AP NEWS

Tariffs were meant to help, but farmers are hurting

December 29, 2018

NEWVILLE, Pa. (AP) — In all of his 30 years of farming, Rick Mains has never seen a harvest season as bad as the one that just wrapped up.

For starters, mother nature didn’t cooperate. The growing season was one of the wettest on record. Well into December, Mains still had crops out on the fields - as well as water.

“There’s water running in the field where I’ve only seen once in lifetime,” said Mains, a soybean grower in Newville, two weeks ago.

To make matters worse, Mains had to contend with an unexpected and major economic curveball.

Like soybean farmers all across the country, he witnessed the decimation of the $14-billion soybean market after China, the country’s biggest soybean buyer, shut out the U.S. market with retaliatory tariffs.

It was just one of many fallouts from the tariffs that President Trump this year imposed on imported steel and aluminum. The tariffs sparked a trade war with the biggest U.S. trade partners - Canada, the European Union and China - all of which retaliated with tariffs of billions of dollars worth of exported goods and agricultural commodities, including on soybeans.

For many Pennsylvania farmers, the trifecta of low commodity prices, retaliatory trade tariffs and poor weather conditions dealt a heavy blow.

“What Trump is doing may help in the long term,” Mains said. “But right now it hit at a time when economically it’s hurting everybody - beef, poultry, crops are taking hit. It’s the worst time to have tariffs.”

Trump vows that his trade policies are key to fostering economic prosperity and protecting American trade. But while beneficial to some sectors of the economy, those policies have inflicted substantial damage across the Pennsylvania economic landscape.

Across the manufacturing sector, scores of companies are scrambling to offset rising production costs. Some are reconsidering supply chains and even company direction.

“I think if agriculture had been in a little better position when this started, we wouldn’t be hurting so much,” said Rick Ebert, the president of the Pennsylvania Farm Bureau. “The trade wars have had a huge impact on us.

After President Donald Trump rolled out protective tariffs in March, retaliatory tariffs from China, Canada and the EU have had an adverse effect on Pennsylvania farmers.

Ebert is concerned that tariffs will price U.S. farm products out of competitive markets, as more of them turn to other international suppliers.

As Ebert notes, Pennsylvania agriculture was already struggling with a dairy industry in distress, a symptom of oversupply as much as consumer taste.

The Trump administration trade war further exacerbated the situation for farmers.

Immediately after the retaliatory tariffs went into effect, farmers saw the price of the soybean bushel plummet. For small farmers, that meant tens of thousands of dollars in losses - exponentially more for larger farm operations.

“Immediately it dropped about $2.50 a bushel,” said Mains. Half of the value per bushel has been restored since then.

“It came back about a dollar a bushel,” he said. “Whether is stays there....something new tonight could change it.”

Unlike the bulk of Midwestern soybean farmers, whose crop is largely purchased by China, the Pennsylvania soybean crop mostly stays within state borders, providing most of the feed for large poultry operations.

Price is the main concern.

“It’s affecting the price,” Ebert said. “If someone has 10,000 bushels, you are looking at a pretty chunk of money as to what they were getting then and what they are getting now.”

Certain agricultural sectors across the state - the niche markets and agri-tourism (think corn maze and pumpkins) - are weathering fine, Ebert said. But not so much other sectors.

He is hopeful that farm subsidies and the new NAFTA will have positive impacts on the state of agriculture in Pennsylvania.

According to a report by Lancaster Farming, approximately 1,300 Pennsylvania farmers have received $2.4 million in federal subsidies aimed at compensating for revenue lost in the administration’s trade wars.

All told, approximately $1.78 billion have been disbursed to farmers by the U.S. Department of Agriculture since September.

The $867-billion 2019 farm bill, which Congress approved last week, is expected to provide a safety net to some agricultural sectors. The bill allocates billions of dollars in subsidies to American farmers.

“Farmers are frustrated all around,” said Ebert, a dairy and crop farmer from Westmoreland County. “Between prices and the weather challenges...I think a lot of them understand that the president is trying to right some of the wrongs in trade agreements especially with China. They understand things need to change....it’s just coming at a bad time.”

Mains said he prefers to limit his intake of news.

“Anytime there is news like that it could be a swing one way or another and you really have no control of it,” he said. “There’s no use in getting upset.”

At the end of the day, Mains, who grows 400 acres of soybeans, 450 acres of corn and 100 steer, wants fair trade and to be able to sell his crops.

He nets about 50 bushels an acre.

“It affects my pocketbook a lot,” he said. “The more acres of beans a guy is growing when prices dropped, they lose more.”

He prefers to remain optimistic: “My dad always told me, ‘People are going to eat ...so there should always be a future in farming,’” Mains said.

“The fact is all factors out of our control now. We can plant seeds, kill the weeds but if the good Lord don’t bring sun and rain at the right time, it’s out of your hands. It is what it is.”

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Information from: Pennlive.com, http://www.pennlive.com