U.S. Farmers Suffer ‘Body Blow’ As China Slams Door On Farm Purchases

Image (2) Farm-Near-Cedar-River-300x111.jpg for post 35014

From Reuters, August 5th:

“Chinese companies have stopped buying U.S. agricultural products, China’s Commerce Ministry said on Tuesday, a blow to U.S. farmers who have already seen their exports slashed by the more than year-old trade war.

<< snip >>

China imported $9.1 billion of U.S. farm produce in 2018 – mainly soybeans Sc1, dairy, sorghum and pork LHc1 – down from $19.5 billion in 2017, according to the American Farm Bureau.

Overall, China has purchased about 14.3 million tonnes of last season’s soybean crop, the least in 11 years, and some 3.7 million tonnes still need to be shipped, according to U.S. data. China bought 32.9 million tonnes of U.S. soybeans in 2017, before the trade war.

China bought 130,000 tonnes of soybeans, 120,000 tonnes of sorghum, 60,000 tonnes of wheat, 40,000 tonnes of pork and products, and 25,000 tonnes of cotton from the United States between July 19 and Aug. 2, Cong said according to the report.”

The above are some snippets of a report from Reuters Monday that gives an idea what kind of sales loss US farmers will be looking at thanks to the current administration. Losses like that are not easily made up. 

In addition, the US labeled China as a “currency manipulator” as China let the value of the yuan fall. What exactly that will mean is a little unclear. Let’s just say that it adds more mud into a fight that already has plenty of mud being flung about.  The bottom line is that the man who is using the power of the presidency to bully another major economy is not as simple as he claimed when he stated  (March 2, 2018)“Trade wars are good, and easy to win.”

Iowa’s farmers along with farmers across the country are the soldiers who were drafted into this war. At this point in the “war” the soldier farmers are being beaten to a pulp. Much like many other recent Republican wars there doesn’t seem to be any plan for the war other than to gloat when the enemy surrenders. The whole idea of have a battle plan is non-existent.

As in all things the Republican Party has done in the past four decades they will never admit a mistake. Instead they “double down” that is make the policy even more of what is being done. This is especially true in the case of the current president who never has a strategy, declares policies on twitter and then when they fail, he simply makes them worse.

When the current president first declared the trade war, there was a lot of support from those who would be right in the middle of it. Like many other wars, those in the middle perceived this trade war would be short lived and an easy victory. Then the enemy shot back and the war suddenly became a long slog and the enemy became much more formidable than perceived. Sound like Iraq?

The administration has tried to ease the pain in the heartland by turning farming into a welfare type set up. This is yet anther really, really bad idea and certainly won’t last for long. In the Reuters article, one farmer puts it this way:

“Farmers can start applying for the next round of trade aid this month, but trade uncertainty makes long-term planning difficult.

“We’ve been thankful for the aid payments. They have helped but we’d rather have open markets because it creates stability in our financial sectors,” said Derek Sawyer, 39, a corn, soybean, wheat and cattle farm from McPherson, Kansas.”

And once again old Corporal Bone-Spurs is not on the front lines. This time he started the war but he made sure that his (and his daughter’s) businesses were exempted and he wouldn’t have skin in the game like our farmers do. Doesn’t sound like leadership to me.

As if to add insult to injury, Agricultural Secretary Sonny Perdue went to Minnesota last Wednesday to try to blow some smoke in the eyes of local farmers. They weren’t buying his load of crap:

“This is causing long-term, devastating damage to not only farmers, but rural communities,” Wertish said. He added that farmers “greatly appreciate” the administration’s aid program for farmers hurt by the trade war but said the bailout payments will cause farmers long-term political damage. “The taxpayer is not going to stand for this.”

Brian Thalmann, a farmer from Plato who is president of the Minnesota Corn Growers Association, disputed recent statements by Trump that farmers are starting to do well again.

“Things are going downhill and downhill very quickly,” he said.

Joel Schreurs, a farmer from Tyler who sits on the boards of the state and national soybean growers’ associations, told Perdue that he didn’t expect to see China back down anytime soon.

“How are you going to keep the farmers farming?” Schreurs asked. “The exports just aren’t going to be there. We’ve worked a long time to develop these markets, and we’re going to lose this market share. It’s just not going to come back in a day or two. So how do we make this work?”

As if adding the insane trade war onto the overburdened farmer who has had to endure more frequent floods and droughts wasn’t enough the Agriculture Department posted a forecast earlier this spring of a huge harvest that drove down futures prices costing farmers about $3.5 billion.    Alternate source if that one is behind a paywall.    

If that wasn’t enough, the administration has granted waivers from biofuel laws to 31 small oil refineries. This means less ethanol will be used which means less corn will be used for that purpose. According to Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw:

Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw called EPA’s decision “devastating.”

“With this action, President Trump has destroyed over a billion gallons of biofuel demand and broken his promise to Iowa voters to protect the RFS,” Shaw said.

And now just one more insult to the farmers. Secretary Perdue along with Chief of Staff Mick Mulvaney came up with a plan to move part of the Ag Department to Kansas City. The stated reason was to move Ag closer to its customers. The unstated and real reason was to Ag staffers who they couldn’t otherwise fire. This will result in a loss of expertise and researchers just at a time when climate change could be making some serious threats to the industry. 

Ag Department staffers will have until Sept. 27 to either accept the move or resign.   

As Bluto (in this case Dear Leader) said to Flounder (the farmers) in “Animal House”: “You fucked up. You trusted us.”

About Dave Bradley

retired in West Liberty
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3 Responses to U.S. Farmers Suffer ‘Body Blow’ As China Slams Door On Farm Purchases

  1. C.A. says:

    As far as I know, the polls showed that the majority of Iowa farmers voted for Trump and other Republicans. And Trump made no secret, when he was running, of his strong intention to change trade agreements. And news coverage has indicated repeatedly that many farmers have continued to support Trump over the past several months in spite of trade issues.

    And if a lot of Iowa farmers object to the proposed USDA partial move to Kansas City, I haven’t come across any stories about that. I have come across stories indicating that many big national farm groups, including the Farm Bureau to which many Iowa farmers belong, are enthused about Trump’s proposals to devastate the Endangered Species Act.

    Short version, I do feel strong sympathy for the farmers who did not support or vote for Trump. For the many farmers who did, not nearly so much.

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    • Dave Bradley says:

      I believe that you are correct that Iowa farmers supported and still support Trump. All I was pointing out was the old saw of “with friends like this, who needs enemies?”

      As for the USDA move to Kansa City, I have not heard much comment outside of those who will be directly affected and a few experts on governmental affairs. Many of the experts fear is that research that may be essential to farmers will be slowed, even stopped with the expected losses of scientists. Farmers probably have no concept of what may happen. Unfortunately when they will be looking for help it won’t be there.

      Of course the bad thing about Endangered Species us that once they are gone, they are gone forever.

      Thanks for the comments. Sorry I was so long in responding. We had quite a busy weekend.

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      • C.A. says:

        When I reread my comment, I realized it sounded as if I were arguing with your post, which was not my intention. I apologize. Your post was reporting on realities. It’s the realities that I find frustrating, including the reality that so many Iowa farmers continue to support policies and politicians that/who are not only making farming difficult now, but will make it harder in the future.

        I don’t know how many farmers know the implications of the move to Kansas City. I’ve heard some definite concern among Iowa conservationists. I also heard late last week that one reason for the move was pressure from Kochland. I’m not sure what term is the proper one to use for the dark political force fueled by the Koch conglomeration of companies and think tanks. But since a good explanatory book called KOCHLAND was just published, that word works for me.

        As an aside, I was told that at a recent farmer meeting, Sonny Perdue told a joke about how, if you have two farmers in a basement, you have a “whine cellar.” He got booed.

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