Farmers are ‘getting hit twice’ by fallout from trade war, flooding

Source: By Kansas City Star • Posted: Wednesday, April 10, 2019

JEFFERSON CITY, Mo. — The two grain bins on Bruce Biermann’s farm near Corning, Missouri, could not withstand the strong currents of the Missouri River.

With 4 feet of water pressing from the outside and grain swelling from moisture inside, the bins burst.

At 71, Biermann is looking at more than a $100,000 loss. And he’s not “in this boat alone” — a bit of humor that helps keep him afloat in a troubling time. Like many farmers in the Missouri River Basin, Biermann had been holding onto crops for better prices after years of depressed markets. In his case, 8,200 bushels of soybeans and 12,000 bushels of corn.

Farmers were already grappling with the financial strain from low prices, a consequence of President Donald Trump’s decision to escalate a trade fight with China and other major trading partners.

Then, the flood happened. Now, farmers like Biermann have little recourse for recouping their losses through the federal government. The U.S. Department of Agriculture’s $3 billion Wildfires and Hurricanes Indemnity Program doesn’t cover crops that have been stored, something Midwestern lawmakers are scrambling to change.

“It seems like the hand that’s feeding the world is getting bit,” Biermann said. “Farmers can only hang on for so long.”

As farmers follow the fallout from Trump’s trade war, they are also anxiously waiting for Congress to take action to help them recover from the flooding. A partisan standoff over aid to Puerto Rico could prolong their wait, but lawmakers from the Midwest are pushing their colleagues to move quickly to help Midwestern farmers.

Rep. Emanuel Cleaver, D-Missouri, who toured the damaged northwest Missouri farms in his district last month, said tariffs and the floods have combined to create one disaster, which farmers are struggling to survive.

“Many of the farmers feel as though they’re getting hit twice and the government is looking the other way,” Cleaver said.

A national glut of crops and a dearth of international buyers have caused prices to drop. In response, farmers are storing more than they normally do, according to Pat Westhoff, the University of Missouri Food and Agricultural Policy Research Institute director.

As of March 1, farmers had stored 2.72 billion bushels of soybeans nationwide, according to the USDA, a 29 percent increase over the same date last year.

The trade fight has played a role in those plummeting prices, Westhoff said.

To offset the difference, the USDA has offered $8 billion in payouts to farmers. However, the payouts didn’t cover a farmer’s entire unsold yield, Westhoff said. For example, soybean farmers got $1.65 per bushel when $9 per bushel is often a break-even price.

Rick Oswald, a fifth-generation grain farmer with about 2,000 acres in Atchison County, Missouri, sold his soybeans at a loss of $8.70 per bushel. He doesn’t expect prices to get better.

“I ended up taking less than ($9 a bushel) for them because I couldn’t see anything changing with trade, with the disputes with China,” Oswald said. “One reason that wasn’t going to change? Once China stopped buying, we started building a soybean surplus, and we were looking at a billion-bushel surplus.”

Oswald, a member of the Missouri Farmers Union and a Democrat, is critical of Trump, who he said “came in and upset the apple cart,” after farmers invested years and many of their dollars to establish new markets.

“You have this government come in and start to stir the pot,” Oswald said. “We have come in and stressed over and over, year after year, we need steady, reliable markets. Once you lose the opportunity to sell something you grew, it’s just going to stay on the farm. Just like a billion bushels of unsold soybeans.”

Oswald said he knows he’s an outlier among his neighbors in criticizing Trump, who won Missouri and Kansas by double digits in 2016 with huge support in rural areas.

It’s not a partisan issue, Oswald said. He was critical of the farm policies of President Jimmy Carter, a farmer and a Democrat, too.

Though he was able to offload his soybeans, Oswald lost all of the corn he had stored on his farm near Langdon in Atchison County, Missouri, because of roads left impassable by flooding.

Like several farmers, Oswald had little notice to move the grain. Even then, he thought with his farm protected by a federal levy that he would be spared. Much of Oswald’s anger has been directed at the U.S. Army Corps of Engineers, which has come under scrutiny by federal and state lawmakers for its river management.

“I have four big wet piles of corn that are laying in a mass of broken galvanized steel and it’s wet and it’s becoming spring and that’s all going to start to grow,” Oswald said.

Without taking into account the destruction of the bins, it’s a $70,000 loss, he said.

Travis Green, 33, who operates farms in Kansas and Nebraska, stored 25,000 bushels of yellow corn in a pair of grain bins in White Cloud, Kansas, near the Missouri River.

One of the bins “literally just blasted open,” after it filled with floodwater. The other was uprooted — destroying an estimated $100,000 worth of corn. On top of that, he’s unsure whether he’ll be able to plant anything this year because of the water damage.

“It’s just really tough to bounce back,” Green said.

Green said he usually tries to store corn until April to get a premium price. But he’s been storing more in recent years because of the trade war.

“We’ve been hurting for three years or something with these low prices, low commodity prices, and something needs to happen or it’s taking people out of business,” Green said.

“I’m stressed out about the trade policies … and now with this thrown on top it feels like you’re beating your head against the wall. It feels like there’s no hope.”

Ryan Flickner, the policy director of the Kansas Farm Bureau, said last month that farmers are nervous. He said he sometimes brings up Trump’s comments about farmers being patriots who are willing to weather the trade fight and asks them if they still feel confident that the strategy will pay off in the long term.

“If we’re not in business, it’s really hard for us to be a patriot on the farm,” Flickner said.

Sen. Jerry Moran, R-Kan., said he carries a photograph of an overflowing grain elevator to show the struggle his state’s farmers are facing because they’re unable to move their product overseas. The flood exacerbated that struggle.

“There’s a lot of grain that has been stored that has been damaged as a result of floodwaters. And if it’s true in northeast Kansas, it’s got to be true in Iowa, Nebraska and Missouri,” Moran said.

Sen. Roy Blunt, R-Mo., said farmers are generally supportive of the president’s effort to resolve unfair trade practices, but they’re beginning to feel the strain, especially with disasters like the floods adding to their problems.

Biermann said watching the trade talks gives him something to cheer for a moment and then “something happens and you are back at square one.”

“That’s been going on for how many months? Nothing has been accomplished yet,” Biermann said. “They are continuing working, but we are not even getting the cost of production back at today’s prices.”

Years of low prices have caused farmers to carry higher debt loads. Without federal aid, farmers would be going into further debt, Oswald said.

Sen. Chuck Grassley, R-Iowa, joined by Blunt and other Midwestern Republicans, has crafted legislation to expand the Wildfires and Hurricanes Indemnity Program to apply to commodities stored on farms and crops that were prevented from being planted in 2019.

The Midwestern Republicans plan to offer it as an amendment the next time the Senate votes on its disaster relief bill, which failed to pass the Senate last week because of a disagreement over aid to Puerto Rico.

Resolving the impasse could be key to ensuring that farmers in the Midwest survive the financial damage from the floods. On top of the amendment dealing with crops, Republicans are seeking to amend the bill, which focuses on 2018 disasters, to provide aid to victims of this year’s Missouri River flooding.

With the bill stalled, Oswald said he wished Congress would deal with aid for farmers and Puerto Rico separately.

“I’m just sitting here looking at the water every day and looking at my losses and I’m waiting for them to come together and do something,” Oswald said. “It’s pretty hard to do. It’s pretty maddening.”

“I’m stressed out about the trade policies… and now with this thrown on top it feels like you’re beating your head against the wall. It feels like there’s no hope.”

Travis Green, 33, who operates farms in Kansas and Nebraska