China targets US agriculture as farmers caught in trade war crosshairs
What is the incentive for China to reach a major deal on trade?
Former CCTV America business anchor Phil Yin with the latest on U.S. trade talks with China.
Bad weather and a tumultuous trade relationship between the U.S. and China have already resulted in a bad year for American farmers — but that outlook darkened on Monday, after Beijing pulled its purchases of U.S. agricultural products.
"This is a body blow to farmers and ranchers all across the country," Dale Moore, executive vice president of the American Farm Bureau, told FOX Business. "That’s one of the things that we are feeling the effects of, and this is on top of a year when mother nature has been a terrible business partner in many parts of the country. It’s just a really tough, tough time for farmers and ranchers in this country."
Shares of industrial, farming, oil and transportation companies have plummeted, a direct result of the increased tensions between the world’s two largest economies. Since 2017, farmers have lost more than half of their market exports in terms of value, plunging to about $9 billion in exports from close to $20 billion two years ago, Moore said.
And while aid from the Trump administration has helped to cushion the blow — the White House approved a second $16 billion funding package to offset the trade war’s effects on American agriculture last week — Moore stressed that negotiators need to return to the table in order to strike a deal. (Talks resume next month in China).
"We’ve seen impacts on virtually every commodity," he said. "You cannot say it’s an idle threat, because China has been hammering us for the past couple of years. We went from near $20 billion to $9 billion. We’ve already taken a $10 billion hit."
Plus, farmers and ranchers feel like they’re caught in the crosshairs of a fight that’s larger than them — including disputes over intellectual property theft, industrial goods and steel and aluminum tariffs, he said.
Compounded with bad weather — farmers in the Midwest saw one of the rainiest seasons on record this year, stunting their crops’ growth — farmers are facing an increasingly dire situation.
In a sign indicative of how tough things are in agriculture, Moore said, farm bankruptcies are on the rise, above the historical average.
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Since last June, there have been a staggering 535 Chapter 12 bankruptcy filings, a 13 percent increase. Kansas, Minnesota and Wisconsin had the highest number of filings.
As a result, Congress passed the Family Farmer Relief Act to update the eligibility requirements for Chapter 12 bankruptcy, raising the debt limit from $4.1 million to $10 million — giving more farmers the chance to declare bankruptcy, thereby offering their producers and creditors a better chance to recognize and avoid mass liquidation.
"We’re hopeful the president will sign that bill," Moore said.