Soybean prices drop to 10-year low due to trade war. How long will farmers put their support behind Trump?
President Donald Trump has repeatedly called farmers patriots for weathering his trade war with China. But in Kansas and Missouri, some farmers feel like they’re casualties.
Tom Giessel, who grows wheat and corn on his 3,000 acre farm in Larned, Kansas, said that the country has effectively imposed an embargo on its own crops. He called it the worst crisis American farmers have faced since the early 1980s.
“My biggest frustration is there’s no light at the end of the tunnel. There’s nothing out there giving me a glimmer of hope that commodity prices will increase substantially,” Giessel said. “The Chinese have zero reason to come to the table on this on commodities. Why would they want to do anything different? It’s lowered the price of grains.”
This week soybean prices dropped to a ten-year low of less than $8 a bushel in anticipation of Chinese retaliation to U.S. tariffs next month. Wheat, corn and other Midwest staple crops have also experienced drops in price over the last two years.
“If the stock market took that kind of a blip, there’d be people jumping out of buildings,” said Giessel, vice president of the Kansas Farmers Union.
Trump won both Kansas and Missouri by double digits in 2016 with overwhelming support from farm country, but as the president’s trade war drags on farmers have grown increasingly frustrated.
“Does the Kansas City Star allow you to use the word ‘pissed’?” said Blake Hurst, the president of the Missouri Farm Bureau, when asked how farmers were feeling about the hit to soybeans, the state’s biggest crop.
“I’ll sit in these conversations with farmers and the politicians will say the Chinese have been screwing us for years,” Hurst said, noting the refrain from lawmakers about China’s unfair trade practices and intellectual property theft.
“I don’t see how any of those problems are solved making sure they don’t have soybeans for their pigs.”
But they also say their power to provide relief is limited.
Sen. Jerry Moran, R-Kansas, said he continues push the administration to resolve the standoff with China, but that any Congressional action would not survive Trump’s veto pen.
“I’ve seen the criticism that Republicans are just supporting the president, but I don’t know how legislatively you could accomplish anything unless you had a two-thirds vote in the Senate [to override a veto] and I don’t see that path,” said Moran, who signed onto a bill to restrict the president’s authority to impose tariffs on steel and aluminum.
“How do you get a bill to become law? At least what I learned in high school, it takes a presidential signature.”
After pressure from Senate Republicans, Trump took a major step toward easing tensions with the country’s two other largest trading partners Friday, announcing plans to rescind tariffs on steel and aluminum from Canada and Mexico.
Secretary of Agriculture Sonny Perdue said he expects Canada and Mexico to pull back their tariffs against U.S. agricultural
products in response to the news.
It’s a move that will make it easier for Congress to pass the USMCA, a proposed trade deal with Canada and Mexico intended to replace NAFTA.
House Republicans point to passing the USMCA as the best way to help farmers in the short-term while tensions with China continue. Kansas Republican Reps. Steve Watkins and Ron Estes are both on the team tasked with shepherding the bill to passage.
But House Speaker Nancy Pelosi, D-California, has indicated that she has no immediate plans to bring the proposed agreement to the floor. And Democrats are not enthused about passing the deal, which Rep. Cleaver, D-Missouri, derided as a symbolic way for Trump to replace Bill Clinton’s signature on NAFTA with his own.
“Passing a new trade agreement is going to be excruciatingly difficult because in the last election Bernie Sanders and Donald Trump were able to get the country on their side about the dangers of these trade agreements,” Cleaver said.
Hurst said between Trump’s standoff with China and Democrats’ resistance to passing the deal with Mexico and Canada, neither party currently offers farmers a path forward.
“Where are farmers supposed to go to get support for trade?” he said.
Cleaver said he met with a group of 18 farmers in Marshall, Missouri, to discuss the financial crisis they’re facing as a result of the tariffs.
“They are fit to be tied because they see an endangerment coming from these tariffs that could wipe out their existence. With soybeans falling like a brick, understandably our farmers are not happy at all,” Cleaver said.
Trump has floated a $15 billion bailout to help farmers hurt by the tariffs. It’s the second straight year the federal government will have to provide billions in assistance to farmers to help them cope with the trade.
Hurst called the prospect of another bailout financially inadequate and psychologically repulsive for farmers in Missouri.
“If they send us a check, we’ll cash it. But no, we’re not going to be happy about it,” Hurst said. “Whatever program they come up with, no way does it cover our losses.”
Giessel said many farmers weren’t made whole by the administration’s previous $12 billion bailout from last year. “They don’t just need to be swinging a bucket of money out here. It better be targeted and it better be a bigger bucket,” Giessel said.
Jenny Burgess, a first generation farmer who grows soybeans, wheat and corn on her farm near Sterling, Kansas, said she and her husband “don’t want to be government-paid farmers” but they’ll have little choice unless the trade dispute resolves.
“We want to stand on our own two feet,” she said.
Sen. Roy Blunt, a Missouri Republican and member of the GOP leadership team, said the proposed payments to farmers may be necessary as a short-term solution, but that the best solution is to look for other trading partners.
“If you’re not going to open the market in China, focus on opening markets in other places like Japan,” Blunt said.
The U.S. Department of Agriculture announced Friday that Japan will be lifting restrictions on U.S. beef, a sign that negotiations with other trading partners can still move forward as the tension with China continues.
Blunt noted that following World War II Congress ceded most of its authority on trade to the president with implicit understanding that the president would work to open up markets.
“The Senate as an institution can’t be and wouldn’t be the best trade negotiator. When the Congress used to set tariffs… that almost always had a bad result,” Blunt said.
Other lawmakers are losing their patience with the situation.
“We need to get back to the table,” said Sen. Pat Roberts, the Kansas Republican who chairs the Senate Agriculture Committee. “If we can’t get a breakthrough with China and we are continuing to use tariffs and use tariffs and use tariffs, you’re going to continue to have retaliation, retaliation, retaliation.”
Sen. Josh Hawley. R-Missouri, said Vice President Mike Pence briefed Senate Republicans on the negotiations with China and told them the country won’t agree to any enforcement mechanisms in a trade deal.
“That’s really a problem,” Hawley said. “I don’t want to end right back here in two years where we’re getting shut out of markets, they’re stealing stuff and we can’t enforce it. It’s a conundrum. What I do know is having our farmers be the focus of retaliation is not sustainable for our farmers.”
Rep. William Lacy Clay, D-Missouri, called on farmers, a group that typically leans Republican, to form a coalition with Democrats on trade.
He said he met with corn and soybean farmers last summer to “get their take on what this administration is doing to destroy their way of life and I just point blank asked them, ‘What are you going to do about it?’”
Lacy Clay said farmers who tried to wait out the trade tensions are now in worse shape.
But when asked what Congress could to compel Trump to change his course on trade, the St. Louis Democrat replied,
“Anything we could do? I mean, he doesn’t listen to us now. So he would just ignore the law. He’s a president who is lawless, so why would he care about what we did?”
But some farmers in the state support Trump’s hardball tactics.
“When I talk to neighboring farmers or other farmers around the state everybody’s feeling it, price wise, but they also say we’ve been complaining about some of these things for 20 years and it’s never changed,” said Todd Hays, who grows soybeans and raises swine on his family farm in Monroe City in Northeast Missouri. “It does me no good to scream and jump up and down about it.”
Giessel said farmers shouldn’t tolerate having their livelihood sacrificed for other industries. He said Kansas lawmakers appear to be listening, but he wants to see more action from the delegation.
“I’m 66-years-old,” Giessel said. “And what the markets indicate to me is that I need to retire.”