In the episode, with trade tensions and tariffs on the rise, the Trump administration has laid out an initial plan to support American farmers. They will be giving it up in the billions, and targeting soybean growers particularly hard. This latest decision follows the Chinese Government’s notice earlier this year to stop the purchase of American soybeans, greatly affecting farmers throughout the Midwest. To save their farms, many farmers are holding out for government assistance. The jury is still out among some experts who question its long-term efficacy.
Brad Smith, an AGree farmer leader and member of the AGree Land Access Portfolio from northwest Illinois, grows soybeans and corn on his own land. He is adamant that the promised federal government aid will be absolutely critical for his business. “If you’re swimming in red ink, an infusion of cash helps stem the tide,” Smith noted. Soybean market prices have recently spiraled down to about $10/bu. Now, the majority of farmers can barely afford to breakeven, so an influx of government support to stay afloat is crucial.
Back in Indiana, Mark Legan, who raises livestock, corn and soybeans in Putnam County, agrees. While he does plan on accepting the government funds, he deems it a “band-aid” solution. He appreciates these measures, but he stresses that they will not address the root issues created by trade wars. “It’s not going to solve the problem,” he stated.
Justin Turbeest, the owner of Hop & Barrel, a craft business in Wisconsin, recently had to endure those challenges. Across the country, this summer he was barely able to avoid laying off 20 employees as operational costs skyrocketed from tariffs. He expressed frustration with the situation, stating, “On a personal level, of course it feels unfair.” He stressed that the current crisis doesn’t result from typical economic conditions. Rather, it’s the product of political choices and the costs that come with them.
In addition, the abrupt implementation of the tariffs has caused extreme economic hardship on those businesses that depend on imported goods. Megan Wyatt owns a specialty toy store in Granite Bay, California. She estimates that 80% of her raw materials and finished goods come from China. As a direct result of the tariffs, her costs are up across the board this year, anywhere from 10-15%. The ripple effects of these protectionist trade policies reverberate throughout the entire economy.
The California Wine Institute joined that chorus, citing a nearly 30% drop in wine exports this year. Later in June, the Distilled Spirits Council of the United States for the first time released a shocking statistic. Exports of distilled spirits to Canada have dropped by a shocking 85%. This fall is indicative of the larger effects of trade conflicts on US goods in world markets.
Chris Barrett, an agricultural economist at Cornell University, has studied the ways these kinds of powerful market disruptions have harmed farmers. He remarked, “Farmers have been clobbered by the shifts in trade this year.” Barrett raised questions regarding the fairness of providing aid to those who supported such policies: “Should we be bailing out those who voted for this, especially if they’re already better off than the average American, and if the bailout funds will be concentrated among the wealthiest of this group?”
Farmers throughout the Midwest are still stuck in the middle of these trade wars. Even as government assistance provides a temporary lifeline, countless others are asking what’s next for their businesses and jobs. The specter of trade war with China still hangs heavily over ag communities as well.