With lower prices for virtually everything we produce on Nebraska’s farms and ranches, the last thing we need are policies that drive prices down even more. Unfortunately, few things create more uncertainty and downward price pressure than a trade war. Each day U.S. trade negotiations fail to advance, and as more retaliatory tariffs are placed on agriculture commodities, the more vulnerable the financial picture becomes for our farm and ranch families.
Unrest in our trade relations is impacting Nebraska. June and July have been brutal to Nebraska farmers, with cash corn prices down roughly 14 percent and cash soybean prices down 20 percent between June 1 and July 12. The prices livestock farmers receive for pork are also lower than they were a year ago. While there are many factors in markets, trade tensions are leading contributors to this downward price push. From a big picture perspective, the value of exports equals roughly 30 percent of Nebraska farm cash receipts. In other words, trade is of vital importance to the future of agriculture, I am not just talking about farmers and ranchers. A downturn in the agricultural economy also affects agriculture related, and main street businesses in communities across the state. In Nebraska, that is one out of every four jobs.
It’s also critical to note that trade relations aren’t just a short-term issue. Misfires in trade policy can have long-term impacts. There are plenty of competitors in the global market looking to displace American agriculture and lost markets aren’t easy to recover. It can take years to do so; if it can be done at all.
Negotiation, not tariffs, provide the best path toward solving trade issues, particularly as it relates to our allies to the north and south, as well as with our partners in the Pacific Rim such as Japan. Clearly, issues with China must be addressed, yet it’s crucial the president not forget China is the largest customer for U.S. soybeans and the third largest trading partner for Nebraska agriculture commodities and goods.
Some in the administration, including White House Trade Advisor Peter Navarro, who recently described the products already targeted by China as amounting to only “a rounding error,” must remember that ultimately trade wars affect people. And for farmers and ranchers, it affects families who have devoted generations to growing and sustaining their family operations, only to see their economic vitality suffer because of the administration’s trade policy.
Every signal is that the president is committed to his course of action on tariffs, despite concerns from agriculture. If that’s the case, we need positive action from the administration to lock in sound trade deals with our neighbors in Canada and Mexico, as well as Japan, and the other Trans-Pacific Partnership (TPP) countries. The president’s promise in pulling out of TPP was that we would get bilateral deals done with these potential customers. That hasn’t happened. Agriculture needs access to these markets. To quote a famous Nebraskan, it’s time to “Git R Done” with those partners!