Farms bracing for trade war
♦ China’s tariffs on U.S. agricultural products are set to go into effect July 6 if the U.S. enacts tariffs on Chinese goods as planned.
The Northwest Georgia farming community is still hoping the trade war with China won’t kick in on July 6 as planned, but the impending tariffs are already taking a toll.
“The hog market is down, soybeans are down. It affects us immediately because the commodities markets react to bad news,” said Charles Jackson, who raises cattle and leads the Floyd County
Farm Bureau.
Agricultural products brought in nearly $84 million for Floyd growers last year, according to the latest farm gate report from the University of Georgia College of Agricultural and Environmental Sciences.
Irwin Bagwell raises corn and soybeans on the Cave Spring farm he owns with his brother. The former Floyd County commissioner said prices have been falling for the past several months in anticipation of the tariffs, which could lock American farmers out of the lucrative Chinese market.
“We won’t know the full effect until it’s put in place, but I can see it being detrimental,” Bagwell said. “You can always book some of your crop at the higher prices, which we have done.
“But you don’t sell it all before you harvest it because you don’t know what the weather’s going to be like.”
Poultry is the biggest local product, with 82 houses and 50,000 birds accounting for about $48.5 million in revenue last year. About 21,000 acres in the county are devoted to row and forage crops — including hay, corn, cotton and soybeans — with a value topping $10 million.
Livestock brought in about $16 million, with nearly $12 million of that coming from 25,000 head of cattle in various stages of growth.
While tariffs assessed by China would raise the price of U.S. pork, soybeans and other imported foods in that country, the extra money wouldn’t trickle down to local producers.
And Jones said there’s the added risk that Chinese buyers will seek another supplier. He noted that when President Jimmy Carter slapped a grain embargo against Russia in 1980, Brazilian farmers stepped up their output.
“We lost half our market,” Jones said. “In the short term, these things affect the market price. In the long term, it can create a whole new competitor.”
That points up another problem with agricultural operations: They don’t turn on a dime.
“Decisions have to be made for the long-term,” Jones said. “You can’t just put a crop in for a few months, and it takes years to get into the cattle business. So these knee-jerk reactions, as I call them, have an effect for a long time.”
President Donald Trump previously ordered 25-percent tariffs on $50 billion in Chinese goods in retaliation for Beijing’s forced transfer of U.S. technology and for intellectual property theft. Those tariffs, set to start taking effect July 6, were matched by China’s threat to penalize U.S. exports.
Beijing’s response drew the president’s ire. Last week, Trump told his U.S. trade representative, Robert Lighthizer, to target an additional $200 billion in Chinese goods for potential 10-percent tariffs.
Bagwell said U.S. producers are “at the mercy of our government to make trade agreements that let private companies do business unobstructed.” And he said it seems as if the food and agriculture industry always carries the brunt of a trade war.
Still, Bagwell said he is optimistic this time around because former Georgia governor Sonny Perdue is Trump’s Secretary of Agriculture.
“I’ve got a lot of faith in (Perdue) to protect the farmers,” Bagwell said. “He knows first-hand what tariffs can do to commodity prices. That’s a bright spot. He knows what’s at stake, I promise you.”
Jones, who’s been around a lot longer, is not so confident. He said there are a lot of unknowns right now, including whether the Trump Administration is involving Perdue in the negotiations.
“I’m not optimistic,” he said. “The history in the past has been to let the farmers take the short end of the stick. I hope that doesn’t happen now. But when it happens, all you can do is look at the situation and start voting different.”