U.S. Farmers Face Planting Season Without A Resolution To Trade War

Originally published on January 7, 2019 5:56 am
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STEVE INSKEEP, HOST:

The U.S. trade war with China did not happen overnight. It reflects long-term concerns, and it developed over a number of months. But in farming terms, U.S. tariffs and Chinese retaliation has come quite abruptly. China has targeted U.S. soybean exports. And the nature of the farm economy makes it harder for American farmers to adjust. They are preparing to plant more soybeans even though there are now too many of them. Harvest Public Media's Madelyn Beck explains.

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MADELYN BECK, BYLINE: I'm in central Illinois in a 200-foot-long machine shed. On the far end, you can hear a combine running as a mechanic tries to figure out what's wrong with it. On this end, farmer Grant Strom is describing his 80-foot-long planter.

GRANT STROM: Then the seed actually drops right behind here. This is - so the seed tube comes down here, and this is called a shoe.

BECK: Strom farms about 5,000 acres with his family in Knox County, Ill. His two planters will need several weeks of maintenance over the winter to be ready to put seeds in the ground. And like it or not, he's already had to order his seeds. Even while across the country, piles of harvested soybeans sit in storage awaiting buyers, Grant Strom plans to grow more soybeans this year.

STROM: I think a lot of farms are like ours, where - far as planning, like, a crop rotation - are we're going to plant corn, soybeans? - I mean, I'd say 90 percent of our acres are pretty well fixed what we're going to do year in, year out.

BECK: A good crop rotation can help boost yields. And he buys his seeds at early bird discounts. For Strom, his mixture of corn and soybean seed cost at an average $80 to $90 an acre. Multiply that by 5,000 acres, and you're quickly approaching a half-million-dollar seed bill. A lot of Midwest farmers are in the same difficult position. If tariffs with China worsen, they can't make a big shift and just trade out soybeans for other crops. China did start buying some soybeans in December, but it was less than 5 percent what it bought from the U.S. the year before. Most farmers are risking to stick with what worked for them last year. Agronomist Stephanie Porter works with Golden Harvest and helps farmers plan for their next crop.

STEPHANIE PORTER: I think a lot of farmers are keeping - that I've talked to so far - are keeping to what they know. This isn't the first time they've struggled.

BECK: Porter stresses that while every situation is different, all farmers depend on buyers for commodities. And that's where the trade war really hurts. This isn't lost on banks. Mike Shane is an agriculture banker and lender with F&M Bank in Galesburg, Ill. He keeps an eye on trade and crop costs but also monitors the situation of each farm he lends to. He says he won't cut them off just because they had a bad year due to trade policy or crop costs, but...

MIKE SHANE: You know, if a guy shows multiple years of losing money, we want to say, what's going on? We need to stop this, or we're probably going to have to stop lending money.

BECK: Some farmers have been helped by higher crop yields and Washington bailouts. The Trump administration announced in August that it would be spending billions to help farmers suffering from China's tariffs on ag products - namely, soybean farmers.

SHANE: I think that payment was the difference between people making money and not making money this year.

BECK: More bailout money was announced in December. In total, it's about $9.6 billion going to ag producers that suffered from China's retaliatory tariffs. More than $7 billion of that is slated for soybean farmers. But for farmers who need help filling out application forms for federal aid before the January 15 deadline, they may run into this.

(SOUNDBITE OF ARCHIVED RECORDING)

COMPUTER-GENERATED VOICE: Sorry. Nobody is available at this time.

BECK: That's the sound of the government shutdown, which has left many federal offices empty and which is stalling aid payments. There's also no guarantee of bailout money next season if the trade war continues. For NPR News, I'm Madelyn Beck in Galesburg, Ill.

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INSKEEP: That story comes to us from Harvest Public Media, a reporting collaboration in the Midwest and Plains states.

(SOUNDBITE OF POLAROIT'S "LEAVING ALASKA") Transcript provided by NPR, Copyright NPR.