Agriculture Matters – Classic Rock Version

By David Gray

You better stop, look around

Here it comes, here it comes, here it comes, here it comes

Here comes your nineteenth nervous breakdown

The Rolling Stones, 19^th Nervous Breakdown, 1966

Two things are certain. For sure the Rolling Stones were not thinking of the plight of farmers when they wrote these lyrics. But equally certainly the loss of access to international markets caused by tariffs (especially for soybean growers), low corn prices¹, the uncertainty of any U.S. administration response and the resultant strain across the U.S. row crop sector must make them highly relatable to growers. Likewise the general bafflement at the strange logic of $40 billion in support for Argentina and the opening of the U.S. market to imports of Argentine beef at a time when they are active competitors to U.S. soybean growers and now U.S. ranchers (the latter currently enjoying robust beef prices). West Coast farmers will likely feel similarly, for example, as they consider ploughing in vines due to declining wine consumption and low grape prices². If you read my July article, We are all risk managers now, you will know that I think there are moments when art mimics life. This remains one such moment. 

I know nothing stays the same

But if you’re willing to play the gameIt’s coming around again

Carly Simon, Comin’ around again, 1987

Going out on a limb here, the past few weeks have seen multiple specialist and generalist news outlets publish or broadcast reports on the challenges facing U.S. farmers because of the tariffs imposed by the United States. These range from the Wall Street Journal, the New York Times, CNBC, MSNBC and other television networks, including Fox News³, to more sector-focused ones like POLITICO Weekly Agriculture, AgAmerica, farms.com and more. As at time of writing, talk of a bailout from the government has not yielded action. And no bailout for farmers can, over any extended time, be deemed a replacement for international market access, open/free trade and stable supply chains. On October 23, we were treated to an example of trade policy being driven by dislike of an TV commercial. As Alice would say ‘It gets curiouser and curiouser.’

This is, in many respects, a rerun of 2017 – 2020. More broadly, there is a case to be made that populism has not really been a net positive for domestic farmers either in the U.S. or the UK. It has been estimated that as many as 90 percent of farmers voted Republican in the 2024 U.S. election and about 65 percent of British farmers voted for Brexit. Outcomes have been less than the campaigners promised, by any measure. According to the most recent available UK government data, in 2021/2022, based on the Net Farm Income, just over one-third of farms in the UK fell into the lower income brackets (less than £20,000, approximately $26,000) for the year while 19 percent of farms failed to make any profit at all. For clarity New Farm Income adjusts Farm Business Income for an imputed rental of a house and unpaid labor, excluding farmer and spouse⁴. In other words, it is an attempt to capture a more complete cost structure, in the same way as imputing a lease rate for land that is owned is important for determining overall return on capital employed.

Out here in the fields

I fight for my meals

I put my back into my living

The Who, Baba O’Reilly, 1971

If the business of farming is to feed the world, then the stakeholder universe is overwhelmingly disconnected from on-farm realities. World Bank data suggest that as of 2024 just under 58 percent of the global population lived in urban areas, up from about 30 percent in 1960⁵. Forecasts from the United Nations are that this figure will reach 68 percent by 2050. If we want to risk perhaps a very small generalization, there is an 80/20 at play here: developed countries tend to have urban populations that reach into the 80+ percent; poorest countries tend to have about the inverse with urban populations in the 20+ percent⁶.

This is significant because on-farm factors across the producing world, exacerbated by external factors affecting trade and tariffs, are increasing the cost of food and inflation generally. Traders fear that geopolitics now impact markets in the same way as supply and demand used to, especially given correlations of input prices to other commodities. According to the OECD, year-on-year food inflation in OECD countries is now outstripping broader measures of inflation: food prices rose 5 percent in August, 2025, while overall inflation was 4.1 percent⁷.

Sometimes everything is wrong

Now it’s time to sing along

REM, Everybody Hurts, 1992

As increases in the cost of food outstrip overall inflation, affordability has become a central issue which is only poised to intensify as disposable household income stagnates. According to data from the OECD, in Q4 2024, despite an overall increase in household income across the 19 member countries, the picture was decidedly mixed: 9 countries saw an increase, 7 recorded a decrease and 3 showed no change⁸. Despite an increase in real household income per capita of 0.5 percent in 2024, by Q1 2025 this had fallen to 0.1 percent. Limited to no growth is expected as economic growth overall slows down.

This has multiple implications for sector participants, and societies more broadly. Factors driving inflation are complex and varied – but prone to distortion as more people globally struggle to feed themselves and their families. Visible, or more tangible, results include: supply uncertainty, oversimplification of causation, inaccurate and dubious finger-pointing by politicians, rising prices which, among other outcomes, increase theft from supermarkets (and other retailers) and deterioration in daily diets as quantity of needed calories displaces quality as a driver of food choices. Less immediately visible, but nonetheless pernicious, results are: environmental impacts, distracted and overstretched police and law enforcement, increases in nutrition-related illness and demands on health and social care systems, higher taxes/health insurance costs (depending on where you live) and ultimately reduced economic productivity. A number of these impact most directly less well-off segments of the population and, in the U.S., people without health insurance: a study by the National Institutes of Health in 2022 looked at patients at a clinic in South Florida with a mean age of about 49, and found that ‘87 percent had at least (emphasis supplied) one nutrition-related condition’ with overweight or obesity observed in over 75 percent⁹. A recent study in the UK estimated that the ‘obesity and overweight epidemic costs the National Health Service over £12.5 billion a year’ with total costs to the economy estimated at an additional £31.4 billion¹⁰. Reductions in premature deaths from smoking are increasingly being offset by increases caused by obesity and nutrition-related factors¹¹. 

Well I’ll be coming home tonight

Everything will be alright

And we’ll be looking at tomorrow

The Beach Boys, Lookin’ at Tomorrow’, 1971

Policymakers and investors should be conscious of, and anticipate the kinds of consequences that, these trends could portend. It could be argued that as farmland consolidation continues, the risk profile also increases. Quite simply, deeper pocketed owners are more attractive litigation targets. On-farm practices are certainly a part of this conversation, but the macro reality is that whoever buys or processes farm outputs will increasingly need more data to support the safety and integrity of the crop. Being ‘regenerative’, ‘sustainable’ and even ‘organic’ may be helpful, and indeed some food companies already want this identifier on their packages, in the same way as sustainability certifications are also increasingly displayed. But, at the core, this is about technology, management, and risk; in the end financial viability is the cornerstone requirement but the data will reveal all. 

1. High Production Cost Series, Part 1,‘Krista Swanson, National Corn Growers Association, August 26, 2025

2. Valley farmers abandon vineyards amidst shriveling wine industry, Brianna Byus, CBS47 KSEE 24 News, July 30, 2025

3. Farmageddon: Trump’s trade war and shutdown are crushing the heartland, Shontel Brown, October 17, 2025

4. UK Department for Environment, Food and Rural Affairs, Farming Income, February 2024

5. World Bank Group, Urban Population, 2025

6. Ibid

7. OECD Headline Inflation, October 6, 2025

8. OECD, Growth and Economic Wellbeing, May 13, 2025

9. National Institutes of Health, Rate of Nutrition-Related Chronic Diseases Among a Multi-Ethnic Group of Uninsured Adults, September, 2022

10. The Guardian, UK’s obesity and overweight epidemic costs £126bn a year, study suggests, July 2, 2025

11. The Food Foundation, September 13, 2024

About the Author:

David has been an ag investor having launched a sector specific fund in 2008 and has been an adviser to emerging growth companies and investors across the sector. He is now Sales and Growth Lead for Phlo Systems Ltd in London. Phlo offers unique solutions for commodity-based businesses including: end-to-end ERP and CTRM (commodity trading risk management), a comprehensive trade finance management platform for non-bank trade finance providers and customs clearance and compliance software and services.