Senator Mike Rounds (R-SD) says he needs additional information about the dismissals and congressional notification requirements before taking a position
PIERRE, S.D. – The shutdown of the U.S. Agency for International Development (USAID) threatens agricultural markets across South Dakota, as farmers, ranchers, processors and distributors nationwide grapple with market disruptions and financial uncertainty following the Trump administration’s move to dismantle the agency’s $40 billion global assistance operation.
While specific financial impacts to South Dakota remains untallied, USAID’s closure affects multiple sectors of the state’s agricultural economy. The agency purchased approximately $2 billion annually of U.S.-grown farm commodities, including wheat, sorghum, lentils, and peas for humanitarian aid programs like Food for Peace.
“USAID often buys from grain elevators, impacting smaller farmers who may not even realize they’re part of these supply chains,” said Jordan Schermerhorn, a recently furloughed USAID contractor, in comments to AgWeb on February 14.
Nick Levendofsky, executive director of the Kansas Farmers Union, told PBS NewsHour that the Food for Peace program has fed upwards of four billion people during its 70-year existence. The program was born in Kansas and signed into law by President Dwight D. Eisenhower in 1954,
“We take great pride in especially a certain part of USAID, the Food for Peace program here in Kansas,” Levendofsky said. “It was brought about because we had a glut of commodities or grain crops here in the U.S. We were producing more than we needed and could consume.”
Senate Majority Leader John Thune maintained that USAID isn’t closing down, telling reporters on February 5 that the Trump administration has “the right to review funding and how those decisions are made and what priorities are being funded,” according to NPR.
“I think that’s true of any administration when they come in,” Thune said.
Senator Mike Rounds has stated he needs additional information about the dismissals and congressional notification requirements before taking a position. A protest regarding the agency’s mass firings and funding freezes occurred outside Representative Dusty Johnson’s Sioux Falls office on February 19, Dakota News Now reports.
In Kansas, local agricultural cooperatives already face market disruptions. “If we kept all those commodities at home, we couldn’t afford to eat,” said Kim Barnes, chief financial officer with the Pawnee County Cooperative Association in Larned, Kansas, in an interview with AgWeb. Barnes said his 2,200-member cooperative currently has 1.5 million bushels of sorghum in storage with no buyers.
Farmers and ranchers across the country report significant financial strain due to the funding freeze. Kevin Leavitt of Farmer Kev’s Organic in Maine told PBS NewsHour, “If this never goes through, we would look to lose about $45,000. And the impacts for us would be pretty detrimental.”
Levendofsky described the financial situation facing farmers as precarious. “There’s very little cushion,” he said. “Those high-cost inputs are what’s really hurting right now, the seed, the chemicals, the fertilizers, the fuel that is needed. Farm and ranch equipment is extremely expensive. And bankers are not loaning out tons of money to farmers right now.”
According to agricultural studies, federal crop programs, including commodity support and crop insurance, historically added approximately 8.5 percent to annual crop revenues in South Dakota from 1998 to 2007. The loss of USAID markets could further strain incomes.
While some land-grant universities face research funding cuts from USAID’s closure, South Dakota State University is not among the 19 institutions directly affected. SDSU continues to receive federal support, including a recent $947,200 grant from the U.S. Department of Commerce’s Economic Development Administration for healthcare initiatives.
Republican lawmakers have introduced legislation to transfer the $1.8 billion Food for Peace program to the U.S. Department of Agriculture. Representative Tracey Mann of Kansas introduced H.R.1207, which would move USAID’s food assistance functions to USDA oversight.
A federal judge temporarily paused the administration’s plans, as $489 million in food assistance and more than 500,000 metric tons of U.S.-sourced food sits in ports or transit, according to a February 10 report from USAID’s Office of Inspector General.
“It’s really hard to drive a car with two wheels,” Schermerhorn told AgWeb. “You can’t just put it on a ship. Someone has to be there to receive it and work with local non-government agencies in that country to distribute it.”
Some smaller farmers have criticized the administration’s approach. Ang Roell of They Keep Bees told PBS NewsHour: “The fact that this business I have been building for seven years, this career I have been building for 12 is now under attack by the people in the executive branch of the federal government who are supposed to look out for American interests and are instead looking out for the interests of the 1 percent.”
A 2022 study found that USAID’s $1.24 billion investment in international agricultural research between 1978 and 2018 produced about $8.4 billion in economic benefits.
