Trump’s policies are driving farm prices down and bankruptcies up.
Farm prices are down, bankruptcies are up, farm equipment is getting more expensive and export markets are fading away: Is there anything to like about the impact President Trump has had on the agricultural economy of the United States?
It’s no secret that the nation’s agricultural midsection has been a haven of support for Trump. But it also has been pummeled by his policies, not least among them his truculent trade war with some of the farm belt’s most important export markets, such as China. Over the last week, fears have risen that the trade war is entering a new long-term phase.
Last November, Chinese soybean imports from the U. S. fell to zero. That’s a big hit, since American soybean farmers export half their crop and China was their largest single market, buying $12 billion of the commodity in 2017.
We’re getting a little taste now of what soybean prices will look like if this trade deal doesn’t come to fruition, and it isn’t pretty.
China instead has been buying from Brazil, raising fears that a long-term shift in its import sourcing could leave U. S. producers permanently out in the cold. The result is that soybean prices have plunged, with futures closing at $8.025 a bushel for July delivery on Monday, after falling below $8, their lowest price in a decade.
“We’re getting a little taste now of what soybean prices will look like if this trade deal doesn’t come to fruition,” University of Illinois agricultural economist Todd Hubbs said in his weekly crop report last week, “and it isn’t pretty.”
Corn and other commodity prices are also taking hits, with Bloomberg’s grain total return subindex falling to its lowest level since 1977.
Farmers are afraid the tariffs could inflict “permanent damage… on agricultural export markets,” as foreign producers sweep in to serve Americans’ foreign customers, according to Roger Johnson, president of the National Farmers Union.
The sudden intensifying of Trump’s trade war with China has the farm belt in a panic. On Monday, after China imposed a round of retaliatory tariffs on $60 billion in U. S. goods, including agricultural commodities, spokesmen for Michigan farmers complained that “the noose is getting tightened a little bit more than it was before” on Midwestern farmers as a result of the trade war.
