US farmers fret and wait amid trade war

MINNEAPOLIS — Many anxious American farmers are delaying purchases and investment while hoping for a truce in a U. S.- China trade war that has left their crops at a competitive disadvantage abroad.

The longer the Trump administration’s tariffs remain in place, the more China’s retaliatory tariffs against American exports stand to hurt U. S. soybean and pork producers.

President Donald Trump’s administration on July 6 carried out its threat to impose 25 percent tariffs on $ 34 billion worth of Chinese products, alleging that Beijing steals U. S. technology or pressures companies to hand it over. China responded with similar duties on the same amount of U. S. imports, including soybeans and pork. Last week, the administration announced a second possible round targeting $ 200 billion worth of goods. Beijing vowed “firm and forceful measures” in response.

“From a farmer’s perspective, all you can do is wait and hope, which aren’t very good options,” said Michael Petefish, who grows soybeans and corn near Claremont in southern Minnesota. “If you can afford not to be selling your beans now, just put them in the bin and store them and wait for better markets. That’s about all you can do.”

Wanda Patsche and her husband, Chuck, stand to be doubly affected. They grow corn and soybeans and raise pigs near Welcome in southern Minnesota. She said the main thing they and their neighbors have done to cushion themselves is to delay investment in their farming operation.

“There will be no equipment purchases, no improvements, just holding our own. Basically a holding pattern. And hoping things are going to get worked out fairly quickly,” she said.

Farmers often hedge against price downturns by selling part of their crop on the futures market, locking in an early price for crops that they will harvest in the fall. Patsche said she and her husband marketed a little of their 2018 crop so they can count on a profit for those bushels, but they’d take a loss if they sold more at current prices. So they’re hoping the markets get good news that will send prices back up.

One of the few things farmers can do for now is to make themselves heard. Petefish and other farmers from the American Soybean Association and the American Farm Bureau Federation descended on Capitol Hill on July 11 to tell lawmakers and congressional aides how they stand to become collateral damage in the trade war unless there’s a resolution soon.

“A lot of people aren’t very optimistic, unfortunately,” said Petefish, president of the Minnesota Soybean Growers Association. “They’re not sure of the end game, and that’s what everyone is trying to ascertain: What is the plan?”

Trump trade adviser Peter Navarro said last month the administration would have farmers’ backs, Petefish recalled.

“Right now, farmers don’t know what that means,” he added.