Farm Bureau report: $1B hit to Nebraska from retaliatory tariffs
Dec 03, 2018
KEARNEY, Neb. – A new report from the Nebraska Farm Bureau shows retaliatory tariffs imposed by U.S. trading partners in response to U.S. steel and aluminum tariffs have cut Nebraska farm level revenue between $700 million and $1 billion dollars in 2018. The report also shows the retaliatory tariffs have cost the state of Nebraska between $164 million and $242 million in lost labor income, in addition to the loss of 4,100 to 6,000 Nebraska jobs.
In addition to identifying financial losses, the report “A Path Forward on Trade – Retaliatory Tariffs and Nebraska Agriculture,” also offers specific actions to eliminate retaliatory tariffs and secure long-term access for agriculture and other U.S. products into international markets.
“International trade is critical to agriculture. In most years the value of agriculture exports will equal roughly 30 percent of the total agriculture commodity receipts or sales for the state of Nebraska. Retaliatory tariffs make our U.S. products more expensive for international customers, meaning they buy less or buy from someplace else. This report provides a clear picture of how much we’ve lost due to those tariffs and the need to improve our trade relations,” said Steve Nelson, Nebraska Farm Bureau president.
The economic analysis in the report specifically examines the impacts of retaliatory tariffs on corn, soybeans, and hogs to the Nebraska economy. Beef is absent from the analysis as the major customers for U.S. beef like South Korea and Japan have not been subject to U.S. steel and aluminum tariffs and therefore have not implemented retaliatory tariffs.
“Fortunately for Nebraska, U.S. beef exports are actually projected to exceed $8 billion in 2018, a record high. The continued strong demand for our beef helps mitigate the losses in other commodities,” said Jay Rempe, Nebraska Farm Bureau senior economist and co-author of the report.
Using June 1, 2018 cash prices at Hastings, Nebraska, the analysis found retaliatory tariffs dampened corn prices by 14 to 21 cents per bushel and soybean prices by 95 cents to $1.54 per bushel. Similarly, the analysis found Nebraska pork price reductions in the range of $17.81 to $18.80 per head due to the tariffs.
“The total loss in Nebraska farm revenues due to the retaliatory tariffs ranges from $695 million to $1.026 billion so far in 2018,” said Rempe. “That’s roughly 11 to 16 percent of the export values of Nebraska agriculture goods in 2017.”
In terms of the broader Nebraska economy, the analysis further shows that when direct farm losses are combined with the state’s labor income losses, the total economic loss to the state of Nebraska from retaliatory tariffs climbs between $859 million and $1.2 billion.
“To put a $1.2 billion loss into perspective, every person in the state of Nebraska would need to contribute $632 to cover that volume of lost dollars. That’s a significant hit to our state’s economy,” said Rempe.
The report also recommends specific actions to eliminate retaliatory tariffs and improve market access for agriculture and other U.S. goods. Those actions include: