While the full economic consequences of the tariff trade war remain to be seen, United Statea Secretary of Agriculture Brooke Rollins promised to have a plan, such as the Market Facilitation Program (MFP), ready for farmers, if needed.
In 2019, MFP provided direct payments to producers impacted by retaliatory tariffs, resulting in the loss of traditional exports, such as soybeans to China.
“Everything is on the table right now. Everything. I know that President Trump, whom I speak with regularly, realizes the state of the farm economy in this country,” Rollins said on Sunday at Commodity Classic.
“The last time, I know, he pushed Secretary (Sonny) Perdue to ensure we were able to make whole–as best as we could–some of those, and hopefully most of those, if not all, who had been hurt. We’re building the team at USDA (United States Department of Agriculture) to ensure we have the structure and the plan in place to allow us to move very quickly.”
USDA Economist Seth Meyers says he has been instructed by Secretary Rollins to be ready for a relief program, and he’s started calculating what possible relief could look like.
“Calculating something right today would not be helpful because we don’t know where we’re going to be, but absolutely, the Secretary instructs: ‘you need to be ready, have your pencil sharpened and have your tools available. Think about how you would proceed,’” Meyers said.
“We are ready in that backstop. It won’t be easy. We’ve talked a lot about different countries. We’ve talked about reciprocal trade, but we are indeed sharpening our pencils to be able to do what she’s asked us to do.”
American Farm Bureau President Zippy Duvall expressed alarm about potential harm to farmers resulting from imposing stiff tariffs on the top three agricultural markets by value for the U.S.
“Farm Bureau members support the goals of security and ensuring fair trade with our North American neighbors and China, but, unfortunately, we know from experience that farmers and rural communities will bear the brunt of retaliation.” Duvall said.
Of note, more than 80% of the U.S. supply of potash, a key fertilizer product, comes from Canada.
“Tariffs that increase fertilizer prices threaten to deliver another blow to the finances of farm families already grappling with inflation and high supply costs,” Duvall adds. “The uncertainty hits just as operating loans are being secured and spring planting approaches, leaving farmers in a tough spot.”
“Farmers are frustrated. Tariffs are not something to take lightly and ‘have fun’ with,” he said, a reference to a comment Trump made to farmers when he launched tariffs.
Not only do they hit our family businesses squarely in the wallet, but they rock a core tenet on which our trading relationships are built, and that is reliability. Being able to reliably supply a quality product to them consistently,” said Caleb Ragland, president of the American Soybean Association.
Neil Caskey, chief executive officer of the National Corn Growers Association (NCGA), said “we issued a study back in the fall that documented the implications of tariffs and specifically retaliation in a trade war — it’s not good for corn farmers, farmers in general.
“We did that in conjunction with the American Soybean Association, and it concluded a trade war is really only good for Brazil, and we hope to avoid that.”
The top two destinations for corn and ethanol are Mexico and Canada. According to Krista Swanson, chief economist, NCGA, 40 per cent of U.S. corn exports go to Mexico and more than 40 per cent of U.S. ethanol exports are shipped to Canada.
Meanwhile, what did Canada's agriculture minister say? That he will not be running for re-election.
