Family farmers escalating trade problems
August 7, 2018
The Trump Administration's escalating tariff trade negotiation is now a real reality for family farmers and ranchers, as net farm income has declined to a new twelve year low coupled with current net farm income declining by fifty two percent in just four years. Just about every commodity produced by those in production agriculture is subjected by law under the guaranteed supervision of the USDA to a mandatory checkoff tax.
It was these commodity groups that petitioned congress to open new markets for the organizational right to collect checkoff dollars but neglected to include a collective formula for a cost of production plus a reasonable profit for agricultural producers.
Now, these commodity groups are rightfully begging Trump to back off on his personal trade war vendetta. A Trump, 12-billion-dollar rural vote base buying taxpayer funded bailout is just a bandage that is taken from the 1950s Ezra Taft Bensen, Secretary of Agriculture's, playbook, under the Presidency of Dwight D. Eisonhower.
The era of the 1950s was known as surplus marketing begging only tool for producers following the world needs for grain following the WWII profitability marketing of products. Conservative producers seem to forget their policy platform get "government out of agriculture."
As the Commodity Credit Corporation came to the forefront with loans for the building of on farm storage, area bin sites and warehouse storage. The government's obligation to pay an annual fee to have each bushel of grain stored for years. This so-called "surplus" commodities were the demise of any real marketing plan for this time. Now, this old playbook has been found, as a new selling point to entice producers to follow again. First, this country has so much production that is still left in storage from years past. Second, with a more than bountiful crop on the horizon for 2018 and world markets curtailed because of imposed tariffs a likely chance that producers are again setting themselves up for seven years of low commodity prices because of backed up for any past, normal selling of grain, that is going to be held, as lenders tell buyers this price will not meet you loan obligation, as current requests for restructuring of producer debt have already doubled.
If this Trump Administration thinks that every country in the world is going to buy from the US, think again. The outside world is not that dumb as they remain silent with educated monitoring. These other agricultural producing countries can and are with better and more education, technology and equipment will make the US look like a "banana republic."