A month ago, in a meeting in Manhattan, Kansas, Secretary of Agriculture Sonny Perdue had a message for concerned farmers: they just didn’t understand Trump’s plan.
From the Wichita Eagle:
“He has, I guess I’d characterize as, a unique negotiating style that maybe sometimes we farmers don’t understand,” Perdue said. “But nonetheless he’s been pretty successful in that.”
You see, at that time, while we were negotiating, farmers, bless their little hearts, just couldn’t grasp the big picture that someone like Trump could, and they had to go along for the ride, because he knew what was best for them.
Today, as trade tariff back and forths escalated, Kansas farmers realize maybe they always did understand Trump, the New York business magnate who had drawn several of his entities into bankruptcy; because his new plan for US farmers might take them down as well. It propelled them to vote for Ted Cruz in the caucus, even though Trump was in the driver’s seat, hoping to stop him. Still, they reverted to form in the general election, after being promised he could be contained.
Glenn Brunkow, a corn farmer near Wamego, Kansas continues in the Eagle:
“There’s a lot of producers out there that this will be the end,” Brunkow said.
...
“We understand a lot of what we grow is exported and exports are our lifeblood,” Brunkow said. “We’re pretty concerned with some of the stances the administration has taken and some of the policy or guidelines.”
With global oversupply and China one of the world’s largest consumers, Trump’s plan — the one which may just be too difficult for farmers to understand — is EASY for investors to understand, it is a quick way to reduce the value of grain and put crop returns at a rate where farmers lose money on their harvest.
From Reuters:
Soybeans were hit harder because China is by far the biggest buyer, said Chad Hart, an Iowa State University agricultural economist.
"We can't find other markets through the world big enough to offset the loss of China," he said.
China said tariffs on U.S. soybeans would take effect on July 6, a blow to U.S. farmers already struggling due to global grains oversupply. Farm incomes are a half of what they were in 2013, following massive harvests that have depressed crop prices.
The problem extends far beyond grain, however, as other farm markets worry that Trump’s continued trade war will impact other agriculture products.
Wisconsin Public Radio has already voiced concerns over dairy, especially throughout North America.
"Sometimes I wonder because their policy and their strategy shifts from minute to minute and it creates a lot of uncertainty out there, not only with the countries with whom we’re negotiating but with people back home, from farmers to manufacturers and even consumers," Kind said. "These countries know how to hurt us and typically it's agriculture that they hit, many of our manufacturing products, too. These are two vital industries here in the state of Wisconsin, so we could see a disproportionate impact as a state compared to virtually everywhere else."
While the impact on this years crop will be significant, Trump’s plan could reshape agriculture investment. With lower value and fewer trade partners, investment in agriculture businesses becomes a far riskier proposition, leading grain and seed companies to wonder about planting and seed production for the next year.
Farmers who worried understood Trump far better than his Secretary of Ag, a business leader who drove his empire into repeated bankruptcy; now, his plans risk taking US farmers into debt that, as Brunkow said: “will be the end” of all but extremely large corporate farming entities that can ride out the storm.