LIMA —Nick Heitz, an Auglaize County farmer we spoke with in 2018 when the president’s trade war began, voiced concerns back then about the 25% tariff on agricultural products.
Heitz farms 1,400 acres of corn, 1,400 acres of soybeans and 230 acres of wheat on his property on Buckland Holden Road.
Today he’s struggling on how he’s going to break even, let alone make a profit.
“I think it’s farmers keep holding their breath. I don’t know how much longer, how many years it’s going to take. Like I said, this trade thing could go on for years,” Heitz said.
The uncertainty of everything is making it difficult to make decisions.
“It’s about impossible to make any good marketing decisions when there is an unknown that can sway this thing hugely. Corn is above $3 today for fall delivery. I don’t know whether I should sell or what I should do because of the fact if China were to truly buy a lot and the price went way up. But talks just go back and forth and China’s able to get a few sales here and there, cheaply priced. Then I sort of sold my ground or grain. There’s no way I can make a sound decision today,” Heitz said.
The president’s ag. policies have had an effect on the market
Since Donald Trump took office, American farmers have had to deal with lower prices for their goods brought on by a trade war with China.
When the president started the trade war by limiting Chinese imports into the U.S., China replied by stopping purchases of American agricultural products, cutting out a huge market for farmers here and bringing down prices dramatically.
A phase-one agreement was signed with China to reopen trade but the levels aren’t back to normal.
“We’re not getting anywhere near the volumes that that trade deal promised,” said Ty Higgins, spokesman for the Ohio Farm Bureau.
According to an Associated Press article from Aug. 17, “The Peterson Institute for International Economics, which has been tracking China’s purchases, found this month that U.S. exports of goods to China should have totaled $71.3 billion from January through June to be on track to reach this year’s target under the phase-one deal. Instead, they topped out at $33.1 billion, only 46% of what they should be. The shortfall in promised Chinese purchases of U.S. farm products is even bigger. Those purchases totaled $6.5 billion, only 39% of purchases that should have reached $16.7 billion through June,” the AP reported.
It’s a situation made worse by the COVID-19 pandemic.
“COVID-19 did happen and we did see a major cut in what we expected with trade with China. But at the same point, you know, it’s important that we continue to trade and we are seeing now, movement of soybeans, movement of pork, you know, China was the third-largest market for us ag exports in 2019. So they are vital to American agriculture,” Higgins said.
Both sides rely on trade with each other.
“We need their goods and we need their business in order to maintain a strong agricultural economy here in the U.S. and we are starting to see movement. They have purchased a large sum of soybeans over the past month. We’re starting to see some pork move as well, albeit slower because we’re having pork supply issues here at home. So we need to get those figured out before we can start shipping what we need to our trading partners across the world,” Higgins said.
If it weren’t for the government stepping in and giving farmers relief money, things would be a lot worse.
“We’ve done two major rounds of facilitation payments that have injected, I think one of the numbers I saw was somewhere around $23 billion in the farm economy,” said John Navin, Dean and Professor of Economics at The James F. Dicke College of Business Administration at Ohio Northern University. “The idea is that if China is going to up their demand for products, we would expect to see an increase in crop prices and that’s kind of what people have been banking on is that crop prices are going to return. So soybean prices were depressed because before the phase-one deal and the tariffs, China wasn’t buying beans, and they weren’t buying as much corn as they had previously. So if they can get those up and increase demand that what you expect to see as an increase in crop prices, and that’s going to translate into an increase in income, which is going to mean less of a need for facilitation payments.”
That may be enough to keep many Trump-supporting farmers happy.
“My sense is that many don’t like the uncertainty, but the government subsidies seem to have staved off any kind of rebellion among farmers against Trump,” said Rob Alexander, political science professor at Ohio Northern University. “But…it would seem that those bailouts are unsustainable for the long-term and maybe even the short-term.”
Farmers, don’t want to count on what amounts to a welfare check
“I wish the government would get out of it and stay out of it completely,” Heitz said. “Let the chips fall where they fall with any business, but the government will never get out of it because they want the price of food to be wherever to control the voters.”
But many will gladly take the checks from the government.
“If the differences in getting a facilitation payment, and not being able to make your mortgage on a farm or your equipment. While it’s not optimal, it works in the short run. You don’t want to die on your sword for philosophy, you still have to run your family business,” Navin said.
The checks came at the right time to correct the trade imbalance and consequently an unanticipated pandemic.
“When it comes to a pandemic, it wasn’t just farmers in their markets that were disrupted. Every household was disrupted. Jobs were lost. Careers were furloughed,” Higgins said. “As we talked about the stimulus package that helped all of us that aren’t in agriculture, we got those checks in the mail because we might not be getting a check for our work and that’s the same thing that happened here with the COVID-19 Food Assistance Program. It’s helping those farmers that normally do get that checks from the consumer for selling their goods and making an honest living. All of a sudden, that market went away. I mean, it was diminished by half. And so it was important for the federal government to step in and help those in our in agriculture and outside of agriculture to get through this unprecedented COVID-19 pandemic”.
The politics of Trump’s ag policies is noticed in the Midwest.
Chris Gibbs, a Shelby County Farmer owns and operates 560 acres where he raises corn, soybeans and alfalfa and he and his son also raise cattle.
He was also a Republican and even served as Shelby County Republican Party Chairman.
He’s changed his tune and now identifies as an Independent.
“When I look around my community, my state, I see farms deeply in debt and increasingly reliant on federal government subsidies and while he talks a good game, Donald Trump’s vision for agriculture doesn’t seem to offer any change to these trends. It’s disrupted our trading relationships on every front from China to the EU to our closest North American partners Canada and Mexico. It’s a war on trade and it has not resulted in significant improvements for American agriculture that we couldn’t have achieved through allied cooperation. Rather, they seem to be manufactured crisis done for Donald Trump’s own personal political game to look tough without moving forward with a vision on a sustainable long-term trade policy,” Gibbs said.
Making a profit remains difficult for farmers.
“Every farmer — corn farmer and soybean farmer across the nation, corn specifically was poised to take a minimum of $100 loss on every acre across the nation and the president continues to tell me that I’m a patriot, for taking one from the team. For — the — team. That’s an insult,” Gibbs said.
Democrat Shannon Freshour, the Democratic candidate for Jim Jordan’s seat in the U.S. House of Representatives, is concerned about the future of Ohio farms.
“We’ve got an almost a perfect storm in farming with bad trade policies with an economy that was already starting to make a nosedive and then you’ve got a once in a century pandemic, which is affecting everything and it’s really really awful because there’s such food insecurity and then we have farmers being forced to dump milk and things because they don’t have a delivery system that can go to supermarkets because the stuff was earmarked for restaurants and schools and isn’t sellable to grocery stores,” Freshour said. “All of the dangerous horrible decisions that were made — hurting especially small farmers in Ohio and across the state, across the country. Then you add this once in a century pandemic on top of it, it’s just horrifying.”
Bankruptcy rates among U.S. farmers jumped 20% in 2019. That’s an eight-year high and it could go even higher by the end of 2020. Recent federal data indicates around 580 farmers filed for chapter 12 bankruptcy in a 12-month period that ended June 30.
Freshour is concerned about corporate farming pushing the small farmer out of business.
“Small family farms, especially in our district, they’re the bedrock of our communities,” Freshour said.
Congressman Jordan backs Trump
Congressman Jim Jordan, R-Urbana, has staunchly supported the president in a wide range of issues, including agriculture and his trade war against China.
“This president is willing to stand up to China — who steals America’s intellectual property, who doesn’t adhere to international trade norms. He’s the first president to stand up to China in a host of ways, whether it’s manufacturing whether it’s intellectual property or trade issues, trade concerns,” Jordan said. “I think most farmers understand that this is something that has to be done long term and they are supportive of that because the president’s been doing that, and these issues take time.”
Jordan says that the president is simply fulfilling promises he made.
“The President is doing what he said he would do, who’s standing up to China, and looking to put America first when it comes to all our trade, trade agreements and trade policies, as evidenced by the new NAFTA agreement that they actually got through,” Jordan said.
Jordan says that farmers he’s spoken with realize that the president has their best interests in mind.
“Every farmer’s a small business owner, so they appreciate the tax cuts that we got through under the president’s leadership. They appreciate the reduction in regulations. As I said, every person in agriculture is a small business owner. Some of them some of them have a large operation. So they appreciate their production regulation. They appreciate the reduced tax burden. They appreciate the fact that prior to the Coronavirus, we had one of the strongest economies in history. wages were up. market was was up — lowest unemployment. I think they appreciate those overall economic conditions that were created by the leadership of President Trump specific to China and trade policy,” Jordan said.
Senators Brown and Portman weigh in
Oho’s senators have divergent views on how the president’s policies have affected area farmers.
“The Trump administration continues to turn its back on Ohio farmers by putting wealthy investors and Wall Street speculators ahead of family farms,” Sen. Sherrod Brown (D) said. “Ohio farmers need the relief this year, particularly after the Trump administration’s empty promises on trade policy with China, its continued efforts to undercut the Renewable Fuel Standard, and the hit Coronavirus has taken on the economy. By mismanaging these payments to farmers, the Trump administration has continued to play favorites and is betraying the small farmers who need help the most.”
Sen. Rob Portman (R) wouldn’t directly comment on this story but did issue a statement through Meghan Dugan, a spokesperson for the senator.
“Ohio farmers have seen excessive amounts of rain, increased tariffs, and more recently have had to face the impacts of the coronavirus pandemic. Senator Portman has fought to support Ohio’s farmers and agricultural industry, including by supporting the 2018 Farm Bill which President Trump signed into law. This bill helps promote economic development and job creation in our rural communities while providing Ohio farmers with the certainty and predictability they deserve. Senator Portman also supported the U.S.-Mexico-Canada Agreement (USMCA) and worked with the Trump Administration to modernize NAFTA so that it works better for Ohio workers and farmers, including opening markets in Canada and Mexico for Ohio agricultural products like dairy and poultry,” Dugan stated.
The USDA defends Trump
The United States Department of Agriculture responded with this statement when we sought comment on how the president’s policies have affected the farm economy.
“America’s farmers, ranchers, and producers are American patriots and through their enormous productivity and knowledge of the land, they have allowed the American people to enjoy the lowest cost of food in the developed world. Recently, farmers have fallen on tough times due to unfair and illegal trade retaliation from foreign nations as well as economic impacts stemming from the coronavirus pandemic. Recent estimates indicate damages to the US agricultural sector from the pandemic alone could be as much as $50 billion over the next two years. President Trump is committed to ensuring America remains self-sufficient in agricultural production and will not let the United States be dependent on foreign nations for our food. The President has issued billions of dollars of support to ensure American agriculture remains financially viable. Farmers, much like other hardworking Americans, want trade, not aid. That is why President Trump has launched a worldwide initiative to fix broken trade deals and ensure all Americans enjoy free and fair trade with countries around the world. New deals like the USMCA, phase-one with China, KORUS, Japan Trade Agreement, and ongoing negotiations with the United Kingdom, the European Union, and others have broken down longstanding barriers to trade and opened new doors for our safe, wholesome, and affordable goods to consumers around the world who demand American products.”
Reach Sam Shriver at 567-242-0409.