Harvesting for a Better Future
By John Conley and Zach Strebler
Farming in Ohio recently became more difficult since 2018 due to the United States(U.S.) placing tariffs on some Chinese goods coming into the country.
In response, China placed tariffs on imported agricultural goods flowing into China, vacating a free trade system that leaves farmers out.
“The tariffs were not something we were advocating for,” Sr. Director of State and National Policy, Jack Irvin, of the Ohio Farm Bureau Federation said. “By default, we were pulled into the tariff situation because a lot of agricultural products historically have gone to China. With the tariffs in place, it had an economic impact of making U.S. soybeans less competitive. So, China had incentives to look at other countries like Brazil or Argentina for other options aside from the U.S. We definitely saw a big change in buying behavior from China with the tariffs being put in place.”
TRADE WAR
The China-U.S. trade war started back in 2018, when president Donald Trump began placing tariffs and other trade barriers on China with the goal of trying to show that China is using “unfair trade practices”. The trade war has been criticized internationally, by multiple U.S. businesses and agricultural organizations, though most farmers continue to support Trump. Most politicians agree that pressure needs to be put on China to make changes.
Ohio farmers knew something needed to be done in terms of how trade was going to evolve after the tariffs were put in place.
“A lot of our farmers in Ohio are big proponents of free and open trade. There was some recognition that China doesn’t always play fair in some of these trade negotiations,” Irvin said. “The farmers understood a lot of the push for change in trade behaviors with China. At the end of the day, we want to support open markets as much as possible, because trade is vital to agriculture.”
Free and open markets are important to farmers because they would be able to produce what they deem fit to meet consumer demand. It also contributes to economic growth and transparency ensuring a competitive market. Consumers’ voices are heard in that their decisions determine what products or services are in demand.
“A lot of farmers were concerned with the tariffs because farmers want to be able to compete in a free market,” Communications Director, Jennifer Coleman, for the Ohio Soybean Association said. “Farmers favor a free market because they want to be able to sell their products without having to deal with additional problems. Since China wasn’t our main export after the tariffs, we saw a rise of export going to Mexico, but mostly from the western U.S. states. This left Ohio isolated in the eastern corridor so we didn’t see a rise of exports from Ohio.”
Since the tariffs, Ohio farmers have dealt with the soybean market collapsing. Soybeans from Ohio are among some of the best in the world and farmers were not able to export them as they were previously.
“Soybean prices have dropped 20-25% since the tariffs were placed, almost making the market for them nonexistent,” Coleman said.
Farmers also have received a hit in income from the tariffs and saw the farm economy become more complicated than it already was.
“Even before some of the trade issues, the farm economy was pretty tight and stressed. It is a global and competitive market so farm margins have been tight the past couple of years. Income for farmers has gone down about half in the last several years. That also predates the tariffs, so the tariffs have created a perfect storm of a tough farm economy,” said Irvin.
THE UNPREDICTABLE FACTOR-WEATHER
Now there is another factor that ties into how farming has been going in Ohio and it is the weather.
During 2019, the State Climate Summary for Ohio states that the state has experienced a significant increase in heavy rain events. Increases in winter and spring precipitation are projected to and will raise the risk of springtime flooding in the future.
“In general, Ohio had a very tough year in 2019 weather wise. Ohio as a whole had about a million and a half acres that were not planted, which is unheard of for Ohio,” Irvin said. “The vast majority of that was because it was too wet from spring making crops unplantable. There are a lot of factors of why farming is difficult across the state. All the different pockets of Ohio have different variables depending on geography, soil types and topography. Northern Ohio has had the majority of these challenges, but not all of them.”
Farmers in Ohio have struggled with weather for a long time and it looks like it will continue to remain a factor in how it contributes to farming.
“Ohio farmers are at the mercy of Mother Nature,” Coleman said. “Weather can change county by county, so it’s hard to say exactly how many farmers took a hit in income. Some farmers were not able to plant at all due to heavy rains and that caused them to not make a profit. Farmers can purchase crop insurance to alleviate some of the cost of not being able to plant or harvest.”
Crop insurance was used by a lot of Ohio farmers in 2019 due to the unpredictable weather and can be used in instances from droughts to excess moisture.
“Crop insurance is a program that is voluntary and has to be bought into. It’s similar to home or car insurance in a way,” Irvin said. “Its a partnership with the government that will help subsidize some of the premiums that are paid. A farmer will determine how much of a risk they want to take and there’s different levels of coverage you can get. The more coverage you get, the more expensive it is. These types of programs are in place for instance like last year when farmers couldn’t plant anything. It helps provide some coverage if you can get some planted or nothing planted. It was a program heavily used last year.”
Not every farmer has to commit to crop insurance, but the majority of them feel its needed, especially after a year like 2019.
“Not everyone uses crop insurance. It varies from about 80 percent corn and soybean farmers who have insurance to the 20 percent that would not have it. It changes from year to year,” Irvin said.
Crop insurance remains vital to the farming community, helping them recover from market fluctuations as well as natural disasters and acts as a safety net for farmers.
THINGS ARE LOOKING UP
While it all may seem like all is going wrong for farmers, the U.S. and China have begun to renegotiate their trade war, restructuring how they want the agriculture market to be through a deal known as the Phase One Agreement.
The two countries came to this trade deal agreement in January 2020, easing the tensions between the world’s two biggest economies. The deal offers massive export opportunities for U.S. farms and factories, and promises to protect American trade secrets.
“We certainly see a lot of hope and optimism with our trade negotiations that are currently going on,” Irvin said. “On top of the Phase One Agreement, the U.S. and Mexico have finalized a trade deal which is named the U.S.-Mexico-Canada Agreement, a rewrite of NAFTA(North American Free Trade Agreement). Canada is in the process and expected to finalize that this month. It would be a formal rewrite of the NAFTA deal and all those will collectively be positive for agriculture. These deals are still very new and remains to be seen what they can do, especially with the Coronavirus going on in China.”
Another factor playing into the Phase One Agreement is that China is currently dealing with the African Swine Fever, having a big impact in their pig population.
“This problem has impacted the demand needed for U.S, agriculture products. China raises more pigs than the rest of the world combined,” Irvin said. That is one of the major reasons they buy a lot of soybeans from the U.S. They have had hundreds of millions of hogs put down because of the fever and it will be interesting to see how it affects the Phase One Agreement.”
With these new deals beginning to take form, farmers have something to look forward to as far as the global agriculture market becoming what it used to be. The U.S. is taking the necessary steps to create that and will contribute to a more stable farming community.
John Conley: Writing, Editing
Zach Strebler: Video, Pictures, Audio
