Dried-up exports bring Minnesota farmers to breaking point The Trump administration has tried to downplay this reality.
September 9, 2019
By Tim Dufault
Last month at FarmFest, a three-day ag show here in Minnesota, several farmers made national news when they confronted U.S. Agriculture Secretary Sonny Perdue about the pain the president’s trade war has caused them.
In front of hundreds of other farmers, they told Perdue that contrary to the president’s tweets, farmers aren’t “doing great again.” They talked about how their markets are disappearing. One state farm leader pointed out that when a farmer meets with his lender and explains that they can’t make a payment, being a “patriot” in the eyes of the president does nothing to spare them from bankruptcy.
Even in a room full of the president’s supporters, the comments were met with nodding heads and widespread applause. Like me, the farmers in the room that day have reached their breaking point.
We are now more than a year into the trade war. And while for most Americans the fallout is spread out and sometimes barely registered, the opposite is true for much of rural America. Exports are the lifeblood of American agriculture. When those exports slow or even stop, as they have over the past year, the ripple effects spread from the farm, to rural Main Streets, to entire regions of the country.
Here in Minnesota, I grow hard red spring wheat. That is the major class of wheat in northwest Minnesota, North and South Dakota, and Montana. In 2016, American farmers exported more than 41 million bushels of hard red spring wheat to China annually. In 2017, after the trade war began that March, exports dropped in half. In 2018, American farmers exported only 1.2 million bushels to China. That is a drop-off of 97% in just two years.
On top of the hit my wheat has taken, the soybeans that I – and so many of my neighbors – also depend on for export have been devastated by this conflict. China is the world’s biggest importer of soybeans. Before the trade war began, U.S. soybean exports to China reached a volume of 1.3 billion bushels. Now exports have essentially dried up.
While I’m acutely aware of what the trade war has meant for my farm, I’ve also been talking to friends and neighbors to get a sense of the impacts on our state as a whole.
Farm bankers take the pulse of the farm economy daily, and they are worried.
Not long ago, a farm banker friend asked me how his farmers can make money when wheat prices are below $4 per bushel. I told him the hard truth: They can’t. He then shared his own hard truth that he will likely have to cut off about a half-dozen growers before winter.
This is how a trade war being fought out in tweets and tit-for-tat news releases plays out in the real world. There are real consequences. There is real financial loss.
Unfortunately, the economic consequences have too often been papered over by the president and the Department of Agriculture with references to the checks farmers have received as a payoff for the loss of our markets.
Make no mistake, these checks are appreciated, but they are a Band-Aid on a severed artery. Many growers are sitting on two lines of credit. Young growers just starting out face razor-thin margins, and these checks do nothing to keep them from going out of business.
The administration’s payments also do nothing to alleviate the long-term consequences of the trade war. While we are being paid not to sell to one of the fastest-growing markets in the world, our competitors are filling the void. Our loss is Canada, Brazil, Russia and Australia’s gain. It’s why nearly every farmer you ask about these payments will tell you they want “trade not aid.”
You would be hard-pressed to find a farmer who would disagree with the fact that China has been a bad actor. But doubling down on a tariff strategy that has failed to work and has cost rural America so much is not the answer.
Here in Minnesota we have reached the breaking point. If the president fails to listen to farmers now, we should break with him.
Tim Dufault is a fourth-generation farmer in Crookston, Minnesota and
On Twitter: @6dollarwheatguy.
Source: Tim Dufault