The White House recently announced that it would be providing an additional $16 billion in aid to American farmers affected by the trade war between the U.S. and China.
But the problem for American farmers has becomes bigger than something a bailout can fix.
“This trade thing is what’s brought on by the president and it’s really frustrating because he took away all of our markets,” Bob Kuylen, a farmer from North Dakota who grows spring wheat and sunflowers, told Yahoo Finance. “We live in an area where we’re kind of in the middle of nowhere. It costs us a lot of money — over $1 a bushel to get our grain to markets.”
In this July 13, 2017, photo, farmer John Weinand surveys a wheat field near Beulah, N.D., that should be twice as tall as it is. Drought in western North Dakota this summer is laying waste to crops _ some of which won't even be worth harvesting. (AP Photo/Blake Nicholson)View photos
A farmer surveys a wheat field near Beulah, N.D. (Photo: AP Photo/Blake Nicholson)
‘As low as I’ve seen them in a long time’
Since trade tensions began in 2018, farmers have faced major financial challenges, since China was once a major U.S. agriculture buyer.
And losing customers has become a major issue. Soybean farmers have been dealing with this, as China has turned to other countries like Brazil for soybeans. Kuylen said this is also happening for wheat farmers, as China has begun importing wheat from Russian regions.
“All these countries went to different countries to get their grain,” Kuylen said. “How are we going to get the relations back with them to buy our grain again and be our customers?”
Between 2016-2017, China was the fourth-largest wheat buyer in the world, importing more than 61 million U.S. bushels. In 2019, the top U.S. export destinations for wheat include Mexico, the Philippines, Japan, and Nigeria — China is not even among the top 10.
“Our prices are probably as low as I’ve seen them in a long time,” he told Yahoo Finance. “We were losing just about $70 an acre just by putting our crop in [the ground] this spring.”
While a deal between the U.S. and China would take months to be reached, farmers are remaining “cautiously optimistic,” Glenn Brunkow, a Kansas-based corn and soybean farmer said.
“Our hope is that the playing field is leveled up and these tariffs on the other side are taken away,” Brunkow said. “We feel like with the technology we have, the advantages we have, we can produce the crops as economically as anyone else in the whole world.”
FILE - In this June 11, 2019, file photo, President Donald Trump speaks at Southwest Iowa Renewable Energy, an ethanol producer in Council Bluffs, Iowa. Trump has repeatedly told U.S. farmers he loves and supports them and in return they largely continue to support him even though some of his promises, better trade deals and strong support for corn-based ethanol, haven't been fully kept. For many farmers and the politicians representing them criticizing the policy failures but not the president himself is a delicate dance. (AP Photo/Nati Harnik, File)View photos
President Donald Trump has repeatedly told U.S. farmers he loves and supports them and in return they largely continue to support him even though some of his promises, better trade deals and strong support for corn-based ethanol, haven't been fully kept. (Photo: AP Photo/Nati Harnik, File)
‘Farmers are profoundly wary of the trade war’
This isn’t the first time that the USDA has doled out aid to struggling farmers. The Trump administration pledged two installments of a farmer bailout program. The first round of payments totaling $4.7 billion was paid in September 2018, while the second round was distributed in December. By February 2019, the total aid payments reached $7.7 billion.
“Payments are a welcome help for the bottom line of Missouri farmers,” Blake Hurst, president of the Missouri Farm Bureau, told Yahoo Finance in an email statement. “Although the trade payments vary widely from county to county, they’ll keep more than a few farmers in business for another year. ...
“Having said all that,” the statement added, “farmers are profoundly wary of the trade war, embarrassed that ad hoc government subsidies are all that stands between many of us and financial ruin, and ready for the return of more normal times.”
More than half the bailouts are going to the top 10% of farmers.