EVANSVILLE, Ind., Aug. 8 (UPI) — China’s announcement this week that it will cease importing agricultural products from the United States sent shock waves through America’s battered farming sector.
“It is kind of a disaster,” said Will Rogers, a spokesman for the American Farm Bureau Federation. “There is no commodity right now that I can think of that is in good shape, no matter where you look.”
China’s Ministry of Commerce announced Tuesday that it would suspend all U.S. agricultural purchases in retaliation for President Donald Trump’s threat to impose a new 10 percent tariff on $300 billion of Chinese imports.
“This is a serious violation of the meeting between the heads of state of China and the United States,” the Ministry of Commerce said in a statement.
The news hit farming communities hard.
China had been the largest or second-largest export market for American agriculture every year since 2008, according to the U.S. Department of Agriculture. That changed suddenly last summer when China began targeting U.S. farm goods with retaliatory tariffs. By the end of 2018, China had fallen to fifth place.
It was a devastating decline, Rogers said. However, China still imported some $9.1 billion in agricultural goods from the United States last year.
“Now, we stand to lose all of what was a $9.1 billion market in 2018, which was down sharply from the $19.5 billion U.S. farmers exported to China in 2017,” federation President Zippy Duvall said in a statement.
The losses are rocking American farms, industry experts say.
“We’re reaching the point of no return,” said Brent Renner, an Iowa farmer who grows corn and soybeans. “Looking forward at this point, we’re thinking, ‘What are we doing? Why are we doing this?'”
In Iowa, for example, Tim Bardole maintains three “century farms” — operations that have been in his family for more than 100 years. One was handed down to him from his father, another from his mother and a third from his wife’s family.
Most of the land is devoted to growing corn and soy. However, he recently added a “hog finishing” operation for a new stream of income. His banker recommended it as a condition of receiving a loan.
“My family has been in it for a long time, and we’re going to do everything we can to make sure we’re not the last generation doing it,” Bardole said. “But it’s hard. We’ve lost money the last two years.”
Soybean growers like Bardole, who is president-elect of the Iowa Soybean Association, are among the hardest-hit group in the trade dispute. Before it began, China was buying about 30 percent of America’s soybeans. After tariffs all but closed off that market, those beans had nowhere to go.
“We have many farms with full or near full [grain] bins from last year,” Rogers said. “Every last bushel produced in 2019 is adding to that glut.”
Soy growers are not the only farmers suffering under the tariffs, Rogers said.
The National Milk Producers Federation estimates dairy producers lost $2.3 in revenue since the tariff escalation began. Almond exports dropped 33 percent, according to the Almond Alliance of California. And the National Pork Producers Council said its industry is being prevented “from fully capitalizing on a historic sales opportunity created by the outbreak of African swine fever in the world’s largest pork-consuming nation.”
“Whatever commodity you look at, demand is not meeting supply,” Rogers said. “It seems kind of inevitable that a lot of people will exit the industry and we’ll see a lot of farms consolidating.”
Rogers quickly added that farmers have received “an impressive amount of aid” from the Trump administration. In 2018, the USDA distributed around $10 billion in tariff aid to farmers. This year, the agency said it will give out $14.5 billion.
That aid is welcome relief, Rogers said. But it does not make up for all the money farmers are losing. And even with it, many farms across the country remain in peril. Restoring trade with China is the only sustainable solution, he said.
This latest escalation is a sign to farmers that that is unlikely to happen anytime soon.
Renner, the soybean grower from Iowa, recently returned from an Iowa Soybean Association trade mission to China, where he met with multiple soybean importers.
“I got the impression from my firsthand experience in China that they will be patient,” Renner said. “They may wait out the election cycle to see if Trump is re-elected. I don’t even like to think about it or talk about it, but we need to be prepared for it.”
Even if a trade deal is struck tomorrow, many industry experts worry that the market no longer will be there.
Most of those trading partnerships were created by individual companies and trade associations that spent decades cultivating relationships with Chinese buyers, Rogers said.
“When we take our product away from our customers, we teach them that they can operate at full capacity without us,” said Kirk Leeds, CEO of the Iowa Soybean Association. “I just don’t think it is likely that we’ll get the full market back that we had. But, we aren’t going to get any of it back without a trade agreement.”
