Reynolds says Trump may help Iowa farmers hurt by trade tariffs

Source: By William Petroski and Donnelle Eller, The Des Moines Register • Posted: Thursday, April 12, 2018

Gov. Kim Reynolds said Tuesday the Trump administration is working on plans to help Iowa farmers hurt by Chinese tariffs on agricultural commodities, but she was short on details about possible help while recognizing the seriousness of a possible trade war.

Reynolds, a Republican, made her comments surrounded by leaders of Iowa farm and commodity groups. She said she wanted to offer assurances they are doing everything possible to stand behind Iowa farmers and to encourage a quick resolution to the Trump administration’s trade dispute with the Chinese. They all agreed the tariffs could have a devastating impact on Iowa’s agriculture sector and farm equipment manufacturers.

Reynolds said she talked Tuesday morning with U.S. Agriculture Secretary Sonny Perdue, as well as Office of Management and Budget Director Mick Mulvaney. Both assured her, she said, that the U.S. Department of Agriculture has the authority to mitigate market disruptions. She said she also talked Monday with former Iowa Gov. Terry Branstad, who is now U.S. ambassador to China.

Asked if the Trump administration’s plan involves federal price supports for farm commodities, Reynolds said: “They are working through the details, so we are not at liberty to share those at this point. But the fact of the matter is that they are talking and working and the president has asked them to do something.”

In comments Monday at a White House cabinet meeting, President Donald Trump acknowledged that American farmers may be hurt by Chinese tariffs.

“But I tell you, our farmers are great patriots. These are great patriots. They understand that they’re doing this for the country. And we’ll make it up to them. And in the end, they’re going to be much stronger than they are right now,” Trump said.

Trump also said he wanted to remind people that the number of farmers has been “trending downward,” in some cases significantly.

At the Iowa Capitol, Reynolds and Iowa farm leaders said they wanted to underscore the seriousness of a possible trade war with China and short-term and long-term economic damage that could be caused by Chinese tariffs slapped on American farm products in response to Trump’s trade tariff’s on Chinese-made steel, aluminum and other goods.

“Trade is absolutely critical for a healthy Iowa economy,” Reynolds said. A total of $13.2 billion in Iowa goods were exported in 2017, and one in five Iowa jobs is dependent upon trade, she said. She also noted that one in three hogs raised in Iowa and one in three rows of corn and soybeans are exported.

Iowa’s governor said she understands that the Trump administration is working to unwind decades of bad trade policy, and she agreed that China has been a “bad actor” in stealing trade secrets and intellectual property. But the chance of damage to Iowa’s export markets comes at a difficult time for Iowa agriculture and the state’s economy, and it adds uncertainty as farmers prepare to plant their crops this spring, she commented.

“No one wins in a trade war and while some disruption may be necessary and is part of the negotiation process, we know that this absolutely can’t be done on the backs of the Iowa farmers,” Reynolds said. “It is important that we find a reasonable agreement and make sure that it is targeted and done in a timely manner, which will also help mitigate the risks of us losing market share.”

Rick and Grant Kimberley are cautious about the potential $150 billion in tariffs and their effects on the U.S. agriculture markets.

Grassley said help may be on the way for farmers

U.S. Sen. Chuck Grassley, R-Iowa, said in a conference call with national ag reporters on Tuesday that the Commodity Credit Corporation could play a role in helping farmers hurt by proposed Chinese tariffs on pork, soybeans, corn, beef and ethanol.

The Commodity Credit Corporation agency helps farmers through loans, product purchases, payments and other actions to stabilize, support and protect farm income and prices.

“The president has asked the secretary of agriculture to come up with a program and I’m going to wait and see” what Perdue proposes, Grassley said. Last week, Grassley called on the federal government to take responsibility for trade action that creates economic hardship for Americans and “mitigate the damage.”

Grassley also said the federal farm bill has price protections that kick in for corn, soybean, wheat and other grain producers, making up “for a catastrophic drop in prices.” But he said other protection “innovations” will be needed to protect fruit and nut farmers, who would be hurt as well from Chinese tariffs.

Iowa is an agricultural powerhouse, exporting products all over the world. That’s why many are concerned about a possible trade war with China.

Hog and soybean farmers worry but remain hopeful

Gregg Hora, a hog farmer from Fort Dodge who is president of the Iowa Pork Producers Association,said Iowa farmers are already seeing a decline in pork prices because of the trade dispute with China.

“We recognize that China and the United States are still in negotiations and it is important to know that it is too early to speculate on what long-term impacts that this may have on our pork producers and on rural Iowa. However, Iowa’s pig farmers remain hopeful that the issue will be resolved quickly,” Hora said.

Bill Shipley of Nodaway, president of the Iowa Soybean Association., expressed similar concerns. “To say that China matters to U.S. soybean farmers would be an understatement. They are our largest consumer of soybeans, ” he remarked.

Shipley said he would like to invite President Trump to visit his farm in southwest Iowa to observe soybeans being planted this spring and to learn what is involved in farm production.

“We have worked on this trade with the Chinese for 35 years. They were essentially not using any soybeans 35 years ago, now 40 percent of their soybeans are used from the United States and I would hate to see those relationships go by the wayside,” Shipley said.

Steve Sukup, chief financial officer of Sukup Manufacturing, which produces grain bins and grain dryers in Sheffield, said a trade war will hurt his family’s company, which has more than 600 employees. The business uses 1 million pounds of steel a week and it has already seen steel prices increase by 40 percent since November, he said.

“Our fear is that a trade war will put our employees’ jobs on the line. There hasn’t been a trade war that the U.S. has won. Farmers, manufacturers and Iowa workers have the most to lose,” said Sukup, a former state legislator.