President Trump’s tariff bonanza will undoubtedly affect farmers, who are already preparing for the worst: lower incomes, higher production costs, and the potential shuttering of smaller farms.
But some sustainable ag tech companies could take advantage of a moment when farmers may want to “stretch their dollar” by downsizing fields and using smaller, more precise equipment than tractors, Hylio CEO Arthur Erickson told Tech Brew.
His company makes ag drones that cropdust small portions of farmland with herbicides, fungicides, or fertilizer, making farming more sustainable by reducing the amount of chemicals sprayed on land, which can then run off into waterways. Erickson told us he predicts farmers will want to take advantage of the drones’ precise spray width.
“We’re well positioned to take advantage of it,” Erickson said of the change in the market due to tariffs. “It is going to change our sales tactics a bit, and there might be a temporary dip here and there because of cash flow issues and stuff, but I think we’re going to come out on top.”
And it’s not just Hylio: Erickson told Tech Brew this particular moment could be a time when farmers want to rethink the technology they use and invest in precision agriculture machinery.
“It doesn’t have to just be [Hylio],” Erickson said. “[Farmers should] try to adopt some of these practices.”
There’s another complicating factor beyond tariffs: With more Chinese tech companies facing the possibility of sanctions or bans, Erickson hopes farmers wanting to purchase precision agriculture equipment choose American-made machinery.
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“Yes, a lot of times the Chinese stuff is cheaper, even with the tariffs up front,” he said. “But be careful what you’re paying for it, because it might be banned.”
Yet it’s not clear if farmers will have the income to invest in new equipment amid so much economic uncertainty.
“Lower crop prices, in addition to higher input costs, could potentially impact purchasing behaviors,” Cody Roewe, an associate VP at agriculture research company Kynetec, told Tech Brew. “They may look to [invest in precision agriculture] but they may delay those purchases until there’s more certainty.”
Farmer purchasing power will also rely on the availability of federal assistance, which the Trump administration authorized during its first term. But according to a recent poll from Ag Web, farmers don’t seem confident that they’ll receive help the second time around: When asked if they thought the US Department of Agriculture would “compensate farmers for losses” as a result of tariffs, 36% of farmers said no and 30% said they weren’t sure. More than half said they don’t support Trump’s use of tariffs.
“With farmers in particular, there’s always a certain level of uncertainty,” Roewe said. “By adding another variable to that equation—a tariff—that just kind of exacerbates the challenges they’re already facing.”