Donald Trump’s petty trade war between the United States and China has left many farmers scratching their heads, puzzling over how to plan next year’s crops as they deal with flat-out uncertainty and the already huge losses this year.
The dispute has already cost farmers $1 billion, according to the Nebraska Farmers Report.
Simple economics show a drop in demand as farmers rake in 15 percent to 25 percent less for soybeans than what they would have yielded before Trump threw the market in turmoil.
America’s farm belt is not happy, especially when most of their crops lie in storage.
The move was Trump’s spiteful way of increasing Chinese demand with a cost-prohibitive price per bushel, while fields lay fallow and corn and soybeans are going nowhere except silos and bins, rather than feeding China.
About 2,000 U.S. and Canadian farmers last week attended Nebraska’s Farmer2Farmer conference in Omaha, most citing doubts amid crop chaos across North America, thanks to Trump’s order to withhold parts of their agricultural products this year.
Farmers Business Network organizes the annual Farmer2Farmer convention, where farmers decried the delicate balance of Chinese exports thanks to Trump’s trade spat. China responded with huge tariffs of its own on some 90 percent of U.S. agricultural output. China boycotted U.S. soybeans from July until a recent, comparatively tiny purchase this month. Nebraska was the fourth largest U.S. producer of soybeans in 2017, and the fifth largest exporter to China, according to the state Department of Agriculture.
That is expected to change in 2018, according to the department. Soybean growers may turn to corn and popcorn, a change that would rankle farmers of those crops.
Such a move will bring down corn prices and could tailspin the market, Charles Baron told the Omaha World-Herald. Baron co-founded Farmers Business Network, a company that feeds information to farmers of large and small farms to better forecast future crops and revenue.
Again, simple economics from a president who probably understands less about agriculture than a kindergartner.
Still, farmers need more than statistics, especially unstable ones, to return to profitability — and viability, for that matter. They need reliable and accessible markets. Farmers traditionally borrow money or lay out most of the money they’ve made in one year to buy seed and plant it the next.
Farmers warn that profit margins are already too thin, and a jeopardized agrarian climate would bankrupt many farmers, or at least put them on continually shaky ground.
Meanwhile, according to Bloomberg News Service, China is preparing to resume purchases in January as it works on a lasting detente with the U.S.
The Chinese government may buy 3 million metric tons of corn, according to people familiar with the deal who chose not to identify themselves.
Chinese President Xi Jinping and Trump reportedly agreed last week to resume imports in a 90-day truce.
The Chinese government is reportedly considering lifting its retaliatory 25 percent tariff on imported produce.
China’s tariff attacks struck at Trump’s farm-belt voters, who saw their agricultural shipments and commodity futures prices take a dive. Despite a truce and negotiations to repair and replace the measures, farmers will not soon forget the impact. Along with those who work for them, farmers have long memories, and most are registered voters.
Too much uncertainty is detrimental to any farmer, or any business for that matter. Who would want to go through such volitility again?