Monday, July 16, 2018
Associated Press
DES MOINES, Iowa
Even before the specter of a trade war with China and other countries threatened to cost them billions of dollars, American farmers were feeling the squeeze from fluctuating crop prices and other factors that have halved their overall income in recent years.
The threat of counter-tariffs on U.S. farm goods and the impact of President Donald Trump’s other policies on immigration and biofuels, though, have some farmers more worried than ever about their ability to continue eking out an existence in agriculture.
“No matter where you look in ag right now, you see storm clouds on the horizon and some of those are a lot closer overhead than we’d care for,” said Chad Hart, an agricultural economist with Iowa State University.
Trump’s tariff threats earlier this year against China, Mexico, Canada and European Union elicited quick retaliatory measures that depressed the prices of certain U.S. agricultural products, including corn, soybeans, pork. When $34 billion worth of tariffs against China took effect July 6 and China responded with tariffs of its own, U.S. farmers were already feeling the squeeze from lower crop prices, higher land prices and other factors.
The Department of Agriculture predicted before the threat of tariffs and counter-tariffs that U.S. farm income would drop this year to $60 billion, or half the $120 billion of five years ago. That projection is likely high, given what’s transpired since.
Don Bloss, who grows corn, soybeans, sorghum and wheat on his farm in the southeastern Nebraska community of Pawnee City, said he’s already seen a few neighbors quit farming as they struggled to make a profit even before the tariff battle began this year.
“They aren’t making money. One has said the banker is giving up on them,” said Bloss.
Per-bushel soybean prices have fallen 19 percent since early May to a 10-year low, and corn is down more than 15 percent. At current prices, most farmers lose money on corn, soybeans and pigs.
U.S. pork producers stand to lose more than $2 billion per year because of plunging hog futures prices, the result of the Chinese retaliatory tariffs, according to Iowa State University economists’ projections.
There’s no sign of a quick resolution to the trade dispute. The U.S. and China have threatened to impose 25 percent tariffs next week on $16 billion of each other’s goods. And last week, Trump announced plans to impose 10 percent tariffs on an additional $200 billion in Chinese imports by the end of August. China said it would retaliate, leaving even more U.S. farm products at risk.
Meanwhile, Trump’s hardline immigration policies have been making it even harder to recruit workers for pork producers, who have historically relied on immigrants for a third of their workforce.