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How is the Consumer Price Index Impacted by Trade Talks

Since “Liberation Day” back on April 1, 2025, and even before that, trade has been a major news topic. The current administration’s strategy to use tariffs and the size of the U.S. economy as leverage to change trade relationships with the rest of the world has generated a lot of uncertainty in the market. Both ag and non-ag industries have reacted to the almost daily trade talk news. Arguments for and against tariffs are all over the place, with the main question being, who is going to pay for the tariff hikes?

To better address this question, it is important to differentiate between short- and long-term effects as the market adjusts to news regarding tariffs. Tariffs are a tax imposed on imported goods and services. Sellers will do their best not to pass the tax to the consumers as that will probably reduce the quantity demanded and potentially reduce their market share to competitors less affected by tariffs. Therefore, to keep their market share, sellers might absorb some of the impact of the tariffs in the short run waiting for the results of trade negotiations. However, if sellers believe that the new tariff rates will remain in place for the long run, they might decide to pass the cost of the tariffs to consumers as their profit margins are probably reduced.

To illustrate, Table 1 shows the monthly percent changes in CPI for all urban consumers, which shows that there has not been a major change in CPI after “Liberation Day.” The latest figures for July 2025 show that the CPI for all items is 0.2 percent, while food remained unchanged and energy decreased 1.1 percent. In addition, the un-adjusted 12-month CPI ending in July 2025 shows 2.7 percent for all items, which is within normal ranges, especially coming off a historic high inflation over the last couple of years. Food items went up 2.9 percent, with the largest increase being in food away from home at 3.9 percent, while energy went down by 1.6 percent. Will this continue over the intermediate- and long-run? Only time will tell.

Table 1. Percent Changes in CPI for All Urban Consumers (CPI-U): U.S. city average

	Seasonally adjusted changes from the preceding month
	Jan. 2025	Feb. 2025	Mar. 2025	Apr. 2025	May2025	Jun. 2025	Jul. 2025	Un-Adjusted 12-month*
All Items	0.5	0.2	-0.1	0.2	0.1	0.3	0.2	2.7
Food	0.4	0.2	0.4	-0.1	0.3	0.3	0.0	2.9
Food at home	0.5	0.0	0.5	-0.4	0.3	0.3	-0.1	2.2
Food away from home	0.2	0.4	0.4	0.4	0.3	0.4	0.3	3.9
Energy	1.1	0.2	-2.4	0.7	-1.0	0.9	-1.1	-1.6
Energy commodities	1.9	-0.9	-6.1	-0.2	-2.4	1.0	-1.9	-9.0
Gasoline (all types)	1.8	-1.0	-6.3	-0.1	-2.6	1.0	-2.2	-9.5
Fuel oil	6.2	0.8	-4.2	-1.3	0.9	1.3	1.8	-2.9
Energy Services	0.3	1.4	1.6	1.5	0.4	0.9	-0.3	7.2
Electricity	0.0	1.0	0.9	0.8	0.9	1.0	-0.1	5.5
Utility (piped) gas service	1.8	2.5	3.6	3.7	-1.0	0.5	-0.9	13.8
All Items Less Food and Energy	0.4	0.2	0.1	0.2	0.1	0.2	0.3	3.1
Commodities Less Food and Energy	0.3	0.2	-0.1	0.1	0.0	0.2	0.2	1.2
New vehicles	0.0	-0.1	0.1	0.0	-0.3	-0.3	0.0	0.4
Used cars and trucks	2.2	0.9	-0.7	-0.5	-0.5	-0.7	0.5	4.8
Apparel	-1.4	0.6	0.4	-0.2	-0.4	0.4	0.1	-0.2
Medical care commodities	1.2	0.1	-1.1	0.4	0.6	0.1	0.1	0.1
Services less energy services	0.5	0.3	0.1	0.3	0.2	0.3	0.4	3.6
Shelter	0.4	0.3	0.2	0.3	0.3	0.2	0.2	3.7
Transportation services	1.8	-0.8	-1.4	0.1	-0.2	0.2	0.8	3.5
Medical care services	0.0	0.3	0.5	0.5	0.2	0.6	0.8	4.3
*Ended July 2025 Source: Consumer Price Index Summary, U.S. Bureau of Labor Statistics (BLS)

References

Bureau of Labor Statistics. “Consumer Price Index Summary.” Economic News Release. Published August 2025.

Ribera, Luis, and Landyn Young. “How is the Consumer Price Index Impacted by Trade Talks.” Southern Ag Today 5(34.4). August 21, 2025. Permalink

August 21, 2025

Next Year’s Cotton Market Possibilities

Longer run price outcomes for the 2026 crop will be influenced by expectations of supply and demand. A major supply-related question is how much 2026 acreage will be planted to cotton. The price of competing crops, relative to cotton prices, is an important consideration to the level of planted cotton acreage. Figure 1 shows a fairly strong relationship between the level of U.S. upland and pima cotton planted (as measured on June 30) and the ratio of December CBOT corn futures and ICE cotton futures during the first quarter of the year. The higher the ratio, the less cotton is planted.

Of course, there are other important competing crops as well, e.g., sorghum, soybeans, and peanuts. There are non-price influences, including how dry it is in Texas, the insurance base price, fixed cost influences, and the psychological influence of the preceding growing season. But the price ratio of corn to cotton appears to capture a lot of these other influences in explaining variations in cotton plantings.

What does Figure 1 imply for 2026? As of early August, the Dec’26 CBOT corn/Dec’26 ICE cotton price ratio is roughly 6.5 (i.e., $4.50 corn divided by 69-cent cotton). Assuming this ratio prevails during Q1 of 2026, it is historically associated with between 10.0 and 10.5 million acres of all cotton.

Assuming 10.0 million acres of all cotton in 2026, and further assuming ten-year Olympic averages of U.S. all cotton abandonment (21%) and yield (869 lbs) per harvested acre, the result is a healthy crop of 14.3 million bales. This combines with NASS’s August 12, 2025 projection of 3.6 million bales of carry-in for a 17.9 million bale supply. Further assuming 14.2 million bales of total use, the result is under four million bales of ending stocks of U.S. cotton in 2026/27. That outcome is neutral for prices as it represents static year-over-year ending stocks.

Caveats. Obviously, the analysis above depends on price ratios which may change between now and early 2026. Furthermore, the price ratio approach to forecasting planted acreage will be replaced by grower survey results, beginning at the Beltwide Conference (January 7) and continuing with the National Cotton Council’s survey release (February 9) and United States Department of Agriculture’s Prospective Plantings report (March 31) and Acreage report (June 30).

The National Oceanic and Atmospheric Administration’s Climate Prediction Center forecasts equal chances for continuing ENSO-neutral conditions or the development of La Niña conditions during the winter. The latter would imply more dryness and higher abandonment during 2026.

Data Sources:
Historical June 30 planted all cotton acreage data from https://www.nass.usda.gov/Quick_Stats/
CBOT Dec corn and ICE Dec cotton futures settlements compiled from www.barchart.com

Robinson, John. “Next Year’s Cotton Market Possibilities.” Southern Ag Today 5(34.3). August 20, 2025. Permalink

August 20, 2025
Tariffs and Trade in the Lamb Market

Tariffs and trade have been a big topic across the economy and agriculture.  In the lamb industry, tariffs have been controversial, with producers on both sides questioning their necessity.  The lamb industry is a smaller agricultural sector in the U.S. but one in which there has been some growth in the South, particularly since the introduction of hair sheep breeds.

Some Historical Context

Lamb imports have been a controversial topic for many years.  Surging imports in the early 1990s led to investigations by the U.S. International Trade Commission (USITC) on unfair trading practices by Australia and New Zealand.  Tariffs, as a remedy for rising imports, were not imposed and domestic production continued to decline.  (As an aside, part of my PhD dissertation research, longer ago than I would like to admit, looked at the potential impact of a 10 percent tariff on imported lamb).  By 2006, imports exceeded domestic production.  In 2024, lamb and mutton imports amounted to about 70 percent of total supplies on the U.S. market.

Almost all, over 99 percent, of imported lamb and mutton comes from Australia and New Zealand.  About 75 percent of imports are from Australia.  New Zealand has made up a declining share of U.S. imports over time.  In 2024, about 85 percent of the total product coming in was lamb and the rest mutton.

This Year

The lamb industry in the U.S. is evolving with the growth of non-traditional markets and some growth in demand.  Increasing production in recent years is linked to grazing solar properties where the economic incentive for growth is on the grazing services side and not necessarily driven by meat demand.

Compared to record imports in 2024, monthly imports in 2025 have been mixed.  Imports tend to peak in Spring as Easter and other holiday driven demand boosts prices.  This year was no exception as imports peaked in April with Easter falling on April 21^st.  A 10 percent tariff on goods from Australia and New Zealand began in early April.  Imports declined in May and June compared to the historically high levels in 2024.

Can we attribute the decline in imports to the tariff?  It’s probably not that easy. The lamb market makes a great illustration that other market factors may be more important than tariffs.   Imports tend to decline seasonally after Easter.    Relative prices in the trading countries are also important.  Lamb prices have been rising in Australia and recently hit record highs for live lambs.  Leg of lamb prices for comparable Australian and U.S products indicates that Australian prices have been rising relative to U.S. prices since 2024.  Relatively more expensive Australian lamb would likely reduce some imports.  The U.S. dollar has been weakening versus the Australian dollar over the last 4 months which should also lower imports. All of these things, along with the new tariff, are impacting lamb imports.

A lot of other questions remain about tariffs on lamb.  Is this tariff high enough to help the domestic industry and what would be an effective tariff?  How much would higher tariffs hurt consumption?  If tariffs resulted in higher lamb prices for producers, would we respond by producing more lamb and causing prices to decline?  The impact of tariffs will be interesting to watch approach next spring.

Anderson, David. “Tariffs and Trade in the Lamb Market.” Southern Ag Today 5(34.2). August 19, 2025. Permalink

August 19, 2025

Hired Farm Labor Trends

U.S. agricultural producers use hired farm labor for field crops, livestock, and nursery operations, for grading and sorting of agricultural products, for supervisory roles, and other areas. According to USDA’s Economic Research Service (ERS), mechanization led to greater productivity and a reduction in the need for labor, both self-employed farm operators (including family members) and hired workers, from 1950 to 1990. Since 1990, however, U.S. employment of agricultural workers has stabilized. For the 1950 to 1990 period, labor from self-employed and family members experienced a greater decline (74 percent) than hired farm labor (51 percent reduction). Even though hired farm labor comprises only one percent of all U.S. wage and salary workers, hired labor is important for agriculture to succeed (USDA/ERS, 2025).

Table 1 contains census of agriculture data for the number of hired farm laborers and farms with hired farm labor from 2012 to 2022, along with the ten-year average change for the southern states. There should be no surprise that all southern states have witnessed a decrease in both workers and farms with hired farm labor (for Maryland, the number of farm workers is essentially flat, but farms with hired labor are declining). Kentucky leads in the loss of hired farm labor over the ten-year average at -23.2%, followed by Oklahoma (-18.1%). Kentucky also leads in the decrease in the number of farms with hired farm labor at -18.7%, followed by Mississippi (-16.6%). For Kentucky during this timeframe, there was a shift away from tobacco production, a highly labor-intensive crop. Florida and Georgia have lost the fewest workers as measured by the ten-year average (USDA/NASS, 2025a). The prevailing reasons for the decrease in hired farm labor are the aging of the farm workforce, the lack of new immigrants entering agriculture, the displacement of labor by technology and machinery, costs, a lack of interest, and a preference for a better life-work balance.

Table 1. Number of Hired Farm Laborers (Workers) and Farms with Hired Farm Labor for Selected Southern States
	2012		2017		2022		2012-2022 Ave Δ
State	Workers	Farms	Workers	Farms	Workers	Farms	Workers	Farms
Kentucky	68,586	19,586	52,701	16,530	40,464	12,939	-23.2%	-18.7%
Oklahoma	51,119	18,108	42,431	16,794	34,323	13,181	-18.1%	-14.4%
Mississippi	32,307	10,581	27,166	9,105	21,936	7,345	-17.6%	-16.6%
N. Carolina	78,012	14,469	67,496	12,492	55,536	10,464	-15.6%	-14.9%
Virginia	46,561	12,718	39,657	10,954	33,719	8,969	-14.9%	-16.0%
Alabama	32,948	11,216	26,136	9,881	24,228	7,850	-14.0%	-16.2%
Texas	160,392	56,401	143,763	50,892	120,468	40,327	-13.3%	-15.3%
Tennessee	42,737	15,071	40,056	14,170	32,240	11,222	-12.9%	-13.4%
Louisiana	26,632	7,838	23,019	6,789	20,863	5,951	-11.5%	-12.9%
S. Carolina	23,398	5,851	20,938	5,254	18,730	4,449	-10.5%	-12.8%
Arkansas	33,104	11,715	29,047	10,373	28,162	9,051	-7.7%	-12.1%
Georgia	51,156	12,258	48,972	11,737	44,537	9,891	-6.7%	-10.0%
Florida	107,192	13,291	96,247	12,207	96,588	11,680	-4.9%	-6.2%
Maryland	14,705	3,536	15,143	3,410	14,820	2,992	0.4%	-7.9%
Source: Censuses of Agriculture

The 2022 agriculture census indicates that hired farm labor ranked third in a ranking of production expenses for southern states, preceded by feed purchases and livestock and poultry purchased/leased (see Menard SAT “Census of Agriculture Production Expenses for Southern States, 11/11/24). For all farms, data from the most recent agriculture census indicate that wages and salaries plus contract labor are 12 percent of production expenses. However, this percentage increases to 42 percent for greenhouse and nursery operations and 40 percent for fruit and tree nut operations. For immigrant labor costs in dairies and nurseries, costs as a share of gross revenues are near their 20-year highs. Hired farm labor wages vary by state and farm region. For 2024, the hourly wage rates for hired farm labor in the southern states range from $15.25 (Arkansas, Louisiana, and Mississippi) to $19.15 per hour (Maryland). For that same timeframe, hired farm labor ranges from $14.86 to $18.13 per hour for crop operations and $14.73 to $17.51 per hour for livestock operations (USDA/ERS, 2025; USDA/NASS 2025a & 2025b).

For 2022, the most common agriculture operation type for each state where hired farm labor was utilized is indicated in Table 2. The table also provides information for each state on the operation type having the largest hired farm labor production costs. For example, beef cattle (NAICS 112111) farming was the most common operation type for hired farm labor in Alabama, Kentucky, Oklahoma, Tennessee, and Texas. Greenhouse, nursery, and floriculture production operations had the highest hired farm labor production costs for Alabama, Florida, Maryland, North Carolina, South Carolina, Tennessee, and Virginia.

Table 2. Most Common Operation Type for Hired Farm Labor and Largest Hired Farm Labor Production Costs for Selected Southern States, 2022
State	*Most Common (NAICS)*	*Largest Production Costs (NAICS)*
Alabama	Beef Cattle (112111)	Greenhouse, Nursery, & Floriculture Production (1114)
Arkansas	Oilseed & Grain Crops (1111)	Oilseed & Grain Crops (1111)
Florida	Greenhouse, Nursery, & Floriculture Production (1114)	Greenhouse, Nursery, & Floriculture Production (1114)
Georgia	Fruit & Tree Nut Farming (1113)	All Other Crop Farming (11194/11199*)
Kentucky	Beef Cattle (112111)	Other Animal Production (1129**)
Louisiana	Oilseed & Grain Crops (1111)	Oilseed & Grain Crops (1111)
Maryland	Greenhouse, Nursery, & Floriculture Production (1114)	Greenhouse, Nursery, & Floriculture Production (1114)
Mississippi	Oilseed & Grain Crops (1111)	Oilseed & Grain Crops (1111)
N. Carolina	Greenhouse, Nursery, & Floriculture Production (1114)	Greenhouse, Nursery, & Floriculture Production (1114)
Oklahoma	Beef Cattle (112111)	Beef Cattle (112111)
S. Carolina	Vegetable & Melon Farming (1112)	Greenhouse, Nursery, & Floriculture Production (1114)
Tennessee	Beef Cattle (112111)	Greenhouse, Nursery, & Floriculture Production (1114)
Texas	Beef Cattle (112111)	Beef Cattle (112111)
Virginia	Greenhouse, Nursery, & Floriculture Production (1114)	Greenhouse, Nursery, & Floriculture Production (1114)
Hay and peanut farming*Horse/equine productionSource: Censuses of Agriculture

There are a couple of interesting trends moving forward that may affect southern states and the use of hired farm labor. Long-distance migrations from home to work are declining —farmworkers are more settled. Fewer farmworkers are pursuing the seasonal follow-the-crop migration. Also, women as farmworkers is an increasing trend. (USDA/ERS, 2025; USDA/NASS, 2025a).

Reference

USDA Economic Research Service (ERS). 2025. “Farm Labor.” Available at https://www.ers.usda.gov/topics/ farm-economy/farm-labor.

USDA National Agricultural Statistical Service (NASS). 2025a. Census of Agriculture Reports. Available at https://www.nass.usda.gov/AgCensus/index.php.

USDA National Agricultural Statistical Service (NASS). 2025b. “Quick Stats.” Available at https://quickstats.nass.usda.gov/

Menard, R. Jamey. “Hired Farm Labor Trends.” Southern Ag Today 5(34.1). August 18, 2025. Permalink

August 18, 2025

High Voltage, Higher Stakes: When Data Demands Your Dirt

Over the past five years, the number of data centers has doubled in the U.S.  The U.S. currently accounts for roughly 54 percent of total global data center capacity.  The number of data centers will only grow in the U.S. over time as we see more computing turning to artificial intelligence-based systems.  These data centers can bring economic benefits to the local economy but can also create additional problems in the areas where they are built.  If states make a push for data centers to develop in an area, this can increase power needs within that area, which will lead to increased infrastructure needs (such as transmission lines) to support the power needs of these data centers. New transmission lines may target your property.  With that in mind, let’s talk about what eminent domain is, why power companies have the right to utilize it, and what landowners should consider when presented with a notice.

The power of eminent domain comes from the U.S. and state constitutions, which allow governments or companies that have been granted eminent domain power by the government to take private property for public use, with just compensation. The law requires owners to be paid fair market value.  State legislatures often provide the power of eminent domain for easements to certain entities that provide a public service.  These private entities are frequently electric, gas, and cable companies.  When the use of eminent domain results in an easement being taken for a transmission line, the analysis of just compensation will depend on the impact on the property from the taking.  This is often not an easy analysis and will require experts to determine the impacts on the dominant estate.

This entire process is driven by state law; it’s hard to do a basic overview for that reason.  What should landowners do when presented with notices that their land might be in a proposed transmission line path?  First, do not delay responding to the request, and look for competent legal representation with experience in eminent domain actions.  You can also talk to neighbors or other trusted advisors to get ideas on reasonable attorneys in your area.  An eminent domain attorney will understand how to assist you in intervening in any state processes to determine the route, understand the experts needed to help determine fair market value when looking at the value of the easement, and assist in drafting terms to protect the land in the easement document.

No one wants to get the notice in the mail that their property might be taken for a transmission line easement.  As we continue to see states make pushes for the development of data centers, we may see a rise in the need for increased transmission lines.  Not sitting on the notice and talking to attorneys early can help you better protect your rights.  At the same time, it will reduce your stress and, hopefully, let you keep doing what you enjoy doing on your property.

Goeringer, Paul. “High Voltage, Higher Stakes: When Data Demands Your Dirt.” Southern Ag Today 5(33.5). August 15, 2025. Permalink

August 15, 2025

Blog

How is the Consumer Price Index Impacted by Trade Talks

Next Year’s Cotton Market Possibilities

Tariffs and Trade in the Lamb Market

Hired Farm Labor Trends

High Voltage, Higher Stakes: When Data Demands Your Dirt