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Even in the best of times, farming is a precarious enterprise. There’s drought, floods, hail, wind storms and pests of all kinds to deal with.
The cost of fertilizers and pesticides always seems to be on the rise, equipment always seems to break down at the worst moment, and now, prices paid for the crops are below the expected break-even point.
And then, in Nebraska, there’s property taxes. But now the state’s farmers are being thrown a nasty curveball — again — as part of President Trump’s unprecedented on-again, off-again tariff war with just about every country on earth.
Nebraska’s agricultural leaders are worried big time. About 30% of the state’s crops are exported, so any shock to that system, such as fewer purchases from our biggest customers (China, Mexico and Canada) and lower profits from selling overseas due to stiff tariffs, is bad news for the bottom line.
Mark McHargue, the president of the Nebraska Farm Bureau, told Nebraska Public Media’s Brian Beach recently that farmers are looking at planting a crop this spring that probably will not turn a profit because of low prices.
John Hansen, the president of the Nebraska Farmers Union, said he’s getting calls from producers who have put pen to paper and are looking at losses of up to $150 an acre.
“We’re in a very fragile financial situation,” Hansen told NPM. “So we can’t afford much price depressing anything.”
2024 was a tough year, with farm income projected to be down 4% due to lower prices for corn, soybeans and wheat.
Now, on top of that, farmers are looking at the possibility of new tariffs.
It’s hard to keep track on what President Trump is doing, but there’s at least a 10% tariff now on all imported products and a 90-day pause on even higher tariffs after the stock market cratered last week.
China is one exception, with the president hiking duties up to 145% on that country, the largest customer of American soybeans. China responded with an 84% tariff.
Remember — tariffs are basically an extra tax on goods produced overseas. So you and I will pay more for stuff made in foreign countries, and buyers in China will pay more for American crops, or buy them elsewhere.
Officials with the Yeutter Institute at the University of Nebraska-Lincoln called it a “double whammy” for farmers of lost competitiveness and a loss of export markets. The head of the American Soybean Association called the Chinese tariffs a “gamble” and begged that they be withdrawn.
Back in 2018, farmers faced a similar brush-back pitch when the U.S., under Trump, sparred with China over the trade imbalance between the two countries. China retaliated with tariffs targeting American agricultural products.
The result was billions in losses for farmers due to decreased ag exports, according to the Yeutter Institute. Then President Trump tried to soften the blow by sending $28 billion in bailouts to farmers over three years. But it didn’t cover all losses and by then China, had found new countries, like Brazil, from which to buy crops.
A recent report from the Yeutter Institute (founded by the late Clayton Yeutter, a former U.S. Ag Secretary and a promoter of free trade) predicted that the latest trade war could be much worse because the latest tariffs are much broader than those in 2018. (And, unlike in 2018, farmers aren’t as financially able to take a hit.)
I’m no expert on trade, but it seems to work like this — if another country can make a product better and at a lower cost, it makes sense to buy it from them. Think Swiss cheese, French wine, Japanese cars and Dutch chocolate, plus all those cell phones, TVs and computers made in China.
American companies, seeking an extra buck, moved a lot of its manufacturing to places like Mexico, China and Vietnam because labor costs are much, much lower and the quality of work was comparable. It kept prices for a lot of things, from clothes to cars, affordable.
U.S. farmers are the best in the world, and can squeeze more bushels of corn and beans out of a field and raise more high-quality beef than their brethren elsewhere. So other countries came to us to buy corn, soybeans and wheat, which put bucks in the billfolds of rural America.
Sure, there’s some vital industries we can’t let go overseas completely.
But the system of trade that existed before the current tariff war seemed to work pretty well. And now, American farmers, who are already in a tough spot, are being forced to take a hit for a policy that doesn’t appear to make any sense.
