State Farm Bureau presidents from across the Midwest have joined together to urge U.S. Secretary of Agriculture Sonny Perdue to work with President Trump to end the escalation of trade disputes with China that have and continue to threaten market opportunities for agricultural commodities and products.
In a recent letter to Sec. Perdue, presidents of 10 state Farm Bureaus, including Ohio, responded to President Trump’s call for the secretary to develop a plan to provide monetary compensation to farmers and ranchers who may be hurt by retaliatory measures China may take in response to proposed U.S. tariffs on Chinese goods.
“Ohio’s farmers know firsthand of the importance of having access to markets. With competition continuing to grow, having the ability to sell products around the world is a must if agriculture is to survive and be successful,” said Ohio Farm Bureau President Frank Burkett III. “The Chinese market for Midwestern agricultural products is nearly $4.5 billion dollars every year.”
Farmers desire market access
In the letter, the Farm Bureau presidents made it clear that farmers and ranchers want access to markets, not checks from the federal government in lieu of trade opportunities. The letter noted that farmers and ranchers have invested heavily in checkoff programs, trade missions and other activities to grow international markets, including significant resource allocation in China.
A recent report authored by Ben Brown, program manager for the Farm Management Program, and Dr. Ian Sheldon of Ohio State University’s College of Food, Agricultural, and Environmental Sciences, says that such tariffs would result in higher machinery costs, lower corn, soybean and pork prices for U.S. agricultural producers and a decrease in the net worth of Ohio farm families. A representative Ohio farm was used as a benchmark in the study cited in the report. It is estimated that the proposed tariffs could decrease the farm’s net worth by 6 percent and annual net income by 59 percent.
Other countries impacted
China is not the only concern when it comes to international trade. Tensions have been on the rise with Mexico and Canada as NAFTA renegotiations continue, and also the European Union as the White House continues to apply pressure for new deals. Retaliatory tariffs from Mexico, Canada and Europe against a list of U.S. goods, including several agricultural commodities, were scheduled to go into effect from late June to early July.
Background: U.S. / China Trade Dispute:
President Trump has announced the U.S. would begin the process to impose tariffs on Chinese exports due to concerns over Chinese practices that impact U.S. intellectual property. The Office of the U.S. Trade Representative released a list of $50 billion of Chinese electronics, machinery, and aerospace products for a recommended 25 percent import tariff. In response to the U.S. recommendation of tariffs, China released a list of products for a potential 25 percent retaliatory tariff. The targeted products include soybeans, cotton, beef, corn, wheat, sorghum, tobacco, orange juice, and cranberries, among other items. China’s potential tariffs will not go into effect until the U.S. proposed tariffs go into effect.