National wheat growers group opposes tariff escalation
Following the ongoing trade talks between China and the U.S. has been about like watching a crop of winter wheat grow in Oklahoma.
Farmers had high hopes that tariffs enacted in 2018 would create a bumper crop of fair trade agreements by March 1 between the two commercial giants for wheat and for other types of commodities and products.
But, as is sometimes the case, that harvest didn’t happen.
Instead, growers learned on May 10 those negotiations had stalled when the Trump administration decided to increase tariffs from 10% to 25% on $200 billion of additional imported Chinese goods.
That prompted the National Association of Wheat Growers to join the American Soybean Association and the National Corn Growers Association in issuing a statement opposing the strategy.
Together, the organizations represent farming operations that produce wheat, soybeans and corn on about 171 million acres of U.S. farmland.
“U.S. wheat growers are facing tough times right now, and these additional tariffs will continue to put a strain on our export markets and threaten many decades' worth of market development,” Ben Scholz, wheat growers association president and Texas wheat farmer, stated as part of the release.
“Further, members from both sides of the aisle and chambers have reservations about the Section 232 tariffs in the U.S.-Mexico-Canada Agreement. Today’s announcement adds on another political barrier, which may hinder Congressional consideration of (that) agreement.”
Representatives of the other organizations echoed similar concerns.
Growers have been feeling trade impacts since the president first imposed a 25% duty on $50 billion worth of Chinese goods in July 2018, and later, a 10% duty on the additional Chinese products that his tariff increase hit Friday.
The tariffs are impacting not only farmers, but all industries across the United States.
Meanwhile, trade mitigation payments offered to farmers through the U.S. Department of Agriculture’s Farm Services Administration only are providing limited relief.
Those payments began going out Jan. 15, but only cover the first 50% of a farm’s documented production of a particular commodity.
Soybean producers are getting the most assistance, at $1.65 per bushel, given that China targeted soybean imports into its country from the U.S. with tariffs as part of the ongoing dispute.
Eligible wheat growers are getting 14 cents a bushel, while corn growers are getting a penny a bushel.
Jimmie Musick, a wheat grower from Sentinel who is past president of the wheat growers association, said Wednesday farmers understand Trump’s trade goals.
While he acknowledged the trade mitigation payments provide limited help, he added, “there probably aren’t many farmers who are going to send any of that back.”
But Musick said his bigger concern is that the nation’s export markets currently are at a standstill, which means farmers are losing trade opportunities daily in markets they spent a lifetime cultivating.
At the same time, commodity prices are declining because of the ongoing difficulties, which in turn creates additional problems for farmers who are trying to make ends meet.
“We are going to start wheat harvest in three weeks or a little less, and we are looking at a devastated wheat market that is really going to affect farmers and their relationships with their bankers,” he said. “That is really going to create some serious situations out there.
“The bottom line is, it will take years to get these markets healed up and back to where they need to be. We are looking for trade, not aid."