American farmers enjoy a trade surplus. Trump could wipe it out

Trade deficits aren't a concern for America's farmers ... but you wouldn't know it from what President Donald Trump h...

Posted: Jul 26, 2018 2:13 PM
Updated: Jul 26, 2018 2:13 PM

Trade deficits aren't a concern for America's farmers ... but you wouldn't know it from what President Donald Trump has been saying.

The US agriculture industry has long exported far more products than the nation has imported. Selling crops, nuts, meat and other goods abroad are vital part of the sector, with more than 20% of agricultural production sent abroad. That has led to a trade surplus, which totaled $20.3 billion in fiscal 2017 and is projected to grow to $22.5 billion in this fiscal year, according to the US Department of Agriculture.

Trump, however, has repeatedly said that American farmers are suffering under bad trade deals with other countries. His solution to help them and other industries? Slap tariffs on imports, which has prompted other countries to retaliate by doing the same to American products.

China has since added a 25% tariff to soybeans, on top of the existing 3% levy. Its tariffs on pork are now 70%, rather than the previous 20%, said Veronica Nigh, an economist with the American Farm Bureau Federation, an industry group.

Trump's moves are threatening to disrupt the industry's trade balance. Prices are falling, and exports are dropping, experts say. Other countries are looking to move in on American farmers' turf.

"We've run a trade surplus in agriculture," said Thomas Hertel, a professor of agricultural economics at Purdue University. "Any tariffs levied against us in agriculture will imperil that. It's making the US less competitive."

The upheaval among farmers and ranchers -- who are among Trump's supporters -- led the administration to unveil a $12 billion aid package Tuesday. It will send payments to certain producers and purchase surplus commodities for distribution to food banks and other nutrition programs.

Many farmers and their supporters on Capitol Hill, however, say they want trade, not aid. The sector's reliance on trade is much higher than other industries, Nigh said.

The United States is actually the world's top exporter of food and agricultural products, according to the Department of Agriculture. Some 70% of cotton and tree nuts grown here are sold to other countries, as are 50% of the wheat, rice and soybeans. Beef and pork are also among the nation's largest exports.

Once US farmers bow out of a market, other countries rush in. Already, Brazil is boosting its soybean exports to China. And once new trade partnerships are established, it may be tough for American farmers to return, said Steven Kyle, an agricultural economist at Cornell University's Dyson School of Applied Economics and Management.

Trade is very important to Russell Boening, who joined his father's farm near Floresville, Texas, in 1981. He grows corn, grain sorghum, cotton, wheat and watermelon and runs a beef cattle and 500-cow dairy operation. He typically exports about half of the grain sorghum, mostly to China, as well as a large share of the cotton. Trade has also helped him indirectly by keeping the prices of other products up.

Trump's recent trade feud with China, however, prompted prices of grain sorghum to plummet 25%. Now, most of his crop that would have been on boats is sitting in storage facilities. He's hoping prices will rise in coming months, especially since storing his products is costing him money too.

"It's going to cause [us] hardship," Boening said, adding he may have to put off purchasing some new equipment. Since his farm is established, he feels he can weather it better than some newer operators who may have more debt. But he fears he'll have to make more cutbacks if the tariff wars continue.

The five top markets for American agricultural goods are Canada, China, Mexico, Japan and the European Union. The US runs trade deficits with Canada, Mexico and the EU when it comes to farm products, but it exports about five times what it imports from China and about 18 times what it buys from Japan, according to the Department of Agriculture.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 313166

Reported Deaths: 7228
CountyCasesDeaths
DeSoto21496257
Hinds20294414
Harrison17814309
Rankin13573278
Jackson13411246
Madison10066217
Lee9962173
Jones8364163
Forrest7649152
Lauderdale7181240
Lowndes6370145
Lamar621686
Lafayette6171118
Washington5323133
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Oktibbeha461498
Panola4561105
Pearl River4499145
Marshall4397103
Warren4380121
Pontotoc419572
Monroe4100133
Union409076
Neshoba4026176
Lincoln3950110
Hancock377786
Leflore3487125
Sunflower335790
Tate332484
Pike3301105
Scott315373
Alcorn311968
Yazoo310769
Itawamba299477
Copiah296465
Simpson294788
Coahoma294379
Tippah287768
Prentiss279560
Adams269582
Marion268880
Leake266273
Wayne262341
Grenada260386
Covington256381
George246848
Newton246061
Winston226881
Tishomingo225967
Jasper220848
Attala214173
Chickasaw207157
Holmes188673
Clay184754
Stone182033
Tallahatchie178140
Clarke177879
Calhoun170132
Yalobusha163337
Smith162234
Walthall133845
Greene130333
Lawrence128323
Montgomery126742
Noxubee126734
Perry125938
Amite122842
Carroll121728
Webster114532
Jefferson Davis106932
Tunica104826
Claiborne102230
Benton99125
Humphreys96133
Kemper95428
Franklin83623
Quitman80216
Choctaw76118
Wilkinson66930
Jefferson65428
Sharkey50317
Issaquena1686
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Alabama Coronavirus Cases

Cases: 530988

Reported Deaths: 10978
CountyCasesDeaths
Jefferson765291522
Mobile40971804
Madison34751503
Tuscaloosa25775452
Montgomery24329589
Shelby23431249
Baldwin21131308
Lee15884171
Calhoun14501314
Morgan14293279
Etowah13831353
Marshall12222223
Houston10567281
Elmore10061205
Limestone9960151
Cullman9664193
St. Clair9655243
Lauderdale9424241
DeKalb8830186
Talladega8223176
Walker7235277
Autauga6920108
Jackson6810112
Blount6660137
Colbert6298134
Coffee5511119
Dale4831111
Russell441138
Chilton4290112
Franklin425782
Covington4121118
Tallapoosa4027152
Escambia393376
Chambers3563123
Dallas3551151
Clarke351061
Marion3118101
Pike310877
Lawrence300298
Winston274472
Bibb260764
Geneva249977
Marengo249764
Pickens234461
Barbour230857
Hale222977
Butler215969
Fayette212362
Henry188744
Cherokee184845
Randolph180241
Monroe177440
Washington167339
Macon159150
Clay156256
Crenshaw152257
Cleburne148941
Lamar142535
Lowndes138853
Wilcox127130
Bullock123041
Conecuh110529
Perry107726
Coosa107228
Sumter104532
Greene92334
Choctaw60624
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