Farmers caught between a flood and a trade-war hard place

Standing a few feet from a pool of water in his field, on a strip of now-crusted mud where no corn plants are shooting up, Scott VanderWal contemplates a question: Which makes farming more uncertain these days: the weather or White House policy?

“That’s a hard question,” says Mr. VanderWal, a farmer and president of the South Dakota Farm Bureau, an advocacy group. “I would say they are both about the same.”

Hit with wet weather that has delayed spring planting on a scale not seen in decades, many farmers from here in Volga, South Dakota, to Ohio are making the difficult decision not to plant certain fields this year – to settle for insurance payments worth about half what they would normally receive per acre, rather than plant and risk an early frost.

At the same time, federal policy added a new layer of uncertainty and even alarm among agricultural producers. Slowly, these issues are being resolved – from disaster aid to trade talks – but not before exposing waning patience among many in farm country with the administration’s unpredictability.

“Farmers are grumpy,” says Norman Brugger, a rancher and seed salesman in Albion, Nebraska. “I have listened to people talk, coffee-shop talk ... and I have heard some guys who are changing their minds” about President Donald Trump.

Part of rural dissatisfaction stems from the difficult spring. Normally, this time of year, Corn Belt states like Indiana and Ohio would have all but finished corn planting. Instead, they’ve got two-thirds or less planted, according to the crop progress report the U.S. Department of Agriculture released Monday. South Dakota is in the same boat – 64% planted – but because the risk of frost comes a little earlier here, the window is closing fast.

The silver lining is that, in the quirky economics of agriculture, a poor corn crop could be good for farmers. Already, corn prices have surged to three-year highs. Farm income is likely to rise this year, after several years of decline, says Scott Gerlt, an agricultural economist with the Food and Agricultural Policy Research Institute at the University of Missouri. Even farmers with poor yields may do better, because crop insurance provides payments for those who don’t plant at all as well as those who have a reduced yield.

How well they fare will depend in part on a long-delayed $19.1 billion disaster aid package that the president signed Thursday, after trying for months to limit how much would flow to Puerto Rico for recovery from Hurricane Maria. The measure, which includes $3 billion in aid for agriculture, should be of special help to Georgia and Florida farmers who have waited since last October to find out if federal aid would help ease their severe losses from Hurricane Michael. But economists say the money is too little to provide much help for Midwestern farmers who can’t plant. The regulations for distributing the money still haven’t been written.

Farmers breathed another sigh of relief Friday after Mr. Trump announced an immigration deal with Mexico, forestalling his threat of imposing 5% tariffs on imports from America’s largest trading partner. The tariffs would have hit the auto industry hardest, but also would have raised consumer prices on a range of goods from Mexico, including fruits and vegetables.

Farmers also feared U.S. tariffs would trigger Mexican retaliation on imports from the United States. Mexico is the second-biggest export market for U.S. agricultural goods after Canada. But other trade actions are still raising concerns in farm country.

For example, Mr. Trump’s aggressive negotiations with China, which include tariffs on Chinese goods and countertariffs from China, have hurt soybean exports and swelled U.S. stockpiles, which have caused prices to fall. In the short term, most of those soybeans will get sold to other nations if the Chinese market disappears. But the longer the U.S.-China standoff continues, the more other nations will expand production and displace U.S. sales around the world. 

By standing firm against unfair Chinese trade practices, Mr. Trump has gotten a pass from many farmers, says Mr. VanderWal, who is also vice president of the American Farm Bureau Federation, a conservative farm advocacy group in Washington with strong lines of communication with the administration. “They understand what he’s trying to do. ... Farmers are the best patriots in the country. But there comes a time when we all have to keep our businesses and farm operations together. ... Farmers are getting impatient.”

If the China trade impasse gets grudging acceptance, the president’s sudden shifts on Mexico have not. The U.S. and Mexico had been moving toward ratifying a new North American trade pact, the United States-Mexico-Canada Agreement (USMCA), when Mr. Trump suddenly tweeted late last month that he would impose 5% tariffs on Mexican imports – which would eventually rise to 25% – if its government didn’t strengthen border security against migrants making their way to the U.S. Then on Friday Mr. Trump tweeted that the two nations had signed a last-minute deal to avert the tariffs, which he had threatened to impose on Monday.

Subsequent reporting from The New York Times suggests that much of the deal had already been reached in secret negotiations earlier this year, while the administration contends that stronger provisions and an important and unnamed new provision were not reached until the threat of levies had been imposed. He also tweeted Sunday that if there is not cooperation on the border from Mexico “we can always go back to our previous, very profitable, position of Tariffs.”

It is this uncertainty – which the president appears to thrive on – that exposes growing concern over some of the president’s tactics. This does not signal a political break with Mr. Trump. Many rural Republicans applaud his whatever-it-takes approach to handling problems, including immigration.

When a country like Mexico isn’t budging on an issue, “we need to get their attention,” says Verlin Janssen, a city councilman for Gothenburg, Nebraska, and a retired businessman.

Others quietly chafe at the uncertainty created by Mr. Trump’s negotiating style. Threatening Mexico with tariffs was “not helpful,” says Mr. VanderWal. “Get USMCA passed. It would give the Trump administration more credibility when negotiating with other countries.”