Farmers at AFBF convention still ask, “Who trusts China?”
AUSTIN, Texas -- As an ice storm swept over his farm in Nebraska this weekend, Tyler Ramsey and his family were lucky to get far more temperate weather in Austin, Texas, while attending the American Farm Bureau’s annual convention.
Ramsey can hope that luck is a sign of things to come for 2020. By contrast, 2019 was a rough year for his farming business, Ramsey said. Flooding and erosion in the fields, as well as cloudy days in July, led to an unsatisfying year for yield.
“We’re figuring for a 30% to 40% yield loss,” said Ramsey, whose family farm is 2,500 acres of soybeans and yellow corn in south-central Nebraska. “We still had some fields that yielded pretty good, but it really stacked up to be a yield loss for this year. The cards we were dealt kind of took down our potential yield.”
With the recent announcement of trade deals from the Trump administration, Ramsey, like many at the convention, sees the potential of the new year. Congress approved on January 16 a revised North American Free Trade Agreement known as the U.S.-Mexico-Canada Agreement, which President Donald Trump is expected to sign this week.
The White House also announced Phase One of a trade deal with China last week that it estimates will bring as much as $80 billion in purchases over the next two years. Topping it off, Trump and Secretary of Agriculture Sonny Perdue told attendees at the farming convention that they will soon be receiving the third tranche of the administration’s Market Facilitation Program payment.
“Some of the trade deals and things that are going on, maybe there’s some promise on that end,” said Rick Pearson, who farms in Buhl, Idaho. “I think the Mexico-Canada deal is good. I think the China deal is good.”
Pearson plants row crops on his farm, splitting his land between corn, wheat, and alfalfa. He diversifies his land based on where he “thinks it’s going to be good,” and this year wheat has promise, Pearson said. There may not be much money to be made in wheat, but the expenses are fewer.
Pearson said he enjoyed listening to the Sunday evening speech from Trump, who touted other trade agreements in addition to China and North America, such as in Japan, South Korea, and Brazil. Even so, Pearson said his outlook for 2020 is neutral and that he has one measure of whether or not it has been a good year: if he can pay his bills.
Many farmers received aid in paying bills this year through the administration’s Market Facilitation Program. Now that trade deals are starting to come in, there is cautious optimism that the exports to China could bring back revenues.
“Hopefully the price will come up,” said Roy Pence, who runs a small cow and calf operation out of the northwest part of Arkansas in the Ozark Valley. Pence is hoping to see prices for his calves increase to $2 per pound from about $1.40 now. “We’ve been sweating it out for a long time here.”
The concern is the possibility of China not doing what we expect.
“Obviously, when President Trump finally reaches a deal with China, that really will help quite a bit — as long as China follows through,” said Ramsey, the Nebraska corn and soybean farmer. “Just because something gets written down… I mean, who trusts China?”
Both Trump and Perdue insisted that there are measures in place with the phase one trade agreement with China that will allow for the U.S. to enforce the deal. Asked for details Monday, Perdue said the enforceability provisions are unilateral and allow the U.S. to reinstall punitive tariffs without retaliatory ability for China. The only thing China can do is withdraw from the entire agreement, he said. Orders and contracts from China will be monitored by the Office of the U.S. Trade Representative, he said.
Ramsey believes 2020 will present opportunities, though not many. He hopes to return to his regular crop rotation of corn and soybeans, after making a last-minute decision to plant more corn last year to improve yield and profitability. Last year was a 50-50 rotation of corn and beans, and this year, by planting another quarter of beans, Ramsey said he hopes it will be closer to 60-40.
“We want to plant beans, we want to grow great beans,” Ramsey said. “If it can’t be profitable, we’ll find another product to grow.”
How the Nebraska state government and Farm Bureau can develop other potential commodities for farmers to plant is something Ramsey said he’s watching.
Infrastructure and legislation that could allow for crops like hemp could provide more avenues of revenue for farmers, he said.
This story written by David Holley, a freelance writer for Agriculture.com