China tariffs are 'worst kind of news' for Iowa farmers on the edge
There are repercussions for the entire rural economy'
Roger Zylstra harvests soybeans at one of his fields near Kellogg, Iowa, in 2017.
(Photo: Rodney White and Michael Zamora)
"Farmers are feeling a real pinch," said Heisdorffer, president of the American Soybean Association. "If we can't get these commodity prices up ... we are going to start losing farmers. There's no way of getting around it."
This year's U.S. farm income is forecast to be half of what it was in 2013, primarily driven by falling corn and soybean prices.
China's latest tariffs on $50 billion of U.S. products came hours after President Donald Trump announced tariffs on a similar number of Chinese products.
Looking at soybeans alone, the U.S. economy could lose $3 billion annually within a couple years, due to lost export markets, a Purdue University analysis shows.
Kirk Leeds, CEO of the Iowa Soybean Association, said tariffs will create "a lot of market disruption at a time when farmers can't afford any disruptions." "If we go into a long, sustained period of low prices, it will impact some farmers' ability to stay on the farm," he said.
Tags
Who is online
61 visitors
Brazil and other countries soon would take advantage of the 25 percent tariff to undercut U.S. producers.
"Brazil has the capability to expand substantially," Tyner said. "Over time, we'd lose global market share, because other countries would take advantage of the 25 percent wedge that the tariff represents."
Brazil is now the number one supplier of soybeans to China. The soybeans from Brazil have a higher protein count than the US beans. Lower price once the 25% tariff is added to the US bean, and a better bean just what in the heck do we think is going to happen..
This is truly a DUH moment.
Three sentors from farm states have spoken out very strongly against starting a trade war. I'm sure that they feel that their chances for re election are going to be damaged by this trade war...
"There are repercussions for the entire rural economy," he said.
The U.S. could lose 40 percent of its global market for soybeans, Tyner said. That would cut the need for soybean acres by about 16 percent. "Those are big numbers," he said.
"There'd be a lot of adjustment in U.S. agriculture," Tyner said, adding that falling soybean prices would depress corn prices as well, with growers switching acres.
And farmers can't play the Trump chaos game. If Trump changes his mind (what little of it their is) 5 or 6 months from now the farmers are still screwed because they have to plan their seed purchase (which can run into $100k or more) and planting months in advance and may have planted wrong based on what the moron in the White House says 5 or 6 months from now finding themselves with a huge crop of a product that there is no market for and crashing prices for it causing them a fortune! The planting season in North America is now and the major and small farmer alike needs to know or guess what crops will sell at the end of the year and Trump is screwing that up!
Farming NEEDS stability and while some of the more dedicated (brainwashed) Trump supporters say this is a negotiating strategy, the truth is that Trump is playing it day by day and not planning the trade war of HIS more then the next episode of Fox and Friends! And even if there is some remote brain cell in his skull that is saying this is a strategy, the framers are still fucked because they can not plan planting and the grain market that far in advance. And remember, they almost all voted for Trump. His trade war (and make no mistake, this is Trump's Trade War and ONLY Trump's Trade War) may change their minds!
I hear a lot of criticism of Trump's actions, and that's fine. Maybe he's not doing the best possible things. But I don't hear people offering alternatives or claiming that our trade situation with China isn't something that should addressed.
It should be addressed and I admit that I am not sure how. That said I do know it should not be addressed by gutting our agriculture business or through a Trade War that we know we can not win and we know will only result in 100,000's lost jobs for Americans and much higher prices in our country. Not knowing how to address it does NOT mean we should do "something" we know already will be disastrous for our country because it always has been when we have done it in the past (and will likely lead to a recession), just to say that we are doing "something"! Doing "something" is not a great idea when the "something" we are doing just to try to show that you are doing "something" is an incredibility fucking stupid thing to do.
“China is a sleeping giant. Let her sleep, for when she wakes she will move the world.”
(Napoleon Bonaparte)
Napoleon may have been stupid about Russia, but he certainly understood China.
It's just that when this stuff has gone on for years with the people in Washington (apparently) doing nothing about it, I kind of want to give a chance to the guy willing to do something. Like you, I was taught that things like tariffs and trade wars are generally bad, but Trump's argument is that we're already in a trade war - it's just that only China knows it.
Tacos,
I think the way Trump is going about the trade sitatuion with China is wrong. I agree there are areas that need to be addressed, but starting a trade war isn't going to end well for either side. A lot of people are going to be hurt by this and yesterday Trump doubled down by threating to add another $100 billion in tariffs.
I'm sure that China will react to that comment by Trump as well...IMO, instead of trying to act like a tough guy, which causes China to react, he should be meeting with the Chinese behind the sceens (diplomacy) to work on the areas of concern. I believe that you get more accomplished with honey than with vinagar.
I'm nervous about it, too, but I picture China as the world's schoolyard bully. They occupy some island in the ocean and no one does anything about it. They snatch one of our planes and nothing happens. They are downright famous for their human rights abuses. It's like the kid in the lunch line who keeps slapping you in the back of the head every day and everyone says to you "don't start a fight." Then Trump comes along and hits the bully with a lunch tray and suddenly he's the bad guy. I really believe China won't do anything we don't force them to do.
First Soy Beans are a Commodity so if China doesn't buy them they'll just get sold somewhere else. China will buy from someone else and whoever used to buy those Soy Beans will buy ours that's how it works with Commodities supply dictates price so the only thing that will change is the customer who buys them. Secondly We buy about 5 dollars worth of products from China for every dollars worth they buy from Us, that is the problem and because of this crazy trade imbalance China can't go tit for tat with Us on Tariffs they just don't buy enough of our products. On top of that a lot of what China buys from the USA are Commodities that don't provide a lot of jobs like finished goods do and because they're Commodities the World buys all of the supply anyway so the price will change very little long term. The only thing that makes selling Commodities to China a better deal than to anyone else is Shipping Charges since there are so many Chinese Ships that come here full but leave almost empty shipping to China is cheap.
No one will win this battle, the folks hurt will be producers and consumers the only winner may be Mr. Trumps ego.
I can be real. That ego never loses.