In this file:
· US farmers in Washington to seek end of the trade war with China
· Canadian and American ranchers anxiously await USMCA ratification — can we push it forward?
· Washington farmers face rising costs in ongoing trade war
US farmers in Washington to seek end of the trade war with China
Source: South China Morning Post
via Hellenic Shipping News - 08/02/2019
President Donald Trump’s trade war is magnifying some of the toughest farm conditions since the crisis that bankrupted thousands of farmers in the 1980s – and threatening a constituency crucial to his reelection hopes.
The president’s trade policies have sent US agricultural exports plunging, exacerbating already difficult economic conditions facing farmers. Average farm income has fallen to near 15-year lows under Trump, and in some areas of the country, farm bankruptcies are soaring.
The fate of the farm economy and rural America is fused to Trump’s political future. Farmers and ranchers make up the heart of his base, and their support in battleground Midwestern states like Iowa and Wisconsin could help determine the 2020 presidential election.
Although Trump’s standing with those groups generally remains strong, cracks are starting to show.
Hundreds of farmers and business representatives are in Washington this week to pressure lawmakers and the Trump administration to end the trade war by describing the hardships they are facing.
“A lot of farmers are going to give the president the benefit of the doubt, and have to date. But the longer the trade war goes on, the more that dynamic changes,” said Brian Kuehl, executive director of Farmers for Free Trade, one of the groups organising the fly-in.
There are signs that agriculture’s compounding challenges are already pushing some producers over the edge – at least in certain regions and sectors.
The Federal Reserve Bank of Minneapolis warned in November of rising Chapter 12 bankruptcies in the region, writing that the strain of low commodity prices “is starting to show up not just in bottom line profitability, but in simple viability”. The increase was driven by woes in Wisconsin’s dairy sector, which shrank by about 1,200 operations, or 13 per cent, from 2016 to October 2018.
“The farm economy’s in pretty tough shape,” said John Newton, chief economist at the American Farm Bureau Federation. “When you look out on the horizon of things to come, you start to see some cracks.”
To be sure, most experts do not think the conditions will get back to the devastation of the 1980s when interest rates soared and farmland values plummeted. That drove thousands of farms into foreclosure, closed dozens of agricultural banks and transformed some rural communities into ghost towns.
But as the 2019 planting season nears, the continuing trade war, higher interest rates and glut of various commodities could require farmers to lean on the government for relief.
Right now, the Agriculture Department is not planning any more trade aid programmes like the payments that helped farmers like Billy Rochelle get close to breaking even for 2018.
“We’ve seen better years,” said Rochelle, who raises corn, soybeans, wheat and beef cattle near Centerville, Tennessee. “We’re adjusting accordingly, trying to survive just like everybody else.”
At the annual American Farm Bureau convention last month in New Orleans, Louisiana, Trump delivered a speech to the largely supportive audience in which he boasted about “setting records together for farmers and for agriculture”. But outside the auditorium, farmers and ranchers described numerous concerns – especially the uncertainty around Trump’s trade agenda.
“I don’t see it getting any better until we get something resolved with China,” Rochelle said.
The administration wrapped up another round of negotiations with China last week, but a deal has yet to emerge. Trump’s three-way agreement with Canada and Mexico also faces a difficult road ahead in Congress.
In the meantime, retaliatory tariffs from those countries continue to weigh on crop prices – one of the biggest factors dragging down farm profitability.
“You’ve had farms that have gone out of business, that have gone bankrupt because of this trade war,” said Kuehl of Farmers for Free Trade. “There’s a lot of farmers going through tough conversations right now with their lenders.”
House Agriculture Chairman and Minnesota Democrat Collin Peterson has raised the possibility of Congress providing additional aid for farmers...
Canadian and American ranchers anxiously await USMCA ratification — can we push it forward?
February 8, 2019
There’s not a lot of change between the existing North American Free Trade Agreement and the newly minted, United States-Mexico-Canada Agreement (USMCA) for Canada’s beef industry. And the political and producer group powers that be is OK with that but wants very much to see ratification move forward. In the absence of ratification, American and Canadian ranchers alike would prefer that NAFTA remain in force, as is.
That’s not a certainty, however, and that uncertainty is weighing on the minds of both the American and Canadian cattle industries.
John Masswohl, director of government and international relations for the Canadian Cattlemen’s Association, has recently returned from the National Cattlemen’s Beef Association’s annual meeting at New Orleans, LA. He says that USMCA essentially maintains the status quo from NAFTA, in regards to the cattle industry, and that’s OK — the next big step is ratification, and if there is a way for the industry to push ratification forward, they’d do it.
“If it takes awhile to implement, that’s OK, so long as the existing NAFTA stays in effect,” Masswohl says. That’s not a guarantee, as President Trump has threatened to use withdrawal from NAFTA to put pressure on congress, and he doesn’t make empty threats, according to Masswohl...
Washington farmers face rising costs in ongoing trade war
By Thomas Clouse, The Spokesman-Review
via Ledger-Enquirer (GA) - February 10, 2019
Washington farmers can expect a tougher year covering expenses even if political leaders finalize trade agreements with the countries that import apples, beef and wheat from the Evergreen State, a Washington State University professor said.
Randy Fortenbery, an agriculture economics professor, delivered the economic forecast Wednesday at the Spokane Ag Expo and Pacific Farm Forum. He spoke at length about the troubling overall picture of the forces grinding against what has been a robust U.S. economy.
"I think commodity prices, except for sorghum, are going to be a little bit better than last year. But we are talking dimes not dollars," Fortenbery said. "I don't think the price increase will offset the cost increases."
He openly contradicted President Donald Trump, who last year said trade wars are good and easy to win.
"The biggest issue . is making some assumptions about the trade environment. It really needs to get stabilized," Fortenbery said. "I don't care whether it's big tariffs or no tariffs. People can adjust to tariffs if they know they are there permanently.
"What becomes difficult is changing the rhetoric on a weekly or monthly basis about what we are or are not going to do. That's not just a risk in agriculture, that is a risk in what has been a really healthy U.S. economy in general."
When last year Trump began threatening to place tariffs on U.S. imports of steel and aluminum, Fortenbery said, China immediately targeted two things Americans export the most: agricultural commodities and airplanes.
"We have, I'm going to argue, probably one of the most aggressive trade realignment programs since maybe the 1920s," he said. "What I mean by that is we are addressing every one of our trading partners simultaneously. We haven't done that in decades."
The problem is that large companies have operations in several countries. Some steel companies produce raw material in one place and then ship it to the U.S. to produce finished products. As a result, some face 25 percent tariffs on the same steel twice, which gets passed on to consumers.
"Winning trade wars is not easy. They don't really work," Fortenbery said...