Even with a tumultuous 2018 growing season behind them — a year characterized by trade disputes that affected major agricultural products nationwide — many farmers have not been able to rest easy over the winter.
That’s because key trade disputes still are very much alive, with no resolution in sight for retaliatory tariffs from China, enacted in response to President Donald Trump’s initial restrictions on steel and other select Chinese imports.
Elsewhere, even though the outline of a revised North American Free Trade Agreement was announced months ago between the United States, Mexico and Canada, that deal has yet to be ratified by Congress.
“Obviously our relationship with China, that’s the No. 1 topic from the policy side that affects my bottom line and will until we re-establish that relationship,” said Brian Martin, a corn and soybean farmer from Centralia, Mo.
Based on the latest outlook, farmers could be in for a long and nervous wait until that might happen.
“Who knows? My crystal ball broke a long time ago,” said Jon Doggett, the Washington, D.C.-based CEO of the National Corn Growers Association.
Remarks from Doggett and others came as the NCGA held a summit on soil health in St. Louis Tuesday and Wednesday.
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But in certain sessions and on the sidelines, simmering concern over trade policy was a hot topic of discussion, with multiple farmers citing it as one of the top challenges they currently face — if not the biggest.
During updates about how federal policies are being felt on the farm, Doggett fielded multiple questions about trade at the conference.
Going forward, he said it is hard to know what to expect, and indicated that it’s possible farmers may need to brace for high-impact tariffs spiraling into the following year.
“I think we will be in this time next year before we see that decision again,” said Doggett, referring to Trump administration’s move to issue two rounds of relief payments to farmers in a bid to negate economic harm from tariffs on products from soybeans to pork.
Securing a second round of payments — which, for soybeans, brought government compensation to $1.65 per bushel — was no sure thing, said Doggett, who gave “a lot of credit” to U.S. Secretary of Agriculture Sonny Perdue for bringing them to fruition.
Doggett said that agricultural spending measures often can be opposed by Mick Mulvaney, the White House’s director of the Office of Management and Budget. With Mulvaney now doubling as Trump’s acting chief of staff, Doggett said there are concerns in the agriculture community about what might happen with him as a dominant influence in the president’s orbit — particularly with a steep deficit already jeopardizing spending.
“We’re going to have a trillion-dollar deficit this year. It’s going to be hard,” said Doggett, sizing up the chances of continued tariff relief from the government, if trade tension grinds on.
If it creeps into 2020, he added that things may be made even more unpredictable amid the political “silly season” of a presidential election year.
But those in the agriculture industry face big decisions and spillover effects far sooner. While soybean farmers already have been stung by the dispute with their largest foreign market, Chinese tariffs on that commodity and others have had far-reaching consequences.
“Until the Chinese start buying soybeans like they were before, some of those acres are going to go into corn and that will affect the price for corn,” Doggett said.
He added that corn farmers, meanwhile, also are hurt by the erosion of China as a “huge market for ethanol.”
While some farmers are worried about continued tariff troubles, others are hopeful that trade relationships can be fixed by the time they need to sell their harvested crops from storage bins.
“I’m hopeful that a trade deal will happen with China,” said Joshlin Yoder, a corn and soybean farmer from Leonard, Mo., who agreed that “trade is obviously the No. 1” issue he faces.
“I’m optimistic that in the next two, three, four months, I’ll be able to sell at a better price than they currently are.”
On this side of the Pacific Ocean, at least one major trade agreement was seemingly reached months ago, but the “new NAFTA” — officially called the USMCA, or U.S.-Mexico-Canada Agreement — has not been solidified.
The agreement is not a done deal until formally ratified by Congress — a step Doggett described as “our biggest legislative battle.”
The old agreement remains in place until both chambers of Congress ratify a replacement. With Mexico ranking as the largest foreign market for U.S. corn, Doggett said that the prospect of pulling out of NAFTA without a new agreement in place “scares the heck out of us.”
Trade, though, is not the only source of drama from Washington that affects farmers. The ongoing government shutdown has ramifications, too.
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Tariff relief payments, for example, are on hold for some farmers while the gears of the federal workforce are at a halt.
“Those checks are not going to be able to come,” said Brent Hoerr, a farmer from Palmyra, Mo., who attended the soil health conference and has kept some of his crop stored away.
“I’m going to be waiting.”
It also affects farmer loan applications and crop reports that help growers develop strategies for planting and marketing, according to people such as Martin.
“Some guys are trading in the dark or maybe going to sit on the sidelines until that information is provided,” he said.
“All of that is woven into the fabric of how we do business,” added Doggett of the National Corn Growers Association.
“As much as people in agriculture complain about government, when government isn’t around, it impacts their lives and not in a good way.”
Whether thrown curveballs by Mother Nature or by government policy, Hoerr says that all farmers like him can do is try to “control the controllable” and seek to minimize their dependence on any one thing. But it’s often hard for farmers to fully buffer themselves.
“It seems like every crisis, there’s a direct link to agriculture,” he said.