Many farmers are still holding out hope that the U.S. and China quickly reach a trade agreement that would put an end to tariffs on agricultural products.
Unfortunately, the trend is going in the opposite direction.
“I’m very disappointed that ... the negotiations fell apart last week,” Blake Hurst, a soybean farmer and president of the Missouri Farm Bureau, said on Yahoo Finance’s On the Move. “We’ve been assured time and time again that progress was being made. We’ve yet to see any improvement. So farmers are starting to lose hope.”
On Friday, President Trump wrote on Twitter that he was following through on his tariff threat because he “got tired of waiting” for the Chinese to start buying from American farmers. By placing tariffs on China, Trump argued, China will be paying money to the Treasury and therefore helping farmers.
However, these tariffs are actually being paid by American consumers and businesses. And China announced increased tariffs hitting the U.S. heartland.
‘Farmers like to farm’
Throughout the trade spat, the Trump administration has worked with the USDA to help offset the effects of tariffs by providing billions of dollars in aid to farmers. Trump has pledged to do the same again as the U.S. and China attempt to work out a deal.
Hurst noted that previous aid “certainly did help” and more aid would be helpful, “but it’s no substitute for markets. Farmers like to farm. We like to produce. We want to have the chance to sell our product to people who want to buy it.”
Selling hasn’t gone so well for farmers in the past year. In 2018, as a result of reduced exports to China, the U.S. had the smallest agricultural trade surplus since 2006. And on Monday, soybean futures fell to its lowest level in a decade.
Part of this is because while the U.S. and China have been in a trade stand-off, China has turned to other countries, like Brazil, for beloved crops like soybeans. Even if the trade dispute is resolved, there’s no guarantee that the U.S. gets that market back.
“They developed the habit of buying from Brazil,” Hurst said about the Chinese. “They’ve developed confidence in Brazil as suppliers. It’ll take a generation for us to restore that.”
Greg Horstmeier, editor-in-chief of agriculture magazine DTN/Progressive Farmer, highlighted the importance of American farmers to U.S. communities.
“It’s what keeps the grocery stores in business and the school systems going,” Horstmeier told Yahoo Finance. “It’s a concept that’s really hard for the average consumer who truly does think, ‘I don’t need farmers. I get my food from the grocery store.’ ...
“How do you think it got to the grocery store? Those are the kind of concepts that are tough to get people to care about, but they’re sort of foundational.”
Adriana is an associate editor for Yahoo Finance. Follow her on Twitter @adrianambells.
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