Posted on March, 5, 2025 at 10:22 am
The markets have been hit hard today, with corn, soybeans and wheat all trading double digits lower into the midday session. Feeder cattle trade as much as $2.50 lower, and according to Jim McCormick, co-founder of AgMarket.net, the recent tariff developments are a big reason why.
“We knew tariffs were coming. We knew today was the day and… Boom. Here it is. And the markets are reacting negatively,” McCormick said. Although the markets have slightly rebounded from their lows, McCormick said he isn’t ready to call a bottom just yet.
McCormick explained that President Trump’s decision to impose tariffs was expected, but there’s still a lot of uncertainty about the future.
“I’m very concerned about this, folks. Historically, when tariffs go on, they don’t come off,” he noted, citing the lasting impact of tariffs implemented six years ago on China.
While some might hope that the tariffs are a negotiating tactic, McCormick isn’t convinced.
“When everything gets expensive, it slows down the economy,” he said, pointing to the escalating tensions with China, which has responded by doubling its tariffs.
“We are essentially moving into a trade war. Let’s call it what it is. It is a trade war with our three biggest buyers: Canada, Mexico, and China,” McCormick said. “They buy a lot of ag goods… and the market is going to have to figure out where this all plays out.”
The uncertainty has sparked concern across the agriculture sector, especially when it comes to livestock exports.
“Right now, we export a lot of pork to Mexico. We do export a lot of beef, some high-end beef to China. We import a lot of beef… feeder cattle from Mexico,” McCormick explained.
As for the immediate future, McCormick believes the upcoming Union address could provide some clues as to where the situation might go.
“President Trump does have a history of flipping and moving and reversing and changing course,” McCormick said. “I think the trade will be looking tonight to see if there’s any reverse course now, especially now that Mexico and China have announced their retaliatory tariffs.”
With so much at stake, McCormick fears the volatility won’t settle anytime soon.
“There’s a lot of uncertainty right now, and that’s going to keep the markets very, very volatile, I fear.”
Source: KRVN