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Betting it all, gamblers and farmers have a lot in common.

When the farmer says "all in," he often means he's in with all his cash, often with his savings, usually with the challenge of his rising loan debt. He's betting the farm he can finance and produce a good crop that will pay for his investment of time, worry, sweat, blood, stress and money.

Logan Hawkes 1, Contributing Writer

June 19, 2017

6 Min Read
It's all in for farmers every planting season when they put huge investments at risk.Logan Hawkes

Whether you are sitting at a serious poker table with the pros or just playing for monopoly money with friends, when someone across the table says they are "all in," you can hear the sigh around the table from other players who were hoping their hand would be the best.

An "all in" suggests that player is confident his hand is better than yours, and that's when you begin to wonder if that pair of sevens in your hand may not be as strong as you had hoped.

Farmers are little bit like that guy who bets all of his chips on that one big hand of the poker game. For one, they both dig deep into their pockets to be successful, believing they are going to win in the end. The farmer, like the gambler, is invested in his work, and as with any business venture, he is betting that if his investments are well placed and he can cash in on his skills, he can come out a winner—and sometimes a big winner.

On the other hand, be it bad luck, over-confidence, bad decisions, or some combination of bad options, farmer or gambler can bet it all, acutely aware they could lose everything. When that happens, it's "all in...all gone."

The gambler usually knows the state of his resources, and limits his bets in each game accordingly. The gambler's overhead is low, his lateral expenses are limited, and his tax obligation depends on the quality of his bookkeeper.

BIG STAKES FOR FARMERS

Things are a little different for a farmer who often bets everything he has—college funds for the kids, retirement income, bank loan funds, property expenses, equipment acquisitions and maintenance, the cost of seed and agri-chemicals, feed, fuel and water—and that's just a start. In short, farm families are betting their entire way of life. You might say they are “betting the farm” each year as planting season approaches. 

When the farmer says "all in," he often means he's in with all his cash, often with his savings, usually with the challenge of his rising loan debt. He's betting the farm he can finance and produce a good crop that will pay for his investment of time, worry, sweat, blood, stress and money.

Farmers are flexible; they can lose in a given crop year (or more) and still make it up with several good years of farming that may and often do follow.

But sometimes an issue so big comes along to add weight to the worries of farmers, and sometimes it muddies the waters already troubled by low prices, high inputs and diminishing safety nets. Today this new and emerging shadow of concern is related to the future of agricultural trade, a robust if not complicated system that helps U.S. agriculture exist in the modern, competitive global competition within the agricultural marketplace.

RISING FEARS OF U.S. PRODUCERS

Andrew Soergel, in U.S. News Online says agriculture is "holding its breath" over the potential changes that may be coming in the export marketplace. And while changes in the North American Free Trade Agreement may be the focal point of trade concerns, much more may be at stake.

This month President Trump reversed much of the work initiated by President Obama that would have normalized relations with Cuba, setting back the chance for farmers to develop new trade opportunities that many were hoping to acquire as a result. In addition, regardless of hopes to the contrary, a potential trade riff with Mexico and/or Canada has already spread to distant markets, many trade partners expressing concern over the future of U.S. trade policy.

"The possibility of reduced access to foreign markets is probably the biggest risk we have in the farm economy right now," Steve Nelson, president of the Nebraska Farm Bureau Federation said in April.

 And for good reason.

Beginning with NAFTA, U.S. Agriculture trade is big business. The United States has enjoyed a trade surplus in farm products since at least 1967, government data indicate. Last year, farm exports exceeded imports by $20.5 billion. Since 1994, when tariffs were eased by NAFTA, annual farm exports to Mexico alone have jumped nearly five-fold to about $18 billion, making our southern neighbor the No. 3 market for U.S. agriculture, according to the Associated Press (AP). The leading exports to Mexico include corn, soybeans and pork.

Ken Maschhoff, President of the National Pork Producers, says Canada and Mexico represent the number one and number two export markets for U.S. pork producers.

"We absolutely must not have any disruptions in exports to our [Mexican] and [Canadian] markets," he told farmers last month.

FARM GROUPS ON EDGE

Even U.S. farm groups are finding they are increasingly "on edge" over the thought of unwanted changes in NAFTA. Trade groups supporting corn, wheat and soybean producers all say the existing NAFTA deal is net positive for American farmers and say they fear changes may end up costing producers.

And it's not just U.S. interests that are concerned. Trade leaders in South Korea and in Europe have expressed independent concerns over President Trump's policy of wrestling with international trade deals in an effort to gain an edge in trade balances.

Trade analysts say South Korea officials are concerned over possible threats to its own bilateral deal with Washington. The U.S.-Korea bilateral free trade agreement (KORUS) was signed in 2012 and was believed to be a major improvement to and a possible model for future trade agreements for the United States. Officials say KORUS addresses modernization of trade issues, like those that deal with financial services and data processing.

But KORUS hasn't worked as well as planned, and Trump has already said the deal needed to be renegotiated or terminated.

Sigmar Gabriel, Germany’s foreign minister, who traveled to Mexico last week, said German firms are concerned about the impending renegotiation of NAFTA and what it might mean for other trading partners with the United States.

The German trade minister warned Mexican officials to proceed with caution concerning NAFTA negotiations, advice shared just days ahead of an official state visit from German Chancellor Angela Merkel. On the agenda for that meeting is international trade.

PARTNERS LOOKING ELSEWHERE

To complicate matters, Mexican officials may not be reacting the way the Trump administration expected. Mexico's foreign minister and industry leaders in Mexico have been busy meeting with multiple nations about new trade opportunities.

For example, a collective of livestock companies in Mexico met with and reached a purchase agreement with a Brazil company that agreed to supply yellow corn to support the Mexican beef industry. Reuters noted that the Mexican companies agreed to pay more for the corn than they do for U.S. corn, but sealed the agreement in anticipation of possible trade changes that may occur as a result of NAFTA renegotiation.

This type of development makes many farmers in the U.S. uneasy, and it's not likely to improve a great deal until after NAFTA discussions are held and a new agreement, if possible, is reached. That may not happen until far into next year.

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