CHICAGO – As U.S. President Donald Trump touted the signing of a U.S.-China trade deal in January, he told cash-strapped farmers they would soon need bigger tractors and “a little more land” to meet additional Chinese demand for U.S. agricultural goods.
His administration assured farmers that they would no longer need the billions in aid the government had provided to offset their losses from the trade war Trump launched with China in 2017.
Now, with Chinese buying of most farm goods still lagging their 2017 levels, the administration says it may extend the farm subsidy program for a third year – money farmers say they still desperately need. Such an extension would expand what has already been a massive industry bailout.
The about-face reflects vagaries in the so-called Phase 1 trade deal: China did not commit to a timeline for ramping up imports of U.S. farm goods to make the 2020 goal of $36.5 billion, up from $24 billion in 2017. It also underscores economic uncertainty as China slowly reopens ports, roads and factories amid a coronavirus outbreak that has killed thousands of people and spread globally.
Demand for U.S. soybeans and sorghum have also been curbed by another deadly disease – African swine fever – that has killed millions of pigs and shrunk China’s massive herd by about half since August of 2018, according to expert estimates. The crops are staple ingredients in animal feed.
Although the U.S. Midwest planting season is still about a month away, the slow ramp-up of Chinese purchases means farmers need guarantees of government aid now in order to invest in seeds and fertilizer and secure bank loans.
“The rubber is not hitting the road like we have been told it would,” said Doug Schroeder, chairman of the Illinois Soybean Association, who grows soybeans and seed corn on his 4,000 acre farm near Mahomet, Illinois.