As the fall harvest winds down, yields have varied as much as the weather this year in Nebraska.
While farm income is projected to increase almost 5% because of U.S. government payments to farmers in the form of a trade war bailout, crop insurance payouts and other federal assistance, trade is still an important issue on the minds of producers.
On the positive side, The Associated Press reported Thursday that Beijing and Washington have agreed to reduce some punitive tariffs on each other’s goods as talks on ending their trade war progress.
The government bailout for ag producers came as a result of huge financial losses to farmers because of the ongoing trade war. A recent analysis by the Nebraska Farm Bureau estimates the ongoing retaliatory tariffs imposed by countries on U.S. agricultural exports will cost Nebraska producers $943 million in lost revenues in 2019. The projected losses would be in addition to tariff-related losses in farm-level income estimated between $695 million to $1.026 billion in 2018.
China’s imports of American soybeans and other goods tumbled 26.4% in the first nine months of this year following tariff hikes and orders to importers to find other suppliers.
Also, the new trade agreement between the U.S., Canada and Mexico continues to be stalled in the House of Representatives.
While ratifying the trade agreement would be a huge symbolic victory, as Canada and Mexico are Nebraska’s largest trading partners, a recent report from Rice University’s Baker Institute for Public Policy said changes coming to the textiles, apparel and agriculture sectors under the United States-Mexico-Canada Agreement (USMCA) are relatively minor.
Rep. Adrian Smith (R-Neb.), who was in Grand Island on Thursday, said USMCA is ready to go and the votes are there to pass it in the House.
Smith said it is a bipartisan agreement that contains items agreeable to both political parties, but he believes the current ongoing efforts by Democrats in the House to impeach President Trump are blocking lawmakers from passing the trade agreement.
“I think it would actually strengthen the speaker’s position by forwarding that bill (for a vote),” he said.
Smith said he supports the bipartisan trade agreement.
“It is important that we get this done, and it will strengthen our hand with other trade provisions, especially with China. And we are making progress with Japan,” he said.
Smith said he finds the breaking news that the U.S. and China are making headway in their trade negotiations “encouraging.”
“I do want to wait and see if things actually take place,” he said. “Everyone knows that China has been cheating. I am not a fan of tariffs, but we are in this and we need to see it through.”
According to the Nebraska Farm Bureau analysis, Nebraska soybean and corn growers will likely see the greatest cumulative losses. Soybean producers as a group are projected to lose out on nearly $589 million from retaliatory tariffs and corn producers are estimated to lose roughly $251 million.
Pork producers are projected to see $40 million in losses, while sorghum and wheat growers will collectively experience losses in the mid-$20 million range. Alfalfa growers are estimated to experience $9 million in losses, while dairy producers will likely lose out on roughly $3 million and dry bean growers collectively will lose $2 million.
Counting tariff losses for beef, ethanol and other byproducts could easily push Nebraska farmers and ranchers’ collective losses from trade tariffs past the $1 billion mark, according to the Nebraska Farm Bureau report.
According to The Associated Press, the U.S. Department of Agriculture projects farm income to be $88 billion this year. Of that, $19.5 billion will come from direct farm payment programs and another projected $10.5 billion will come from crop insurance indemnities. Farmers help pay for federal crop insurance, but the premiums are more than 60% subsidized.
In the past decade, farmers’ best year was 2013, when income reached $124 billion. Government payments accounted for only 19% of that.