By: Tori Trevino
In his second term, President Donald Trump began a trade war with Canada and Mexico. With these tariffs put into effect, the cost of agricultural equipment and supplies can skyrocket, affecting farmers that are already struggling with labor shortages and rising input costs.
Hylio is a Texas-based company manufacturing fully American-made, AI-powered drones designed to increase efficiency, reduce chemical usage, and cut operational costs, without relying on foreign supply chains. Hylio CEO Arthur Erickson shared what these tariffs mean for United States agriculture.
“You’re definitely going to have an increase of chemicals that go into crops, so a lot of our fertilizers and whatnot are synthesized in foreign countries,” Erickson said. “And then also just equipment. So aluminum, steel tariffs, tariffs on the raw materials that are going to farm equipment are going to increase your capital expenditures too as a farmer.”
He went on to explain how there are also retaliatory tariffs that some countries are putting on US food exports, thus creating an oversupply of commodity crops here. This makes it possible to overload the domestic market with crops like corn and soybeans, making the prices go down, and less revenue for the farmer. Then, he shared a bit about how Hylio drones help solve these issues. For one, they are cheaper alternatives in terms of cost up front. A new tractor might cost half a million dollars, while the drones cost about 60,000.
“But even on the operating side – so, we talked about chemical costs increasing, with the drones you can do precision applications,” Erickson said. “So instead of going out and spraying 100% of your acreage, the idea is that you intelligently identify the 10%, 20%, or 30% of your acreage that actually needs treatment, and then you use the drone to spot treat those areas, thus saving you, you know, 60, 70, 80% of the chemical costs you otherwise would have had to purchase for your entire field.”
With this in mind, Erickson said he would like the USDA to make it less risky to adopt this more affordable technology by subsidizing loans or grant programs. That way, they’re able to take a risk with new technology without worrying about the pay out.
He also gave some advice for farmers when it comes to taking this new technology approach in light of these tariffs, saying: “I think if they took a step back and looked at what’s come out in the last few years in drone world, just some of the A.I. or the machine learning tools that have come out, I think they’ll see that there’s some some really nifty tools these days in the tech sector that could help them be more successful and cut costs.”
These challenges are a developing issue as developments continue to be made by President Trump regarding such tariffs.