Farmers fear tariffs could cost them one of their biggest markets in China
Heading into this year, most U.S. farmers were hoping to break even or maybe record a small profit
OMAHA, Neb. (AP) — Heading into this year, most U.S. farmers were hoping to break even or maybe record a small profit if they could find a way to limit their sky-high costs. But now they are faced with losing the biggest export market for many of their crops after China retaliated against President Donald Trump's tariffs.
“There's just not any margin for error in the current farm economy,” said Kentucky farmer Caleb Ragland, who serves as president of the American Soybean Association.
Soybean and sorghum farmers have particular reason to worry because at least half of those crops are exported and China has long been the biggest buyer. China has also bought a lot of American corn, beef, chicken and other crops as part of spending $24.65 billion on U.S. agricultural products last year. Now with China slapping 34% tariffs on all American products Friday — on top of other tariffs it imposed earlier this year — all of those products will be significantly more expensive in China
Crop prices, much like the stock market, dropped after Trump announced his tariffs earlier this week.
Tim Dufault, whose farm is in northwest Minnesota only about 80 miles south of Canada, said in a good year soybean farmers might make $50 to $75 an acre. But this isn't a good year because crop prices aren't high enough to cover soaring costs, and the price drop in the past two days cost them about $25 an acre, he said.
Dufault said he is worried that these new tariffs might put many farmers out of business, including the young farmers he rented his land to heading into this year as he retired because they likely won't make anything in 2025.
“I just I hope to God they can stay in business,” said Dufault, who is active with the Farmers for Free Trade group that pushes for open markets.
One of the biggest long-term concerns is that American farmers and ranchers will lose market share as China turns to Brazil and other countries to buy the soybeans, beef, chicken and other crops it consumes. China will buy lots of sorghum because it is distilled into the drink baijiu that is as popular there as whiskey is in the United States, but they will get it from other countries.
Farmers endured Trump's previous trade war with China during his first term. But this time, Trump's tariffs extend around the globe, so China likely won't be the last country to retaliate with tariffs of its own.
The only way most farmers survived Trump's last trade war was with tens of billions of government aid payments, but it's not clear if he will do that this time. He gave them more than $22 billion in aid payments in 2019 and nearly $46 billion in 2020, though that year also included aid related to the COVID pandemic.
Agriculture Secretary Brooke Rollins told Fox News this week that right now she doesn't believe massive aid payments will be necessary, although she won't know that for several months. "But if it is, then this president has always said and he is resolute in his commitment to our farmers and our ranchers and our great rural communities in America, so we will we’ll make sure we’re ready if in fact that is necessary,” she said.
“But none of us like that,” said farmer Andy Hineman, who is vice president of the Kansas Grain Sorghum Producers Association. “We don’t want to live on government handouts. We’d rather sell the crops we grow.”
But farmer Bryant Kagay, part owner of Kagay farms in Amity, Missouri, said he doesn’t “have a lot of faith that these tariffs — the way they are laid out today — will stick around long term.”
He also doesn't like the idea of getting aid from the government.
“I really hate that seems to be the solution that, well, we’ll just pay farmers some just off-the-cuff payment to help offset this,” Kagay said. “I think a federal government that’s vastly overspending today, like this is not the way to solve that problem.”
The hope for farmers is that Trump’s tariffs will lead to negotiations with other countries that will lower tariffs and other trade barriers.
“That’s the type of positive development that we can do that’s good for everybody involved, and that’s what we need to look for,” Ragland said. “Instead of beating each other up with higher and higher tariffs — it’s just like punching each other in the face. We’re not going to gain anything from it. It’s just going to cause us to hurt. That would be my encouragement to the administration, is to look for opportunities and get some great deals done proactively.”
___
Associated Press writer Nick Ingram contributed to this report from Missouri.
