
By all estimates, though, margins will remain slim for Tennessee’s row-crop farmers, resulting in continued belt-tightening as producers begin planning and scheduling their inputs for the upcoming year.
Tennessee Deputy Commissioner of Agriculture Andy Holt says that while the challenges faced by grain farmers remain, they should also expect some other opportunities spurred by the new leadership.
“I do think the Trump administration is going to breathe life into some of the initiatives that may have been sidelined or mothballed during the past four years,” says Holt, who also operates a diversified livestock and agritourism operation outside of Dresden. “For example, President Trump has already initiated an opportunity for ethanol blenders to increase from 10% to 15% [ethanol] and for that blend to be available year-round. This potentially opens up 50% more volume of ethanol to be utilized throughout some of the summer months when typically, it has not been available. When we look at unleashing the volume of corn that is consumed through the production of ethanol, that’s a pretty significant amount. We saw the row crop prices indicate some rallying and optimism after some of these initiatives were announced, and I hope that trend continues.”
Holt points out that President Trump has reported a commitment of over $3 trillion worth of onshoring of foreign capital in response to new economic initiatives.
“Those types of investments require lots of input, and you couple that much capital with ingenuity and agricultural productivity, and we can create some markets that many people thought were untenable,” he says. “It’s not a competition of food versus fuel, but can be food and fuel, especially with the advances that we have realized in utilizing the distiller’s grains that come off ethanol production. These can be used as a very good component in our animal feeds, for example.”
Holt adds that the challenges in grain farming are moving some producers to consider alternate cropping opportunities.
“There are some companies out there that are looking to establish what I think most of us would consider to be non-conventional Tennessee-type crops mainly because of our geographic accessibility to the masses,” he says. “Tennessee is located within 24 hours of 75% of the U.S. population. As a result, it makes sense to grow food products that are bulky and heavy here, process them here, and sell them here. I think it puts Tennessee in a extremely unique position to continue to expand our food manufacturing footprint by looking at growing some alternative crops.”
Artificial intelligence (AI) and precision agriculture technology is expected to progress substantially over the coming months. Experts also predict a steady increase in Tennessee's international lumber exports, especially to the Vietnamese market, the world's second largest in furniture manufacturing.
While he doesn’t expect all of these crops to make a substantial impact during 2025, Holt says he expects significant movement over the next 12 months.
“Over the last few months I have hosted numerous calls with who I would characterize as traditional row crop producers, especially in the Western portion of the state, reaching out to me in search of crop diversification opportunities," Holt says. "What this has really done is shine light on the fact that producers are actively seeking new sources of revenues from non-traditional cropping opportunities. As a result, I have been, likewise, actively seeking out new markets for Tennessee producers in some likely, and honestly some rather unlikely places. We have a huge food manufacturing footprint here in Tennessee. Without going into too much detail, sometimes the best opportunities are the one sitting right under your nose that you never took the time to consider – mostly because you didn’t have the need to do so. It's safe to say, we are considering every option at the disposal of Tennessee farmers, and I am actively trying to introduce potential producers and users that have looked past one another for years.”
International lumber exports are also expected to create another possible source of revenue for Tennessee producers in 2025, says Holt.
“Our international marketing is really starting to pay off, especially in Vietnam,” he says. “Vietnam is the second-largest furniture manufacturer in the world behind China, and [TDA] has made a concerted effort over the past few years to move some of our lumber into that market — everything from our finest grades down to our 2- and 3-common grades. We’ve seen a 70% increase year-over-year of hardwood lumber being utilized by Vietnamese manufacturers and expect that growth to continue this year.”
Andrew Muhammad, Ph.D, Professor and Blasingame Chair of Excellence in Agricultural Policy at the University of Tennessee Institute of Agriculture, has worked directly with Holt and TDA on this and other lumber projects.
“According to the most recent trade data published by the USDA, Tennessee log and lumber exports to Vietnam rose from $11 million in 2023 to $18 million in 2024,” says Muhammad. “A $7 million increase in export sales to Vietnam is phenomenal, especially considering that the total expenditures on the USDA-funded project were around $200,000. The increase in Tennessee forest product sales to Vietnam exceeded the national average by more than 21% [in 2024]. Vietnam is targeting $20 billion in total timber exports in 2025 — an increase of more than $9 billion compared to now, and Tennessee is in a good position to be a major supplier of logs and lumber as this market continues to grow.”
Muhammed also sees substantial changes in trade due to the change in American leadership in 2025.
“The Trump administration, unlike the previous one, is interested in trade agreements, albeit bilateral as opposed to TPP [Trans-Pacific Partnership] and WTO [World Trade Organization] agreements,” he says. “I would expect that the incoming administration would be interested in finalizing trade agreements with the UK and Kenya, both initiated during his last term. These will likely have an impact on the exports of higher-value food and beverage products, among others.”
He says that the continuing Russia/Ukraine war might also create unexpected export benefits for U.S. producers.
“Interestingly, EU [European Union] trade sanctions on Russia and Belarus have resulted in increased U.S. exports to the EU of industrial wood pellets, a fuel necessary for heating and operation of power plants,” he notes. “These exports have increased to nearly $2 billion, with almost all of that coming from the Southeast U.S., and I expect that to continue in 2025.”
Holt says that along with these opportunities, President Trump’s highly touted trade tariffs will undoubtedly have an impact on American agriculture.
“I think those tariffs will result in changes we’ve not experienced over the past four years and will hopefully provide some advantages to our ag community,” he says. “I don’t fault any nation for wanting to provide for themselves and become more prosperous; that’s the goal of all mankind. However, the manner in which the U.S. has allowed some of these countries to benefit from [current trade agreements] should be looked at. I think there’s going to be a lot more attention paid to those relationships now under the Trump administration.”
By Mark Johnson,
Contact mark@bigharvestcreative.com