How to Efficiently Allocate Production Resources for 2026
September 2, 2025 Every week — sometimes every day — brings a new headline related to tariffs. They’re on. No, they’re off. Maybe paused again. For which country this time? As I write this, a fresh proposal to raise tariffs on goods from the EU to 35% just hit the airwaves. And, as many have discovered, even a “Made in America” sticker doesn’t offer protection, since many raw materials are still sourced from outside the U.S. Tariffs themselves can be planned for, even if they’re painful. The real challenge is the current atmosphere of uncertainty, which is spooking markets, investors, and producers alike. Planning becomes difficult, budgeting even harder. The experts we spoke with all pointed to this uncertainty as a major concern, and they shared what they’re seeing – along with strategies for navigating today’s shifting markets.
Early August Brings More Questions Than Answers on Tariffs
“If demand is uncertain, supply may be your best indicator on whether to purchase now or wait. Communicating with local retailers is important to discover if products you need have potential supply risks and should be secured.” — Jon LaPorte
“I will say that I think uncertainty is the major challenge right now,” says Jon LaPorte, Farm Business Management Educator with Michigan State University Extension. “Tariffs have been a moving target for several months, raising questions about short- and long-term impacts on everything from input costs to market availability. If tariffs go up, even for a short term, it will only add to the uncertainty that already exists and raise further questions about supply, input costs, and how far out to plan any decisions.”
Rising Input Costs Hit Across the Board
Inputs for greenhouse agriculture, and for most businesses, have been subject to sharp, unpredictable price changes. “In the last two weeks, we have seen letters with price increases ranging from 2.5% on the low end to 12% on the higher end,” says Chris Higgins, President and co-founder of Hort Americas. Suppliers of low-margin materials can’t absorb additional import costs and are forced to pass those along. “If you’re talking about raw materials like calcium nitrate, which is normally a very low profit margin product, the tariff adjustment is higher on a per kilo basis,” Higgins explains. “People are budgeting for a 15% increase, hoping for less, and then praying the product does not show up with 25%.”
Complex Rules and Overlooked Exceptions
Adding to the uncertainty are the many exclusions, exemptions, and overlapping trade agreements, which are often glossed over in new tariff announcements. “Are you talking about tariffs as they’re impacted by the USMCA, or tariffs between the U.S. and Europe? Or between China and the U.S.?” Higgins asks, offering a glimpse into the complexity of the current trade landscape. The nuances of Harmonized Tariff Schedule (HTS) codes and daily changing import rates only add to the confusion.
Why Imports Are Still Essential
Some products, no matter how much we might wish otherwise, simply aren’t made in the U.S. and must be sourced from abroad. Most substrates and many key fertilizer ingredients fall into that category — we don’t have sufficient peat bogs, and much of our potassium and phosphorus is imported. Greenhouse glass and electronics are also sourced overseas. Higgins notes that while some products are assembled in the U.S., many critical components — such as LED diodes or populated PCB boards for controllers — are still manufactured in other countries, a reality unlikely to change in time to shield growers from rising costs.
Planning in an Uncertain Market
This is the supermarket set up at the loading dock at Corso’s Horticulture. One supermarket contains 61,000 plants. | Julie Hullett
We asked industry experts what they’re seeing in the market right now and gathered their best strategies for locking in supplies, managing risk, and keeping production plans on track.
“I don’t know if ‘hard to plan’ is the right phrase — I’d say it’s hard to budget for,” says Higgins. “Growers need to buy their inputs regardless. They may be holding off to try to see what’s going to be the real cost, and I see a lot of that. I think some people are slowly rolling this decision, hoping to find out what’s going to happen before they place an order. But they already know what their plan is, and they’re going to have to execute that plan.”
Timing input purchases can be a lot like timing the stock market, risky. Get it right, and you look like a hero; get it wrong, and the outcome can be costly. “With the constant threats of additional tariffs, or current tariffs’ percentages changing, consumers are likely worried that products they usually buy could increase in price or have delivery delays,” says Kyle Rhoads, Category Manager for BFG Supply. “While some products have exemptions now, customers are understandably worried that those exemptions could go away tomorrow. It’s always a good general rule-of-thumb to place orders as early as you can and get your place in line.”
LaPorte advises communicating with local retailers to identify potential supply risks for the products you need and securing them early if shortages seem likely. “If demand is uncertain, supply may be your best indicator of whether to purchase now or wait. Communicating with local retailers is important to discover if products you need have potential supply risks and should be secured.”
Jon Laporte recently published a paper Strategies for Purchasing Farm Inputs, (available as Bulletin E 3508 from Michigan State University Extension), offering practical guidance for navigating today’s pricing uncertainty. He notes that while uncertainty makes planning and budgeting harder, it also makes them more critical to an operation’s success. Asking questions such as what input price targets align with project income, how those affect cost-of-production-estimates, and whether early or late purchases carry tax implications can help growers stay ready to make quick, informed decisions when opportunities arise.
Laporte’s Strategies to Guide Purchasing Decisions:
- Break up large purchases of high-use products into several smaller buys to spread out pricing risk.
- Leverage on-farm storage to buy at favorable prices and secure supplies for future needs.
- Take advantage of early purchase or cash discounts; the largest savings are often available early in the buying season.
- Set a baseline price for each input, a target price you consider a good deal. Having this predetermined makes it easier to make quick, confident buying decisions when a supplier calls or you see a price drop.
The bottom line is that uncertainty isn’t going anywhere anytime soon. Higgins advises tuning out the noise and focusing on building trusted relationships with suppliers, rather than chasing tiny savings that may not be worth the disruption. “What my colleagues, trusted industry advisors, and close friends are doing is keeping our heads down and continuing to move forward. If you’re paying a little bit more, your competitors are also paying a little bit more. This is not a situation where you’re going to beat the system,” he says. Strong vendor partnerships, built on reliable information and fair pricing, were critical during the pandemic and remain just as important now. The goal is to stay focused on your business plan and execute what you know works.
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