This is Bob Bragg with the Farm News & Views Report for the Week of March 10th.
As farmers and ranchers were heading into this year’s planting season many were optimistic about the outlook for the farm economy. The February Purdue University/CME Group Ag Economy Barometer found that Farmer sentiment had improved almost 40% above last year, with producers remaining optimistic, because of strengthening crop prices, positive returns in the livestock sector and expectations for receipt of disaster payments from USDA. But now they’re facing a sea of uncertainties, which was reflected by bankers in the recent Creighton University Rural Mainstreet Index survey of Bank CEOs in a 10-state region of the central U.S. The Survey found that economic growth has slowed, farmland prices have fallen, while farm equipment sales have dropped for the 18th straight month, and only 9% of bankers expect positive outcomes for Rural Mainstreet due to President Trump's tariff actions.
Zippy Duvall, president of the American Farm Bureau Federation, recently warned that “For the third straight year, farmers are losing money on almost every major crop they planted. Now, Canada and China are targeting U.S. farm products, including wheat and poultry with retaliatory levies, while farm groups contend that U.S. tariffs on fertilizer imports from Canada will likely raise production costs. According to industry data, about 85% of U.S. imports of potash fertilizer come from Canada. Corey Rosenbusch, chief executive officer of The Fertilizer Institute trade group points out, That short supplies of fertilizer going into spring planting season can have a huge impact on farmers, and fertilizer prices can ultimately impact the cost of food. Canada supplies 85% of our potash imports, an irreplaceable component of modern agricultural production, which supplies potassium that ensures optimal plant growth. The US has historically sourced nearly all of the potash used by farmers from international markets, and the largest deposit of potash in the world is found in the Canadian province of Saskatchewan, so it makes sense to import this necessary nutrient from Canada.
Some farm groups are unhappy with Trump's rhetoric. American Soybean Association President Caleb Ragland, a farmer from Magnolia, Kentucky, said, "Farmers are frustrated," pointing out comments on President Donald Trump's Truth Social, stating that farmers should plan to sell their crops inside the United States, where demand doesn’t meet the supply of corn and soybeans that farmers grow, while then telling them to "have fun" as he puts tariffs on imports. "Tariffs are not something to take lightly and 'have fun' with." Ragland also pointed out that "Not only do they hit our family businesses squarely in the wallet, but they rock a core tenet on which our trading relationships are built, and that is reliability. Being able to reliably supply a quality product to them consistently."
But farmers who produce a variety of products that are exported from the U.S. are also concerned about tariffs, since exports are critical to dairy farmers who export at least a portion of their production. Gregg Doud, President and CEO, National Milk Producers Federation points out that “Mexico and Canada are valuable trading partners that American agriculture depends upon, and trade with those countries is critical to the well-being of dairy farmers.” But he is hopeful that there can be a quick resolution to these tariffs, so that dairy farmers can work on supplying products to the European Union.
Last week, when responding to the high cost of eggs, Secretary of Agriculture Brooke Rollins suggested that everyone should keep chickens in their backyards, which might not be a workable solution since some people live in apartments or houses with no back yards. Also, for those who have no idea about how to care for chickens, but want some, they should talk to their local agricultural extension office for information on proper husbandry. They can find out about proper care, and feeding for the different stages of growth, from baby chicks to pullets to laying hens. Chickens in all stages of their lives need housing for protection from weather and predators of all sorts. A chicken coop can be built or small coops can be purchased for starting around $300. But once the flock is started, they are similar to pets that need daily care. While chickens can be fun to have, they require a commitment to care for them. Even with the high cost of eggs, having a small flock of laying hens probably will be nothing more than a breakeven hobby, but a great learning experience.
Donald Trump often touts William McKinley's tariff policies, which were rolled out when McKinley was a congressman in 1890, not when he was president. But these policies are reported to have had negative far-reaching impacts on the economy, and ultimately became widely unpopular among voters, leading to McKinley and other Republican congressmen who supported the tariffs losing their seats in the 1890 midterm election. By the time McKinley became president in 1897, he had changed his mind about foreign trade."This was protectionist at its height," William K. Bolt, professor of history at Francis Marion University points out, "And there was a significant political backlash against it."
Even during McKinley's day there was debate over whether tariffs were a good thing. The website taxfoundation.org cited a New York Times article published on Oct. 21, 1890. "Up Go The Prices Now; How The McKinley Tariff Taxes The Necessaries Of Life," said a headline over the article. "Merchants Are Marking Up Almost Everything That Men Wear, Eat, Or Keep House With."But just before his death in “He saw we had a whole lot of excess capacity in manufacturing, and (thought) ‘Why don’t we use that capacity to send our products to the rest of the world?’ So he shifted from protectionism to thinking about reciprocity and opening up foreign markets,” noted Irwin. “He gave a famous speech laying this out in September 1901. But he was shot the next day and died several days after that. So we’ll never really know what would have happened had he lived and tried to push that through.”
However, McKinnley stated prior to his death, “ As history has repeatedly proven, one trade tariff begets another, then another- until you've got a full-blown trade war.
