Will Trump’s tariffs sink U.S. agriculture?

Executive Summary

Farmers in the United States are struggling to overcome an interrelated series of challenges that have driven many of them to the brink of financial failure. The most recent arose when some of the biggest U.S. trading partners imposed tariffs on U.S. agricultural products in retaliation for the Trump administration’s imposition of levies on those countries’ exports to the United States. This has come on top of a steep decline in crop prices, a sharp reduction in the farm labor supply, rising interest rates, climate change and a congressional stalemate over a new farm bill. “It’s all coming down on us at once,” said one Iowa soybean farmer. As many as one-fifth of that state’s small farmers could go under in the next two years, some Iowa bankers predict.

Here are some key takeaways:

  • Farm commodity prices have fallen by 50 percent in the past five years, the greatest percentage drop since the Great Depression.

  • Agricultural products make up 10 percent of total U.S. exports, and 20 percent of total U.S. farm income is derived from exports.

  • Farm debt has more than doubled since 2000 and will reach the highest level in history this year, according to the U.S. Department of Agriculture.

  • Click here to listen to an interview with author Jonathan Broder or click here for the transcript.

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Resources for Further Study

Bibliography

Books

Elliott, Kimberly Ann, “Global Agriculture and the American Farmer: Opportunities for U.S. Leadership,” Brookings Institution Press, 2017. An economist explores the harm caused by government subsidies for U.S. farmers, the federal mandate to use biofuels and the overuse of antibiotics in U.S. meat exports.

Qaim, Matin, “Genetically Modified Crops and Agricultural Development,” Palgrave and Macmillan US, 2016. A professor of international food economics analyzes how genetically modified crops can contribute to sustainable agricultural development and food security.

Articles

Daniels, Jeff, “Tough times in the heartland as some farmers hit by losses weigh exiting the business,” CNBC, Dec. 27, 2017, http://tinyurl.com/yaxhgc4c. A veteran economics reporter paints a grim picture of the financial burdens and tough choices that U.S. farmers already faced at the end of 2017, after more than four years of low commodity prices but before trade disputes erupted.

Linke, Maureen, and Josh Zumbrun, “Chinese Tariffs Hit Trump Counties Harder,” The Wall Street Journal, July 6, 2018, http://tinyurl.com/yave35g4. Accompanied by a national map that shows strong voter support for President Trump in the nation’s heartland in the 2016 election, two reporters conclude that China’s retaliatory tariffs in the trade conflict with Trump will cause the greatest pain to the counties that voted him into office.

Reports and Studies

“Climate Change Impacts in the United States,” National Climate Assessment, 2014, http://tinyurl.com/y93f47nm. The most recent assessment by the federally chartered U.S. Global Change Research Project examines the short- and long-term impact that human-induced and natural climate change will have on the geography, economy and health of the United States and its people.

“Trade War Rhetoric Shifts to Reality,” CoBank Knowledge Exchange, June 2018, http://tinyurl.com/y7vmcrpn. In a quarterly report, Colorado-based CoBank, which provides financial services to agribusiness, offers a detailed analysis of the impact that a trade war will have on every sector of the U.S. farm economy.

Bronars, Stephen G., “A Vanishing Breed: How the Decline in U.S. Farm Laborers Over the Last Decade Has Hurt the U.S. Economy and Slowed Production on American Farms,” Partnership for a New American Economy, July 2015, http://tinyurl.com/y82o56t9. An economist examines the economic ripple effect of the nation’s severe farm labor shortage, showing how it has stunted the growth of U.S. farms and cost the economy tens of thousands of jobs in related industries, such as trucking and equipment manufacturing.

Muhammad, Andrew, and S. Aaron Smith, “Evaluating the Impact of Retaliatory Tariffs on U.S. Soybeans in China,” Institute of Agriculture, University of Tennessee, May 4, 2018, http://tinyurl.com/y9qr8tqm. Researchers at the University of Tennessee’s Institute of Agriculture conclude that U.S. soybean exports to China, which totaled around $12 billion in 2017, are likely to drop by $4.5 billion if a 25 percent tariff is imposed.

Schnepf, Randy, “U.S. Farm Income Outlook for 2018,” Congressional Research Service, Feb. 27, 2018, http://tinyurl.com/y9gkdxl4. Writing just before the trade disputes began, a specialist in agricultural policy for Congress’ research arm provides a grim outlook for the U.S. farm economy in 2018.

The Next Step

Climate Change

Oates, Bryce, “In Farm Country, Grappling With the Taboo of Talking about Climate Change,” Civil Eats, July 11, 2018, https://tinyurl.com/yas2mt5j. Although more farmers are experiencing the reality of climate change, many are still not open to discussing its implications, according to a journalist.

Patel, Neel V., “Can Carbon Farming Reverse Climate Change?” The Daily Beast, July 17, 2018, https://tinyurl.com/y9r56m3b. A farming practice that does not disturb the soil would reduce the amount of carbon dioxide in the atmosphere by preventing it from being released during tilling or plowing.

Purdy, Chase, “The world’s biggest farms pollute more than any oil company,” Quartz, July 19, 2018, https://tinyurl.com/y7sx69o9. The five largest animal agricultural companies emit more greenhouse gases than major oil companies ExxonMobil, Shell and BP, according to a report by a research and advocacy group.

Mental Health

Bierschbach, Briana, “Minnesota is considering doubling its number of rural mental health counselors. To two.” MinnPost, March 28, 2018, https://tinyurl.com/ybzvhz2z. Minnesota legislators are considering a proposal to increase the number of state-employed rural mental health counselors from one to two to serve the state’s 100,000 farmers.

Ivanova, Irina, “Farmers in America are facing an economic and mental health crisis,” CBS News, last updated June 29, 2018, https://tinyurl.com/y8ktwmr9. U.S. farmers are coping with high levels of stress in their lives, according to advocacy groups, and suicide rates are higher in rural areas than in cities or suburbs. However, the federal Centers for Disease Control and Prevention says there are errors in a 2016 study on farm suicide rates.

Walrath, Rowan, “Stressed, Struggling, and Suicidal: America’s Farmers Are Begging for Mental Health Services,” Mother Jones, April 9, 2018, https://tinyurl.com/ybwlddpw. Farmer advocacy groups have asked Congress to provide funding for a mental health services program aimed at farmers, the Farm and Ranch Stress Assistance Network.

Organizations

The Agribusiness Council
P.O. Box 5565, Washington, DC 20016
1-202-296-4563
http://www.agribusinesscouncil.org
A communications network encompassing small and medium-sized agribusiness companies, university/research institutions and other nonprofit organizations, as well as public sector agencies relating to farming.

Agricultural & Applied Economics Association
555 E. Wells St., Suite 1100, Milwaukee, WI 53202
1-414-918-3190
www.aaea.org
This membership organization provides agribusiness professionals with information for applied economics in the fields of the environment, natural resources, food and consumer issues.

Agriculture Network Information Collaborative
10301 Baltimore Ave., Room 115, Beltsville, Maryland 20705
1-301-504-6999
www.agnic.org
This group, affiliated with the Agricultural Research Service of the U.S. Department of Agriculture, connects researchers to an alliance of institutions that provide access to quality agricultural information and sources.

American Farm Bureau Federation
600 Maryland Ave., S.W., Suite 1000 W, Washington, DC 20024
1-202-406-3600
www.fb.org
The nation’s largest farm lobby, advocating on behalf of farmers and ranchers. With affiliated branches in every state and U.S. territory, the organization analyzes problems facing the farming and ranching communities, crafts policies to solve them and lobbies lawmakers.

International Food and Agribusiness Management Association
5775 Wayzata Blvd., Suite 700, Minneapolis, MN 55416
1-763-412-1988
www.ifama.org
A group that brings together top executives, academics, policymakers and other stakeholders to stimulate strategic thinking across global food, plant and forestry systems.

The National Agri-Marketing Association
11020 King St., Suite 205, Overland Park, KS 66210
1-913-491-6500
https://nama.org
An association for professionals in marketing and agribusiness.

North American Agricultural Marketing Officials
1320 Research Park Drive, Manhattan, KS 66502
1-785-564-6758
http://naamo.org/
An international organization of farm marketing officials who provide advice and services to state and international food industries.

United Agribusiness League
54 Corporate Park, Irvine, CA 92606-5105
1-800-223-4590
www.unitedag.org
A membership organization that advocates for agribusiness employee benefits with state and federal lawmakers and educates members on compliance with state and federal regulations.

DOI: 10.1177/237455680424.n1