While headlines have gone into hiding on President Donald Trump’s disastrous tariff policy, farmers are losing money and filing for bankruptcy at alarming rates.
Minnesota median farm income hit its lowest level in 23 years in 2018 at $26,000, down 8% from last year, according to a study by the University of Minnesota and Minnesota State. It gets worse. Farmers in the lowest 20% of income lost an average of $72,000.
Since Trump imposed tariffs on Chinese imports and the Chinese retaliated with 25 percent tariffs on imports of U.S. soybeans, prices have been down by 15% to 20%. Soybean exports to China are off by about 50 percent.
Before tariffs, the U.S. supplied China with 40 percent of its soybeans, but Chinese buyers are turning to South American suppliers Brazil and Argentina.
While the Trump administration and China are negotiating on trade issues, ag economists and farmers alike say farmers are not likely to get all of China’s business back now that the country has found other suppliers.
In other words, Trump's tariff policy has delivered a permanent blow to U.S. soybean exports and a permanent blow to farmers’ income.
Some 20 farms filed for bankruptcy in Minnesota in 2018, nearly double the number of 2017, according to the Federal Reserve Bank. While overall bankruptcy numbers may not seem high, the growing rate of bankruptcies is a concern to bankers who see more ahead.
And the retaliatory tariffs come at the worst time. Crop prices are down, input costs are up and interest rates are on the rise. At a forum Friday in St. Peter, farmers told of paying health care costs of $40,000 a year out of pocket.
We’re likely to lose more farmers.
Minnesota Soybean Association President Mike Petefish told Minnesota Public Radio that the current environment has caused him to consider getting out of farming. The family must rely solely on his wife’s off-farm income and he notes how working as a farmer for 2,000 or 3,000 hours a year without much to show is “frustrating and stressful.”
Mankato’s economy will also feel the impact. Recently declining retail trade growth in the last couple of years is likely directly linked to the three to four year depletion of farm prices and farm income.
The Trump tariff policy was a bad idea that has gotten worse. We urge Republican Congressman Jim Hagedorn, who represents the major farm country of the 1st Congressional District, to start standing up for farmers in his district and call for an end to the tariff policy that is crippling the farm economy.