Navigating the crossroads

As Donald Trump prepares for a second term, the AgriFood sector faces both opportunities and challenges. The administration’s approach intertwines deregulation, environmental policies, immigration reforms, and trade strategies, creating a complex landscape for early-stage startups.

The duality of Trump’s agriculture agenda

Trump administration’s agricultural policy reflects a balance between Brooke Rollins’ deregulation efforts and Robert F. Kennedy Jr.’s environmental advocacy. Rollins’ free-market principles aim to streamline processes, allowing innovative products to reach markets faster. Conversely, Kennedy’s focus on sustainability encourages investment in practices such as regenerative agriculture and eco-friendly technologies.

For startups, navigating these priorities is critical. Simplified regulations can reduce time-to-market, while demand for green solutions may create opportunities in alternative proteins, soil health technologies, and water-efficient systems.

Immigration policy: straining the workforce

Trump’s immigration policies, including potential mass deportations, could intensify labor shortages in agriculture. Nearly 50% of the U.S. farm labor force lacks legal status (1), and enforcement-only policies could severely impact growers reliant on immigrant workers. For startups serving growers, these disruptions present cascading challenges:

• Financial strain: Reduced profitability for farmers could result in tighter budgets for technology adoption

• Sales challenges: Longer sales cycles and fewer viable customers might slow revenue growth for startups

• Industry ripple effects: With growers producing less or incurring higher costs, the downstream supply chain could experience delays and inefficiencies

The U.S. Chamber of Commerce has classified the agricultural labor shortage as a “crisis,” and the American Farm Bureau Federation warned that enforcement-only immigration reforms could “cripple agricultural production” and destabilize rural economies (2), (3).

Environmental rollbacks: a legacy impact

During Trump’s first term, the administration rolled back over 100 environmental regulations, including weakening the Clean Water Rule and Endangered Species Act (4). These rollbacks aimed to lower costs for traditional agriculture but created challenges for eco-conscious startups competing on sustainability metrics.

For instance, relaxed water pollution rules benefited conventional farmers by lowering compliance costs but posed risks to companies focusing on regenerative practices and water-efficient technologies. As consumers demand accountability in food production, startups must balance navigating less stringent regulations with meeting market expectations for sustainability.

Trade policies: mixed outcomes

The Trump administration’s trade policies, including tariffs on China, Mexico, and the European Union, negatively impacted U.S. agricultural exports, particularly soybeans, pork, and dairy products (5). Retaliatory tariffs reduced export revenues—U.S. agricultural exports to China dropped by 53% in 2020 (6).

While federal aid packages temporarily alleviated losses, uncertainty in trade agreements made it difficult for growers and AgriFood startups to plan effectively. Startups focusing on domestic markets or supply chain innovations may find opportunities, while those relying on international trade face potential disruptions.

Industry response and adaptation

The farming community remains divided. Organizations like the National Farmers Union have expressed concerns about policy inconsistencies leading to uncertain years ahead, while others, including the American Farm Bureau Federation, cautiously support deregulation efforts.

Early-stage startups can proactively adapt by:

• Prioritizing sustainability: Leveraging growing consumer demand for eco-friendly solutions.

• Strengthening partnerships: Collaborating with trade groups to address labor and trade challenges.

• Targeting resilient markets: Developing products that appeal to both domestic and export-focused growers.

Conclusion

Trump’s second administration presents a paradox for the AgriFood sector. Simplified regulations and market-driven policies may accelerate innovation, but challenges like labor shortages, weakened environmental protections, and trade uncertainties could limit opportunities for some startups.

The sector stands at a crossroads, where adaptability, resilience, and forward-thinking strategies will define success. Startups that can navigate these complexities while aligning with consumer trends and market needs are poised to lead in shaping the future of sustainable and innovative agriculture.

References

1. USDA Economic Research Service. (2019). Farm Labor Markets in the United States and Mexico.

2. U.S. Chamber of Commerce (2020). The Impact of Labor Shortages on the Agricultural Industry.

3. DairyHerd. (2024). U.S. Ag, Food Industry Groups Express Significant Concerns About Trump's Proposed Mass Deportation Plans. 

4. New York Times (2020). The Trump Administration’s Environmental Rollbacks.

5. USDA Foreign Agricultural Service. (2020). U.S. Agricultural Trade Data Update.

6. USDA Foreign Agricultural Service. (2021). U.S. Agricultural Exports to China: 2020 Data.