Hancock agriculture reacts to proposed Chinese tariffs

 

            Wednesday marked the addition to a growing list of proposed tariffs announced by China against the United States.

            The tariffs include up to 25% on several agriculture commodities such as beef, pork, soybeans, corn and ethanol.

            The entire state of Iowa would prove to be in a bad spot if the tariffs go through.

            For example, $14 billion worth of U.S. soybeans were exported to China.

            Iowa is second in soybean production in the United State behind Illinois.

            The market reflected the concerns that many have as prices dropped on Wednesday; since then prices have climbed back to where they were before the announcements.

            For the time being, many farmers are waiting to see what happens.

            U.S. Sen. Chuck Grassley released a statement on Wednesday acknowledging the need for the U.S. to defend its intellectual properties to stay competitive, but state that agriculture shouldn’t bear the brunt of a trade war.

            Both the Iowa Soybean Association and U.S. Soy have released statements addressing the impacts the potential tariffs will have on soybean prices.

            “I think the timing of this is what’s difficult to stomach,” Iowa Soybean Association board member Brent Renner said. “The timing for us grain farmers here, the margins are so tight right now, there’s not a lot of room for error.”

            Renner noted that trade is an important part of the business and hopes President Donald Trump understands that distinction.

            Iowa’s agriculture has cultivated its relationship with China as a trade partner for a while now.

            “We worked for two decades to expand trade when it comes to soybeans, and for it to all be at risk so quickly, it’s disheartening to say the least,” Renner said.

            For local farmer Rusty Olson, the news is concerning.

            “But, China has to buy beans,” Olson said. “I don’t think South America [can] support their demand.”

            Olson said that it’s a two-sided conversation for the countries to reach an agreement.

            “We have two countries that have to figure out to come to terms on things, we need each other,” Olson said.

            Jamie Schmidt, a pork producer from Klemme, also has concerns.

            “We have 3% more product this year,” Schmidt said. “We got to have a home for it.”

            Lack of demand will hurt Iowa pork’s bottom line and the relationships that open those export markets.

            It’s a tough situation Schmidt acknowledged.

            “Maybe in the end it’ll do the U.S. good overall, but right now it’s hurting us,” Schmidt said.

            Hancock County Farm Bureau President Mike Hejlik has mixed feelings on the matter.

            “Most of it has been talks so far in my opinion,” Hejlik said. “It’s not necessarily a hundred percent thing that’s going to happen.”

             With both countries standing their ground right now, Hejlik pointed out that China has much more to lose in a trade war than the U.S. does.

            China exported $462.6 billion worth of goods to America in 2016.

            “Agriculture is usually the ones that get hurt because that’s the biggest thing that they probably import and one of the only things they probably need from us,” Hejlik said.

            Hejlik is glad that the Administration is taking a strong approach to protect U.S. interests; he knew that he might hurt a bit in the short term when Trump came into office.

            “Do I like to be on the short end of the stick as the farmer? Not really,” Hejlik said.

            He believes right now it’s simply a knee-jerk reaction, however.

            “Food for the world is food for the world,” Hejlik said. “If someone says they’re not going to buy from you, well what else are they going to eat?”