During Donald Trump's presidential campaign, Gene Stehly expressed concern that his international sales of corn, soybeans, and wheat could be endangered by trade conflicts, especially given Trump's promises regarding new tariffs.
TL;DR
- Farmers like Gene Stehly are concerned about trade conflicts impacting international sales of corn, soybeans, and wheat.
- Donald Trump's administration pledged $12 billion in aid to farmers facing deficits due to trade wars and low prices.
- Farmers view the aid as a temporary solution, desiring market certainty and increased demand over ad hoc payments.
- Despite concerns, many farmers remain supportive of Trump, appreciating his efforts on taxes, regulations, and freedom.
Approximately one year onward, Stehly stated his concerns have materialized, and Trump's most recent pledge of federal aid falls short of compensating American agricultural producers for their deficits.
“Maybe this will all come out to be better at the end, but I can tell you right now, it certainly isn’t the case at the moment,” Stehly said.
On Monday, Trump declared that his Republican administration would provide aid to $12 billion in one-time payments to farmers, who have experienced consistently low prices for their goods, increasing expenses, and reduced revenue following China's complete cessation of agricultural imports from The United States during the trade war.
Although rural regions continue to be strongholds of conservatism, cultivators are growing increasingly weary of Washington's actions. A number of them characterized the government's financial assistance, reminiscent of comparable measures during Trump's initial presidency, as a beneficial temporary solution that ultimately fails to address the fundamental issues facing the farming sector.
Charlie Radman, a farmer whose family has cultivated corn and soybeans on their property near Randolph, Minnesota, since 1899, commented, "“It’s a bridge. It’s not the ultimate solution we’re looking for,”". “What we really want to have is a little more certainty and not have to rely on these ad hoc payments.”
But farmers support for Trump remains steadfast.
Garrett Love, a sorghum grower from Kansas who was present at the White House during the aid's announcement, stated that agricultural producers understand that achieving equitable trade agreements is a “hard process,” and that farmers “appreciate lowering tax burdens, lowering regulations, increasing freedom, and Trump has definitely done that.”
Farmers caught up in trade war
American soybean and sorghum farmers typically export at least half their crops. They were hit the hardest by Trump’s trade dispute with China, the world’s largest buyer of soybeans that has increasingly relied on harvests from Brazil and other South American nations.
Trump and his administration have proudly discussed the agreement he finalized with Chinese President Xi Jinping in October. However, Liu Pengyu, the representative for The Chinese embassy, stated this week that “agriculture trade cooperation between China and the United States is proceeding in an orderly manner” without providing any details.
To date, China has acquired just over a quarter of the 12 million metric tons of soybeans that American officials stated would be procured by the close of February, sparking uncertainty regarding whether Beijing will honor that commitment or its pledges to acquire 25 million metric tons each year for the subsequent three years. Beijing has not validated these figures.
“In general, I don’t trust their motives and integrity of their promises,” said Bryant Kagay, who farms in northwest Missouri.
Even if China purchases the agreed-upon quantity of American soybeans, this would only bring U.S. Agricultural producers close to the volume they were selling annually prior to Trump's inauguration.
A significant factor in this is why Minnesota farmer Glen Groth stated he'd “like to see the administration focus more on opening up markets outside of China.” Beyond seeking additional global purchasers, agricultural organizations are advocating for increased domestic applications such as biodiesel, ethanol, aviation fuel, and sustenance for livestock.
Dan Keitzer, who cultivates soybeans and corn in southeastern Iowa, stated that recent abundant harvests and technological progress leading to greater yields necessitate an expanded customer base for the sector.
“I think most farmers would tell you that they don’t want to go to the mailbox and get a check from the government. That’s not why we farm,” he said. “We need more demand for our product.”
Aid is considered a Band-Aid
Previously, Trump has appeased agricultural producers financially. In his initial presidency, he allocated $22 billion during 2019 to mitigate the impact of trade conflicts with China on them. By 2020, this figure rose to $46 billion, an increased sum that accounted for financial hardships stemming from the COVID-19 pandemic.
The $12 billion revealed this week is unlikely to ease farmers' concerns regarding what lies ahead. They are currently procuring materials for the upcoming season's harvests and consulting with their financial institutions to go over the necessary financing. However, they're striving to maintain a positive outlook, hoping that crop values will rise if additional purchasers are secured. Agricultural producers will learn the precise amount of assistance they can anticipate near the Christmas holiday.
Assistance disbursements scheduled for arrival before February's conclusion will be limited to $155,000 per agricultural producer or organization, with eligibility restricted to operations earning under $900,000 in adjusted gross income. In the initial Trump presidency, several substantial agricultural enterprises circumvented the disbursement restrictions and collected millions.
Growers are hoping Trump will forcefully address issues regarding escalating expenses that are diminishing their profits.
Trump signed an executive order over the weekend directing the Justice Department and Federal Trade Commission to investigate anti-competitive practices anywhere in the food supply chain, starting with the fertilizer, seed and equipment that farmers rely on and continuing to deal with meat packing companies and grocers who help determine what price consumers pay.
Tregg Cronin, who farms and ranches with his family in central South Dakota, said he’s grateful for the president’s acknowledgment that farmers are “caught in the middle” of the trade war.
However, he indicated that any payments farmers get from the administration would probably “get turned around and sent right out the door.”
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Funk filed his report from Omaha, Nebraska. The Associated Press writers who assisted with this story include Hannah Fingerhut in Des Moines, Iowa; Sarah Raza in Sioux Falls, South Dakota; and Didi Tang in Washington.
