President Donald Trump’s trade disputes with China, Mexico and Canada are already eroding the value of American agricultural production, with soybean growers alone expected to lose at least $3.2 billion during the next crop season, according to a Bloomberg report.
However, many farmers, including some whose incomes are plunging as exports stall, are sticking by President Trump. Farmers are hoping that the president will win the trade war quickly, before the fall harvest starts compounding the problem in a couple of months, while congressional midterm elections also will be heating up.
“President Trump is a businessman,” said John King III, 57, who raises soybeans, corn and rice with his father and nephew outside Helena, Arkansas, about 100 miles east of Little Rock. “He’s making a high-risk business decision that probably should have been made a long time ago. But it’s definitely a risk.”
Agriculture is the third-biggest U.S. export industry and a global juggernaut that has generated six decades of trade surpluses. It has also become a flash point in tariff battles with China, which bought $12 billion of soybeans last year and now is shifting to supplies from South America. Separate duties are affecting sales to Canada and Mexico, which are renegotiating the North American Free Trade Agreement with the United States.
The U.S. Department of Agriculture on Thursday predicted domestic soybean stockpiles will be 51 percent larger than expected a month earlier and cut its export forecast by 11 percent. USDA also reduced its price forecast by 75 cents a bushel, citing reduced purchases by China, the top importer. That amounts to almost $3.2 billion in lost revenue based on the government’s use estimate.
While the situation could get worse if the trade war escalates, the president has urged patience. “Always thinking about our farmers,” Trump said via tweet Wednesday. “Other countries’ trade barriers and tariffs have been destroying” U.S. farm businesses, he said. “I will open things up, better than ever before, but it can’t go too quickly. I am fighting for a level playing field for our farmers, and will win!”
Because the U.S. exports almost a third of its agricultural production, the industry is a logical target for foreign retaliation. It is also a key group among voters in rural counties that gave Trump 60 percent of the vote in the 2016 election.
Groups representing crop and livestock producers have warned that their industries would be hurt by reduced exports at a time when they already face big inventories and lower prices. “America’s farmers and families are staring down a dark path, with no signs of relief in sight,” Casey Guernsey, a spokesman for Americans for Farmers and Families, said in a statement on July 6, when China’s retaliatory duties went into effect.
By September or October, many farmers will need to have unloaded inventories from last year to make room for this season’s harvest.
However, the slumping market has not dimmed support for Trump among some farmers. “The one thing I admire about the guy is that he’s fulfilled or tried to fulfill” his campaign promises, said David Durham, 66, who grows corn and soybeans about 40 miles east of Kansas City, Missouri. “In the long run, this could benefit us” by opening the world to more buyers of U.S. farm goods, said Durham, a fourth-generation farmer who estimates his crop revenue has been cut in half since rumbles of a trade war began earlier this year.
Still the White House is readying an aid package for producers that is set to be unveiled around Labor Day in early September, just in time for the harvest, Perdue said. Farmers are patriotic, “but you can’t pay the bills with patriotism,” Perdue said. Fighting a trade war is like going on a diet, he said. “It’s going to be good to get there, but it will be a little bit painful in the meantime.”
Chad Hart, an agricultural economist at Iowa State University in Ames, Iowa, said support for Trump’s actions may boil down to who is most willing and able to ride out the storm. Farmers “are comfortable with the objectives President Trump has laid out,” Hart said. “I don’t think anyone’s considered that they’d change their vote.”
However, farmers say they’d rather the trade conflict end sooner rather than later. Don Borgman, a third-generation corn and soybean grower from Buckner, Missouri, said he’s been “hammered” by lower prices but is “refreshed” by Trump’s get-tough approach. The president “is in negotiating mode,” he said. Still, Borgman said he’d be more concerned “if I thought our president was starting a decades-long trade war.”
