By Kathleen Jacobs 

Many farmers must weigh the trade-offs of raising a child or growing their operations. For Alan Kemper, the balance between the two is the most rewarding part of his operation. Being able to watch his son Brian grow and mature along with his operation is an experience unlike most others. While the market economy of agriculture may be ever changing, the constant family component is why farmers love what they do.

Other farmers like Alan Kemper, Lafayette, Ind., have been faced with their own set of new and unique experiences. They’re being impacted by changing agricultural prices and changing agricultural regulations. An example are tariffs. Farmers are working diligently to keep their operations alive and well, despite these hurdles.

Having first farmed with his father, Kemper is accustomed to the volatility of agriculture and the effect of tariffs. Being able to keep his family’s farm going along with the help of his son has only deepened his appreciation of the work his family does. “It really is neat to see the generational transition continuing on,” Kemper says.

Kemper Farms, an operation primarily focused on corn and soybeans, was founded in 1888. Brian is now the senior partner of this multigenerational operation. However, a farm of this age and experience isn’t impervious to the effects of trade and tariffs.

“Trade is a big deal in agriculture,” says Purdue University’s Chris Hurt, an Extension ag economist. He adds that if economists can understand what drives economic events, they can better predict what’s coming down the pipeline for the agricultural market.

Hurt explains that since U.S. exports are 40% of farm production value, tariffs carry a heavy weight when analyzing future outlooks. One of the biggest changes in agricultural trade is the shift from exporting primarily grains to exporting animal products raised on U.S. grain, he says. This, in large part, was due to developing economies such as China demanding more animal protein as incomes rose.

Tariffs impact trade
The primary concern now are tariffs. A tariff is a tax imposed on imported goods to a country, Hurt explains. That tax is paid by the citizens of the country imposing the tariff to encourage buying that product from a different vendor, preferably a local one. Tariffs are making it incredibly difficult for U.S. farmers to make a profit. Hurt emphasizes it’s a major concern, considering that U.S. farmers export more than 20% of the crop they produce, according to USDA.

This is a feeling that Kemper Farms knows all too well.

“The devil is in the details,” Kemper says. “We’re using a lot of caution.”

He and his son are working to compensate for the effects of tariffs. Due to tariffs, their farm is experiencing losses of roughly $156 per acre of soybeans.

Livestock impact
John Hardin of Hardin Farms, Danville, Ind., is a crop and hog producer and can sympathize with the Kempers’ struggles.

“In the pork industry, we’ve seen all sorts of blood from the administration’s trade actions,” Hardin says. The National Pork Producers Council reports that in 2017, China and Hong Kong were responsible for around 16% of U.S. pork exports. Following the U.S. tariff on aluminum and steel imports, China placed a 25% tariff on pork imports, undercutting the U.S. pork industry.

Hardin also farms with his son, David. They’ve been working to navigate this difficult time in agriculture. Part of the way they’ve addressed these challenges is by growing more identity-preserved grains for niche markets and by being conscientious about spending. They’re hoping that severe cost cutting won’t need to come for another year or so.

“You work off reserves,” Hardin says. “My feeling is doing nothing is the worst thing to do.”

Both Hardin and Kemper acknowledge that this is a truly unique point for American agriculture. Neither thought when they began farming that they would face challenges such as these.

“The reality was when I began farming, very little was exported,” Hardin says. At that time, crop harvests were much smaller, and there weren’t fuel sources such as ethanol to boost trade on crops.

“We always were concerned about trade,” Kemper says. “We just never anticipated something like this.”

Long-term effects
What is the long-term effect of the tariff war?

“No question what the concern is,” Hurt says. “The longer the tariffs stay in place, the more chance of permanent loss of our buyer customers. The U.S. seeks to be a reliable supplier, and while [the tariff war] may end up being effective, the game we’re playing now is a dangerous one.”

While the outlook seems bleak, the government is taking actions to help farmers. USDA announced it will offer $12 billion worth of aid programs to farmers.

The Farm Service Agency recently implemented the Market Facilitation Program, providing payments to corn, cotton, dairy, hog, sorghum, soybean and wheat producers. U.S. Secretary of Agriculture Sonny Perdue is optimistic that this will offer hope and help to farmers.

The bottom line, however, is that aid is only temporary. Hurt notes that government aid can’t act as a one-year Band-Aid for a problem that could span multiple years.

“Farmers are saying they want trade, not aid,” Hurt says.

There are concerns about how this will affect the interest of potential farmers. While it’s never easy to start your own operation, these added obstacles make it that much more daunting.

“What about all the young farmers?” Kemper asks. “How are they going to handle all this?” He fears losing an entire generation of young farmers because of the current market situation.

Farmers remain hopeful that the situation will improve despite the immense amount of frustration and worry.

Hands crossed, face serious, Hardin raises his eyes and says, “There is still real opportunity for American agriculture, if we return to supportive export policies.”

“Families and the ag community in general need to keep working as a team and need to hang in there with their faith and families and communities to get through this,” Kemper says. “We’ve been through crises before, and we can get through this again.”

Ag business impact
U.S. farmers aren’t the only ones staying hopeful. Amy Cornell of Bose McKinney & Evans Agribusiness and Real Estate Groups has extensive experience in lobbying efforts, especially on topics concerning trade and tariffs.

“People need to eat,” Cornell says. “That’s the bottom line. We produce life-sustaining products. Operations may need to change. We may need to explore new crops. But at the end of the day, everyone depends on farmers.”

Jacobs is a senior in ag communication at Purdue University. She writes from West Lafayette, Ind.