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Tariffs, disease, weather challenge Ohio farmers

By Bob Gaetjens • Jun 4, 2019 at 4:00 PM

A combination of factors are challenging Ohio farmers this spring.

Government, disease and weather have conspired to make this season uniquely difficult, particularly for those who grow soybeans.

John Wallbrown, co-owner of Deerfield Farms and Agricultural Services, said area farmers have had difficulty selling soybeans, due to tariffs enacted by the federal government.

"China, before the trade wars, was our No. 1 market for soy," he said. Now, Mexico has taken over that role, but Wallbrown said tariffs beginning at 5 percent June 10 and escalating against Mexico could hurt that market.

According to a news release from the American Soybean Association, U.S. Trade Representative Robert Lighthizer announced plans to increase the tariff rate on $200 billion worth of Chinese goods. In the past, China has retaliated with its own tariffs on American imports.

"We understand that Mr. Trump and his administration have broad goals they want to achieve for our country, but farmers are in a desperate situation," stated Davie Stephens, president of the American Soybean Association. "We need a positive resolution to this ongoing tariff dispute, not further escalation of tensions."

President Trump last month announced the U.S. Department of Agriculture (USDA) will take several actions to assist farmers in response to financial damage caused by retaliation and trade disruption in the tariff war.

Specifically, Trump authorized the USDA to provide up to $16 billion in programs, which is in line with the estimated impacts of retaliatory tariffs on U.S. agricultural goods and other trade disruptions, according to his administration.

Trump directed U.S. Secretary of Agriculture Sonny Perdue to craft a relief strategy to support American agricultural producers while the Administration continues to work on free, fair, and reciprocal trade deals to open more markets in the long run to help American farmers compete globally. 

“The plan … ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners,” Perdue said. “Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers. Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them.”

Eric Barrett, the agriculture and natural resources educator for The Ohio State University's agricultural extension office in Trumbull County, said the soybean price per bushel has plummeted in the past five or six years. The price per bushel was $13 or $14 in 2014, but now is around $8 per bushel.

In the past, the government has offered assistance for soybean farmers, but Barrett said that may or may not have been enough to indemnify farmers for their losses in recent years.

A simple overabundance of supply in the soybean market, exacerbated by a bumper crop last summer, is hurting area farmers, but the tariffs aren't alone in driving down soy prices.

Ben Brown, manager of The Ohio State University's farm management program, said a dearth of pork across Asia also is hurting soy demand.

"There are a couple of these worldwide diseases which are completely fatal," he said. "Right now, African swine fever is destroying Chinese pork, and China is the leader in pork."

Wallbrown said the official word from China is that about 30 percent of their pork livestock has been wiped out.

"All the industry experts saying it's substantially higher than that," he added.

Of the world's pork, 50 percent comes from China, and the African swine fever has had a chilling effect on the price of soy as livestock feed in China.

Brown agreed.

"The pork in China was a major source of feed demand in China," he said. "China has now started to import U.S. pork because they need to feed the Chinese people. That's part of what's causing the collapse in soybean prices. China has less demand for soybeans, in general. Plus the tariffs made it harder to import soybeans."

Pork prices will likely spike in grocery stores, as well, he added.

Weather this spring also has been a hindrance to farmers of all crops, not just soybeans, said Kathy Karas, who owns more than 500 acres, including more than 300 agricultural acres in Suffield.

"There's going to be no wheat," she said. "And if it keeps raining like this, it's going to be hard to get the hay in for the cows."

She said Rufener's Farm hasn't been able to plant all its soybeans yet, and Wallbrown said he's in the same boat.

"Basically, it's going to be tough," he said. "It's pretty wet. We only have less than half our soybeans planted and 80 percent of our corn."

For optimal growing, he said corn should be planted by May 10, and soybeans should be planted by the end of May. Now, he said he's facing crop insurance planting deadlines of June 5 for corn and June 20 for soybeans.

Karas said the water is compounding the farmers' problems in other ways, as well.

"The Midwest is just under water," she said. "The barges can't get up or down the Mississippi River because the floodwaters are so high. Barges carrying fertilizer can't get to their destinations."

Kiko Companies CEO Richard Kiko Jr., who auctions off farm properties among other things, said he doesn't believe the tariffs are causing owners to sell their farms in Portage County. However, he said he believes farms are affected.

"The leading reason we see auctions of real estate is basically the seller wanting to convert that asset into cash and do something else," he said, adding many Baby Boomers are selling farms their offspring aren't interested in cultivating.

Kiko said he believes the tariffs are affecting farmers. Kiko said he believes more farmers are taking out line-of-credit-style loans to keep themselves afloat through the soybean price crash.

"There is equity in the farms to borrow money," he said. "Rather than selling, these may be more leveraged today because of the economic impact, but they may not be selling."

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©2019 Record-Courier, Kent, Ohio

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