WASHINGTON — The American Enterprise Institute published "Scenarios for Agricultural Trade in a Changing World" this week, joining analyses weighing how $178 billion in fiscal 2024 US farm exports hold up under new tariff regimes.

AEI, a Washington-based research organization established in 1938, circulated the paper through its trade and economic policy channels. The paper's title frames the analysis as a scenarios exercise, a format researchers use to test how a sector performs under competing assumptions on tariffs, currency, supply and demand.

Body text and detailed modeling assumptions from the paper were not included in the initial distribution. The framing alone, however, signals an interest in stress-testing the variables row-crop and livestock exporters track daily: basis levels at country elevators, free-trade eligibility for major destinations, and demand elasticity when US prices rise against global benchmarks.

Why scenarios, why now

US agricultural exports set a record $196 billion in fiscal 2022 before easing to about $178 billion in fiscal 2024, according to the USDA Foreign Agricultural Service. Producers and agribusinesses are watching for signs that new tariff schedules, retaliatory duties and bilateral negotiations will redirect or reduce that flow through 2025 and beyond.

Row crops expose this risk most directly. Roughly half of US soybeans and a third of US wheat move offshore in typical marketing years. A sustained 10% drop in export volumes drives basis pressure at country elevators within weeks and ripples back to local cash bids.

Meat and dairy face parallel exposure. Combined beef, pork and dairy exports approached $28 billion in 2023, per FAS data. Producers from Iowa to California depend on consistent access to Japan, Mexico, Canada, South Korea and the Philippines.

What to watch in the details

Scenarios work is only as useful as the assumptions plugged into it. Producers comparing AEI's findings against their own operations should track three inputs:

• Duration of any new tariff schedule
• Pace of South American production growth in Brazil and Argentina
• Trajectory of Chinese import demand for soybeans and pork

Federal cost-share tools also shape the competitiveness calculus. The 2018 farm bill set annual funding at about $235 million combined for the Market Access Program and Foreign Market Development program, the two main federal cost-share tools supporting cooperatives and state trade groups running overseas offices.

The paper's release coincides with the rollout of the new administration and ongoing trade policy reviews at USTR and USDA, factors that will shape whether AEI's scenarios tilt toward contraction or expansion of US export volumes.

Bottom line

AEI's "Scenarios for Agricultural Trade in a Changing World" lands as exporters prepare for the next WTO ministerial talks and as Congress begins preliminary work on the 2025 farm bill. The paper's framing makes clear its authors view the policy environment as volatile enough to warrant bracketed outcome paths rather than a single forecast.

Producers can extract the most value from the paper by cross-checking its scenarios against their own cost-of-production numbers and forward-contract positions, and against the latest WASDE projections from the Department of Agriculture.