{"id":74200,"date":"2019-09-02T22:21:16","date_gmt":"2019-09-03T04:21:16","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/trade-war-is-draining-profits-for-montana-wheat-farmers\/"},"modified":"2019-09-03T04:21:16","modified_gmt":"2019-09-03T04:21:16","slug":"trade-war-is-draining-profits-for-montana-wheat-farmers","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/trade-war-is-draining-profits-for-montana-wheat-farmers\/","title":{"rendered":"Trade war is draining profits for Montana wheat farmers"},"content":{"rendered":"\n

\"In
In this April 20, 2018, photo, Michelle Erickson Jones poses for a photograph in front of a tractor and grain silos at Erickson Farm in Broadview, Montana. The ag industry is keenly aware that China\u2019s trade policies have kept U.S. products out of the market there, said Jones, Montana Grain Growers Association president.<\/span>Associated Press<\/span><\/figcaption><\/figure>\n<\/p>

On a hot August day in southern Montana, Michelle Erickson-Jones climbed onto her green combine, a massive machine that reaps and separates ripe grain. August is harvest season, so Erickson-Jones was focused on gathering the mature wheat on her farm and preparing it for sale. \u201cWe cut somewhere around 250 to 300 acres a day,\u201d she told me over the phone, even as she maneuvered the combine through a field. All told, she and her family spent 21 days collecting wheat this year \u2014 a good harvest.<\/p>\n

Despite that bounty, problems arise once the wheat is sold. Ongoing international trade disputes are causing Montana wheat farmers\u2019 earnings to stagnate. With around half a million dollars in operational costs and less than $25,000 in subsidy payments from the federal government, Erickson-Jones, a fourth-generation farmer, will not make a profit this year. \u201cIt\u2019s been three years since I\u2019ve drawn anything but a break-even budget, and that\u2019s hinging on good (wheat) production,\u201d she said.<\/p>\n

This struggle to make ends meet is shared by many Montana producers. Along with environmental threats like heat waves and flooding, today\u2019s farmers must contend with the chaos of modern political conflicts. With the U.S.-China trade war in its second year and international agricultural relationships uncertain, \u201cIt\u2019s really hard to make any kind of profit,\u201d said Lyle Benjamin, a farmer and president of the Montana Grain Growers Association. As a result, farmers \u201care taking a real, hard look at whether they really want to stay farming or not.\u201d<\/p>\n

American farmers depend on international trade. The U.S. is one of the world\u2019s largest agricultural exporters, shipping over 20% of its farm-grown products overseas each year. In Montana, wheat is the state\u2019s biggest agricultural commodity, with farmers exporting $565 million worth in 2017.<\/p>\n

Much of Montana\u2019s wheat goes to Japan. But the future of that longstanding relationship was thrown into doubt in 2017, when the U.S. withdrew from the Trans-Pacific Partnership, a now-defunct trade agreement among 12 countries, signed in 2016. The deal that replaced it would tax U.S. wheat at a higher rate than Canadian and Australian wheat, starting in April 2020, putting this vital market at risk, said Steve Mercer, vice president of communications at the U.S. Wheat Associates. The Montana Wheat and Barley Committee, a lobbying group, estimates that the withdrawal is costing Montana wheat farmers around $150 million annually. However, a new trade deal the U.S. and Japan are negotiating now may retain the country\u2019s equal footing with Canada and Australia, preserving Montana\u2019s top wheat market.<\/p>\n

The ongoing U.S.-China trade war is putting additional strain on Montana farmers. Since early 2018, President Trump has imposed tariffs on more than $250 billion worth of Chinese goods, from steel to textiles. China retaliated with tariffs on $110 billion of U.S. products, including soybeans, corn and wheat. And both countries have announced additional taxes, set to begin in September. The back-and-forth hikes have caused the price of a bushel of Montana wheat \u2013 which typically hovers around $5.50 \u2013 to drop by $0.41, said Benjamin.<\/p>\n

Nationwide, farmers\u2019 economic losses have totaled billions of dollars; in response, the federal government last year started doling out subsidies through the Market Facilitation Program. Farmers and ranchers across the country have received about $8.59 billion since then, 84% of which has gone to Midwestern soybean farmers as of April, according to the Great Fall Tribune. Montana farmers, on the other hand, received less than 1%. This year, farmers and ranchers across the country impacted by the tariffs are receiving at least $15 per acre. These payments will make up for soybean growers\u2019 short-term losses, \u201cbut that will not be true of all producers everywhere,\u201d said Patrick Westhoff, director of the Food and Agriculture Policy Research Institute at the University of Missouri.<\/p>\n

No thorough analysis has been done on how the subsidies impact wheat farmers specifically, but \u201cyou\u2019d be hard-pressed to find a farmer who would say that this program fully offsets what they lost in sales from the tariffs,\u201d said Josh Tonsager, vice president of policy and communications at the National Association of Wheat Growers.<\/p>\n

Along with the immediate concern of revenue losses, this trade conflict may also provoke more lasting problems. The subsidies are \u201cnot a sustainable approach for having a healthy U.S. farm economy,\u201d said Amanda Countryman, an associate professor in agriculture and resource economics at Colorado State University. China is the largest export market for U.S. agricultural products, and payments to farmers can\u2019t compensate for the erosion of that relationship, or the trust that was its foundation, Countryman said; the payments are merely a \u201cBand-Aid on a much deeper wound.\u201d<\/p>\n

And the trade war between the U.S. and China shows no signs of stopping. With Trump hinting at his regrets about the continuing trade conflict last weekend, just 48 hours after he pledged to raise tariffs on China, farmers are uncertain about the next round of U.S.-China trade negotiations, scheduled for September. It may still be a while before producers like Erickson-Johnson turn a profit. \u201cI would like to keep operating,\u201d she said, but the trade war \u201cdefinitely puts a little bit of a dimmer on the future of agriculture.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Today\u2019s agricultural producers battle both environmental threats and geopolitical conflict<\/p>\n","protected":false},"author":1,"featured_media":74201,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[28],"naviga_topic":[],"class_list":["post-74200","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-headlines"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/74200","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=74200"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/74200\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/74201"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=74200"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=74200"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=74200"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=74200"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}