I met a friend from Gilman Township recently at a rural farm meeting where he expressed concern about President Donald Trump’s continued and increased tariffs with China is hurting farmer’s income. I replied that I agree the tariffs are damaging U.S. export sales of soybeans with China, but told him I support the president’s efforts to protect the U.S. intellectual properties China is stealing along with currency manipulation and addressing the huge trade disparity China has with the U.S.; it’s in our country’s best interest to deal with it now. China owns Syngenta Seeds, the second largest seed company in the world, and Smithfield Foods, the largest pork production and slaughter facilities in the U.S.
Yes farmers are struggling financially with lower prices, but is it all Trump’s fault? I know that China, raising half of the world’s swine, has a severe disease problem with African swine fever, which is deadly and China has lost one-third of its swine herd. A main feed ingredient for swine is soybean meal, hence China’s demand for soybeans is less. Brazil’s exports of soybeans to China dropped from 46 million metric tons to 39 million in 2019.
Soybeans prices also tanked to $9 prices in 2014 and again in 2016. These drops in prices were caused at least partially by quantitative easing under the Obama administration in an effort to stimulate the U.S. economy, which is described as artificial credit creation. The U.S. dollar becomes less valuable as more dollars are in circulation. A weaker dollar results in higher commodity prices measured in dollars. After the end of QE, the dollar’s value strengthened and the prices of commodities in dollars went down, including ag (soybeans), oil and copper.
Farmers do an excellent job producing food along with trying to make a living, unfortunately the farmer isn’t paid a reasonable price for their efforts.
Something that can help immediately is for Congress to pass the United States Mexico Canada Agreement, which improves trade and prices farmers can receive for their products, especially corn and dairy.
Contact your congressman and urge them to help pass the USMCA, let’s get it done!