Trade tensions with China make US farmers fear losses

A fruit-picker at work in an orchard in the state of Washington. [Photo by Wang Ying/Xinhua]

WAUSAU, the United States - Luck has not been on the side of American farmers in the midwest this year.

Having endured a record blizzard that swept through the region in mid-April, they now face another potentially more damaging threat - the China-US trade disputes triggered by the Trump administration that, among other things, put soybean farmers' income in jeopardy.

In early April, President Donald Trump proposed to slap tariffs on $50 billion worth of Chinese imports. China countered it by planning to levy duties on US exports to China, including soybeans, the main moneymaker for farms in Wisconsin.

"I'm already looking at a loss this year," Brad Kremer, a farmer in Pittville, told Xinhua in a recent interview.

Farmers in the region grow a mix of crops, including corn, soybean and wheat. Dairy products are also a source of income, but with milk prices tanking in recent years and corn barely breaking even, farmers rely solely on soybeans for profit, thanks to strong demand from China.

According to Don Lutz, a former statistician from the US Department of Agriculture or USDA, who has been running a farm in Scandinavia, Wisconsin, since retirement, the US exports some 60 percent of its soybean products.

Kremer said he did not grow soybean when he started farming two decades ago. Later on, when he saw the American soybean, known for its high oil yield, gradually gain popularity in China, he included the legume on his farmland.

According to USDA data, soybean plantation in the US has witnessed a significant uptick since the mid 1990s, when it entered the Chinese market. Over the next two decades, the total acreage ballooned from about 25 million hectares to over 36 million hectares.

Kremer said farmers are hoping that soybean will trade above $10 per bushel so that they can earn $50-100 from each acre (2.47 acres equal 1 hectare or 10,000 sq m).

Soybean futures for September, the usual harvest season, is $10.12, meaning farmers would have expanded their soybean acreage, had it not been for the potential tariff from China following the US government's threat of punitive measures.

"Farming is a volatile business," Kremer said. "To make things worse, most farms are heavily in debt."

With about $3 million worth of idle equipment, Kremer said he has already lost track of how much he owed the bank.

The prospect of agriculture subsidy promised by Trump is unappealing to farmers, who worry that any relief from the federal government will be unsustainable.

Lutz said any agriculture subsidy will have to pass tough legislative hurdles as conservative lawmakers would dig in their heels to oppose any legislation that will increase federal deficits.

The farmers interviewed by Xinhua said when they voiced their concerns to lawmakers, the latter told them it is up to the executive branch to handle the trade deals.