Bad Bob Loc: Virginia

https://www.yahoo.com/finance/news/brutal-map-shows-u-s-farmers-want-trump-end-trade-war-123443562.html

The ongoing battle over tariffs between President Trump and China is negatively affecting farmers across the US.

The conflict is expected to worsen as Trump instructed his aides on Friday to carry out his tariff plans of $200 billion in Chinese products. Even the cost of Hurricane Florence is made worse by the trade war.

“The trade war is having impacts on all agricultural sectors,” Gary Schnitkey, Professor in Farm Management at the University of Illinois, told Yahoo Finance in a phone interview.

According to a recent map, provided by the US Department of Agriculture’s Economic Research Service and highlighted by the farmdoc project at the University of Illinois, the net cash farm income has decreased in every American region in comparison to 2017.
The main agricultural commodities, Schnitkey explained, are soybeans and pork. To a second degree, there are corn, fruits, and vegetables.

“All of these commodity prices are linked together,” he said. “If soybean prices fall, so do corn and wheat.” Eventually, every kind of farmer experiences a major loss of income.
‘They’re coming out worse’

Each region specializes in its own crops. In the Basin and Range, one of the regions losing the most income, it’s beef and wheat. In the Heartland, soybean and corn prices are falling.

Blake Hurst, a corn and soybean farmer from Missouri, recently told Yahoo Finance that he’s already seen a 15-20% drop on the prices that he receives.

“The only answer is to make progress in negotiations with China since they are the biggest soybean consumers,” he said. “Not more government programs, but to make progress.”

The Northern Crescent mainly consists of dairy. However, Michigan grows lots of fruits and vegetables, while some of Minnesota and Wisconsin has “good corn and soybeans,” according to Schnitkey.
In the Northern Great Plains and the Prairie Gateway, wheat is the main crop, along with corn and soybeans. Schnitkey pointed out, though, that the region is “experiencing drier weather than normal and production issues.”

The crops in the Fruitful Rim consist mainly of fruits, especially citrus, and vegetables. Cotton, soybeans, and corn are in the Mississippi Portal. In the Southern Seaboard, crops such as cotton, peanuts, rice, soybeans, and beef are all being affected.

Hugh Weathers, South Carolina’s commissioner of agriculture, estimates that “the impact of tariffs on our markets to date is at $70 million.” It’s been causing a steady decrease in agricultural income.

Schnitkey describes the crops in the Eastern Uplands as “a mishmash of things.” There are primarily small farms in the region, which used to be big tobacco producers, but less so now. Beef is a big one. The region is among those being hit the hardest, with 30% less income compared to 2017.

With farmers in that region dealing with yields and being further away from markets, “their base is turning out worse, which is why they’re coming out worse,” he said.
China, the biggest soybean consumers, recently placed tariffs on soybeans (25%) and pork. President Trump promised $12 billion in aid to farmers hit by these retaliatory tariffs, and the first payment was distributed on Sept. 4. Soybean farmers were given the most in aid at $3.7 billion, followed by pork producers and cotton farmers.

The second round of aid is expected to be distributed in December, according to the US Department of Agriculture, although it is unclear how the funds will be distributed and how much.

In the meantime, China can get soybeans from other countries. “Brazil and Argentina can have 25% less than us and still beat our price because of the tariff. You’ll see more purchased from there than from us,” Schnitkey said.

So what’s the solution for American farmers?

“End the trade war,” Schnitkey said. “That’s what [farmers] are hoping for … that the tariffs come to an end.”

jack sequim wa Loc: Blanchard, Idaho

Bob,
Great topic to post, my favorite topics are economics in America

Let's not miss that Trump has been proactive in funding agricultural, and miss the big picture.

That's Americans short term weakness. We want things better, but to accomplish better outcomes for the long. -term sometimes means short-term pain and as soon as it begins to hurt the tiniest amount we scream bloody murder.

The surprising reasons why Trump’s trade wars will boost U.S. jobs — and stocks

Freer trade, deregulation, surging small-business, and other positives for U.S. growth

Luke Sharrett/Bloomberg
What if President Donald Trump’s trade war leads to less protectionism and more global prosperity? What if Trump’s deregulation of business unchains the animal spirits of businesses, especially smaller ones that arguably have been more stymied by regulations than large ones? What if jobs actually do come back to the U.S.?

What if the pace of technological innovation is increasing, disrupting business models in ways that keep a lid on inflation and finally boost productivity? What if the growth of distressed asset funds has created a shock absorber in the capital markets, reducing the severity of credit crunches? What if baby-boomers downsize while millennials remain minimalists?

I can go on, but we have enough to work with in this list of “what ifs.” So let’s explore the implications of these mostly bullish possibilities:

1. What if Trump’s trade war leads to less protectionism and more global prosperity? Before launching his economic wars, Trump bolstered the home front’s economy with deregulation and tax cuts. He figures that strength will allow the U.S. to win his wars without much, if any, pain at home. So far, the U.S. stock market seems to be siding with Trump’s approach. The message from the markets seems to be: “What if Trump wins his trade wars and if his sanctions work?” Investors are giving quite a bit of weight to the possibility that this all will lead to less protectionism and greater global prosperity. I agree with this prognosis.

Trump can just as quickly de-escalate as escalate his trade skirmishes with our major trading partners, depending on the progress made in negotiations. I’m convinced that our side is pushing for fairer trade with fewer trade barriers, not higher tariffs, which Trump is using as a tactical negotiating tool.

2. What if Trump’s deregulation unchains the animal spirits of businesses? It’s impossible to measure the impact of Trump’s deregulation of business on S&P 500 SPX, +0.03% earnings. The stock prices of small corporations have been outperforming the larger ones since Trump was elected in November 2016. Since then through last Friday, the S&P 600 SmallCaps stock price index is up 50.3%, outpacing the 34.4% return for the S&P 500 LargeCaps and the 34.5% gain for the S&P400 MidCaps (Fig. 1).

There might be another important reason why small-caps are doing so well: Small companies may be getting a bigger after-tax earnings boost from Trump’s tax cuts than larger corporations that have had the means to dodge taxes better (Fig. 2).

Perhaps Trump’s deregulation policies benefit smaller companies more than larger ones.
That still begs the question of why small companies’ revenues are so strong on a relative basis (Fig. 3). Perhaps Trump’s deregulation policies benefit smaller companies more than larger ones. After all, regulations are often promoted by large companies to keep small competitors at bay. The monthly survey conducted by the National Federation of Independent Business (NFIB) shows that significantly fewer small business owners have been reporting concern about government regulation and taxes since Trump was elected (Fig. 4 and Fig. 5).

No wonder the earnings component of the NFIB survey is the highest on record since the start of the data during 1974 (Fig. 6). This series is highly correlated with the NFIB “expecting to increase employment” series, which is also at a record high.

3. What if jobs do come back to the U.S.? Since November 2016, payroll employment is up 3.9 million, including 412,000 manufacturing jobs. The unemployment rate has dropped from 4.6% back then to 3.9% during July. Trump obviously relishes taking credit for all this. It has long been my view that Washington doesn’t create jobs; companies do — especially small ones. Washington’s policies can make it easier or harder for companies to hire. Trump’s policies are certainly helping.

In any event, the ADP payroll employment

Finish reading using link
http://www.marketwatch.com/story/the-surprising-reasons-why-trumps-trade-wars-will-boost-us-jobs-and-stocks-2018-09-04

Bob, do you see areas of strength in tariffs being balanced? Granted we have not arrived but the odds are that Trump will improve America's overall economy were tariffs apply.

Take care

Bad Bob Loc: Virginia

We will see, most people don't think in "long term".

Idaho

4. What if trade wars lead to long term reduction in soya bean production, reduction in use of the plow that leaves soils exposed over winter to erosion, reduction in use of artificial fertilisers and pesticides? That could slow the loss of topsoil and enable humid content to go up. It could slow or reverse the formation of dead zones in the Gulf of Mexico and lead to the recovery of fisheries plus increased biodiversity.

5. What if large scale industrial agriculture just became non-commercial and GMOs found no market in other countries and the US market also rejected GMOs? Then biodiversity could restore natural pest control and eliminate the need for artificial pesticides and herbicides?

That could mean healthier food for American households and reduction in disease and obesity. Long term wins al around.

moldyoldy

Congress has abdicated all responsibility for handling trade treaties. They just threw in the towel.

old marine Loc: America home of the brave

Over production usually is the cause of prices dropping. The more availability allows the buyers to lower the price they will pay for a product. If there is a shortage of the product prices go higher according to demand for the product.

Export and import tariff is paid by the buyer, not the seller.

old marine Loc: America home of the brave

Congress is smart. The previous 8 years Congress listened to a man(?) Who had never ran even a front yard lemonade stand before and look what it did to our buisness and the economy.

Now we have a businessman that took a few million dollars and turned it into a few BILLION dollar. Now he is doing the same to the American economy and the Socialist Democrats are soiling their diapers.

I always listen to my financial advisors and in 20 months my bottom line profit is greater than the 8 years of the Obama administration years.

It doesn't take a rocket scientist to know who is best for America. Now if the Socialist Democrats could learn that, then America would be great for everyone.
🤔🤗😉😎

moldyoldy

He inherited a real estate business that he would have destroyed without laundered Russian mob money.

Richard Rowland

I think this trade war will depend on how high the degree of hunger the Chinese government is willing to put their people through. China needs every bushel of grain it can get its hands on. Right now we're in the early stages of this game.

China indicates it will go somewhere else. Bull S**t, the logic being used is that China is the only market. If China is the only market and American agriculture has been filling that need, then where do the agriculture products produced by other nations end up? That production goes somewhere!

And, if a nation decides to supply China rather than to where it had been exporting...... Well, I think it's logical to conclude there are markets, other than China.

One could argue that much of the production is used in the producing nations, so if that's the case, then it isn't available for export. The food resources needed to feed the world are increasing, and the acres of production hasn't increased unless more rainforest is being destroyed.

To put a bit of perspective on this argument. Depending on how accurate the report, I recall reading that if China wanted to provide two eggs for every Chinese breakfast, it would take the whole of Australia's grain production to feed the chickens required to produce the number of eggs needed.

4430 Loc: Little Egypt ** Southern Illinory

I've been away due to corn harvest but I take Sundays off so I see BB is gleefully post this info about farmers getting hurt by trade war with China !

I've been a grain and livestock farmer for the better part of my life and I've seen markets go south and north and also >>> east and west meaning sideways <<<< all the farmers I've talked to says the main reason for our price declines is the fact that we've had 5 yrs bumper crops back to back and yes the trade issues with China are having an effect on prices as well !

However many if you folks think farmers are a bunch of uneducated brain dead hillbillies which in fact are totally wrong !

Many farmers I talk with are willing to go alone with the trade issues placed on our soybeans as we all know that the humongous trade deficits isn't sustainable by any means !

The rest of the world can only supply a portion of China's needs and thus when the supply of other nations is depleted those countries will be forced to buy US beans !

SO BB I h**e to rain on you gleeful Trump hating mood ! Just Saying

moldyoldy

I still think its a lose. lose situation, as we impose tariffs, it means that we pay more for anything from another country, and many US companies are now off shore. There is no easy solution. Trump does not think past the surface of the problem.

Idaho

Those offshore companies will re-onshore.

That’s part of the point of it all!

moldyoldy

Harley, was forced to build off shore because of tariffs.

Lonewolf

The real scary thing for farmers is if these countries find alternate sources for these crops what's make you think they would go back to buying from US farmers if tariffs were lifted!

jack sequim wa Loc: Blanchard, Idaho

There's a devil among us that would never allow #5. And is more powerful than congress... Monsanto