There is an old American saying that farmers lose a bushel of corn a day if they don't plant the seeds after mid-May. For one thing, recent storms in the Midwest and Great Plains have slowed corn production to a record low. The bigger challenge is that the US government's recent escalation of the tariff threat has made it harder for most farmers to know what to grow.

A farmer moves a cover over a grain cart containing soybeans during a harvest in Wyanet, Illinois, US, on Sept. 18, 2018. (File photo: VCG)

A report released by the American Farm Bureau Federation said American farmers and ranchers are disappointed that tariffs were raised, and it means more lost market opportunities for American farmers.

What has happened to American farmers since the start of trade friction? How has US agriculture been affected? People’s Daily interviewed the affected farmers and related experts and scholars, listen to them calculate this "tariff account".

Soy sales to China fell by more than 90 per cent

US soybean sales to China have fallen by more than 90 per cent since the original tariffs went into effect in July 2018, according to the data. As of March 21, US soybean exports were down 31 per cent year-on-year. The USDA expects the total value of US agricultural exports to fall by $1.9 billion in fiscal 2019.

Wallace Tyner, a professor of agricultural economics at Purdue University, has been tracking the impact of tariffs on US farm produce since last year's China-US trade dispute. In an interview with the People’s Daily, he said that among American farmers, soybean growers are most affected by the tariffs, because China is the largest export market of American soybeans, and under the pressure of the tariffs, the export volume of American soybeans to China will drop sharply. In his research, in the standard trade elasticity and higher trade elasticity of two kinds of circumstances, the US soybean exports to China fall by 48% and 91%, respectively. In “the medium term, the United States may lose 69% of the Chinese market", Turner said. Geographically, all the corn belt states, including Iowa, Ohio, Indiana, Illinois, Minnesota and Nebraska, suffered the most.

In the past five years, by this time of year, farmers have almost completed 80 percent of their planting. This year, by contrast, American farmers had grown only 49% as of May 19, the lowest since 1980. Former USDA officials and economists have warned that the current decision to pay subsidies based on acreage could distort agricultural production decisions and increase crop stocks, particularly of soybeans.

Rob Shaffer, an Illinois soybean farmer and board member of the American Soybean Association, has been rotating corn and soybean crops year after year, planting soybeans much later this year. "Soybean farmers have been the first to suffer from trade frictions," he told the People’s Daily by phone.

A year ago, People’s Daily visited Shaffer 's farm in El Paso, Illinois. At the time, China had to add soybeans to its list of countervailing trade because of US tariffs on Chinese imports. Shaffer was worried but optimistic about the future. But now, he and his peers are losing patience and "pressure is building on bean farmers to bear the consequences of these tariffs for too long."

US soybean exports to China last year were described as a "complete collapse", according to a report in Forbes magazine. Recent data from the Chicago board of trade shows that soybean prices are at least 20 to 25 percent below pre-tariff levels. Prices keep falling and sales are falling. "Soybean growers do not want to be compromised in an endless tariff war because of depressed prices and the expectation that unsold stocks will double by the 2019 harvest." For soybean growers, that means losing a valuable market, stable prices and opportunities to support families and communities, said David Stephens, President of the American soybean association.

How many soybeans will be planted this year? Do you want to sell the stored soybeans at a low price? Soybean farmers face tough choices. What worries Shaffer more is that this is "a market that took 40 years to win".

Agricultural income --A 50% reduction in two years

"American farmers are facing one of the worst recessions in recent memory. Agricultural revenues have fallen by 50 per cent in just two years because of depressed markets, changing global conditions and a series of international trade disputes. Dr. John Newton, chief economist at the American Farm Bureau Federation.

In his view, farm bankruptcies are on the rise across the country as long-pending trade issues intensify, leaving many farms at the end of their teats and increasing numbers of farmers turning short-term debt into long-term debt.

A report released by the USDA in March showed that US agricultural debt had grown rapidly over the past five years, rising 30 per cent since 2013 to $409 billion. Farm incomes fell again in seven states in the Midwest and south central in the first quarter of 2019, according to a survey by the federal reserve banks of St. Louis and Kansas city. Many farmers are even under water.

According to the Los Angeles Times, "a trade war is wreaking havoc on the US farm economy." Farm prices are falling, farm bankruptcies are rising, US tariffs on steel and aluminum are making farm equipment more expensive, and export markets are disappearing. US farm income is expected to be $69.4 billion this year, down about 45% from its 2013 high, according to data. "Economists use the concept of economic welfare to describe changes in the economic welfare of a country or region, but because of high tariffs, the economic welfare of the United States is reduced by $2.2 billion to $2.9 billion every year." Professor Turner said.

Trade aid continues to disappoint farmers

Agriculture Secretary Sonny Perdue announced $16 billion in subsidies for farmers hurt by the trade war. Bloomberg previously reported that the US government could directly pay farmers $2 a bushel for soybeans, 63 cents a bushel for wheat and 4 cents a bushel for corn.

"Farmers want the market more,”  Shaver told the People’s Daily.  And some big farm groups say the subsidies are a stopgap measure that will do little to solve the underlying problem.

"While the subsidies will ease farmers' financial stress, they are not a long-term solution to the big problem of lost markets," the Illinois farm association said in a statement. That is why we must continue to focus on resolving trade disputes and forging new trade agreements with our global partners.

“Short-term, stair-stepped subsidies are a poor remedy for trade”, Lindsey Greiner, president of the Iowa soybean association, said in a statement. “They stimulate production but not sales, and therefore do little to undo the long-term logjam caused by not selling soybeans to destinations like China, the world’s number one customer.”

Washington argues that the extra revenue from higher tariffs on Chinese imports could be used to buy grains and other commodities from us growers affected by a trade war, which in turn could be shipped to poor countries. But the move met with widespread opposition and was seen as likely to cause more turmoil in world markets. “It's not like the government can just purchase the grain and ship it out tomorrow,” Darci Vetter who served the Obama administration's chief agricultural trade negotiator.