A trade war between the United States and China has hit home, compounding an already challenging economic climate for Ellis County agriculture producers.
Rising costs of production, a prolonged drought, and now trade tariffs make putting food on the table a little more challenging.
The U.S. Department of Agriculture stated the tariffs from China have impacted items including soybeans, sorghum, milk, pork, fruits, and nuts. They were put in place due to tariffs enacted by the U.S. in July. The U.S. levied a 25-percent duty on $34 billion worth of Chinese imports, National Public Radio reported.
So what exactly does this mean for the local folks?
IMPACT TO PRODUCERS
John Paul Dineen has been farming for the past 25 years and feels the tariffs imposed by Washington add a little bit to the burden all producers carry. However, he also believes the tariffs will eventually help farmers to become stronger in the marketplace.
“I think that agriculture is hurting right now and this is certainly insult to injury because we had already bad commodity prices,” Dineen said. “Now you have got China putting a tariff on the soybeans. If we can hang in there and hang on, they are going to change their tune. I think that is going to be good for all of us.”
Dineen encourages the public to support local producers and rally around them during this time.
“When you go to that local farmer to buy his beef or his hay, try and give the price that he is asking and not talk him down on it,” Dineen said. “Know that he is supporting the country because food and fiber is the number one thing, in my opinion, for national security.”
The USDA reports that net-farm income is forecasted to decrease by $4.3 billion — down to $59.5 billion — this year. The projection would be the lowest level in nominal terms since 2006.
Lee Calvert is a third-generation farmer who has grown crops such as corn, cotton, wheat, and sometimes sunflowers. The former U.S. Marine feels it is not just the tariffs, but also the timing that they hit.
“It is poor timing because if this was five years ago, we had $15 soybeans and $7 corn,” Calvert said. “If the price dropped a few cents you were not looking at as big of an impact. Now that few cents are a huge percentage of your gross revenue.”
Calvert explained that a lot of times farmers are producing crops at or below their costs of production and can’t simply walk away from the investment.
A Texas A&M article reported that Texas’ exported sorghum accounted for 25 percent of U.S. production and accounted for $209 million annual.
Calvert noted expenses such as fertilizer, seeds, labor, and equipment maintenance are going up, as well. Nationwide, the USDA projects total production expenses to increase by $3.5 billion — or one percent to $359.2 billion this year.
Calvert also feels the tariffs levied by the U.S. will eventually level the playing fields so they can compete globally with others who are heavily subsidized by their governments and have fewer restrictions.
Fellow producer, Steve Patman, shared the thoughts of Dineen and Calvert about the current state of the agriculture in the county. He feels the tariffs are needed, but sees the weather conditions and fluctuating economy as contributing factors to the rough spell, too.
“What is killing us the most is the drought. Everything that we buy keeps going up with inflation," Patman said. “We are still getting the same prices for our crops that my granddaddy was getting back in the 1930s.”
Patman stated he follows the market closely and works to find a reasonable price for his crops, but when people get greedy everybody loses. He added that free trade is needed.
Dineen reminds people if they see an increase in stores, that extra nickel or dime does not go back to the producer, but to a third party. He added a producer is lucky to see a penny of that price increase.
To help in the short term, the USDA has been directed to authorize up to $12 billion in federal programs. Of that $12 billion, it is estimated that $11 billion will be used to help producers who were affected by the tariffs from China.
Larry Eubank, county executive director of the Ellis County Farm Service Agency, stated his agency would be the one that administers the program but has not heard when those funds will become available.
Eubank stated the feeling he has heard from producers about the tariffs vary.
“There are mixed emotions there. We have some producers that think the tariffs, in the long run, might be beneficial, but some think in the short term it might take its toll on our market,” Eubank said. “Although our wheat market was better this year than it was in 2017. Corn is bringing a little bit more then it did last year. The soybean market has definitely been hit, but that is not just here in Ellis County but across the country.”
Eubank estimates there are around 400,000 acres that are used for different agriculture purposes across the county.
Mark Arnold, Ellis County AgriLife Extension Agent, stated any time a market is lost it is going to affect prices. But with the loss of those markets, it provides the opportunity to develop new markets in its place.
“Developing new markets is going to have to happen through our commodity groups and through our politicians. We are going to have to find new markets for these products,” Arnold said. “The more markets that we have, the more options are available for our producers.”