August 23, 2018
Indiana Farm Bureau’s policy is clear, says its president, Randy Kron. Farm Bureau delegates made it obvious that they oppose tariffs. Instead, they want access to markets to sell agricultural goods produced in Indiana.
“We are for free and fair markets,” says Kron, Evansville, Ind. “We grow more products as farmers than U.S. consumers can consume. We must be able to sell our products in other countries if we’re going to avoid huge surpluses.”
Kron makes his comments as the trade war between the U.S. and China continues. Several ag products have taken hits, including pork and soybeans. The Trump administration has proposed a three-tier approach to assist farmers feeling the brunt of the current trade war through lower grain prices. In fact, Steve Brown, director of the Indiana Farm Service Agency, said recently that he expects word any time on how provisions of that program will work.
Kron notes that while those programs may help soften the blow, it’s not what farmers want. What U.S. farmers want is to sell products to customers who need and want them, he emphasizes.
Bob White, director of national government relations for Indiana Farm Bureau, says timing of the tariffs couldn’t have been worse for agriculture. Prices were already struggling due to surpluses of corn and soybeans. When the tariff war picked up steam, prices tanked further.
Normally this time of year, the markets hinge on weather and crop reports to make movements one way or the other. While crop reports may still have some impact, tariffs have taken center stage so far this summer.
A way out?
Kron says he and most other ag leaders and farmers understand that there are legitimate issues with some of China’s trade policies with other goods and intellectual property, not just with ag products. But in the current environment, he fears that if the trade war continues, it may cause China to look for other suppliers of soybeans and other ag products.
“I’ve been on trade missions with Indiana delegations to various countries, and I’ve learned it takes time to forge relationships which eventually lead to trade deals,” Kron says. “Unfortunately, it takes a long time to build the relationships that allow these kinds of deals to happen, but only a short time to tear them down.”
China is a big trade player for the U.S., but it’s not the only one. Mexico and Canada are also in play. “We need to get one of these deals completed,” White says. “It would indicate that we can complete agreements and would build morale.”
As far as Indiana ag exports go, Canada ranks as the No. 1 customer, with Mexico second and China third, White says. His best guess is that some form of the North American Free Trade Agreement, the agreement among the U.S., Canada and Mexico forged during the Clinton administration, will stay in place.
Many times the European Union is mentioned when trade talks are the topic, but the EU is a minor player, White says. All exports to the EU are non-GMO.
What concerns Kron is the long-term effect a trade war could have. “I’ve talked with a couple of bankers, and they’re concerned,” he says. “That makes me concerned.”
One banker noted that he’s more worried about 2019, Kron reports. Some farmers locked in reasonable prices for 2018, but if depressed prices continue, there may be few opportunities for 2019 crop pricing.
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