Trade Fight Threatens The Linkster & Iowa Farmers: Video

Ted

FYI: ( I don't like it, but I will bite the bullet. I own a 1,200 acre farm raising corn and soybeans west of Dubuque, Ia.)

Many farmers, who depend on shipments overseas for one-fifth of the goods they produce, say they are anxious.

The U.S. Farm Belt helped deliver Donald Trump to the White House, drawn to his promises to revive rural America and deregulate industry. Now, the president’s global trade offensive is threatening the livelihoods of many farmers.
Regards,
Ted

Derf

@Ted: Didn't you have corn & bean crop already sold ? Contracted out ?
Derf

msf

For those who prefer the written word, here's the Des Moines Register story from the reporter being interviewed. The YouTube video was published June 18th, the article discussed in the video was published June 15th, and updated late on June 18th.

https://www.desmoinesregister.com/story/money/agriculture/2018/06/15/china-tariffs-soybeans-could-cost-iowa-farmers-up-624-million/705121002/

It includes this curious item (also mentioned in the video toward the end):

Secretary Sonny Perdue said Friday the U.S. Department of Agriculture is assessing the tariffs' impact on farmers, given "the president’s promise not to make farmers bear the brunt of these trade disruptions."

The article seems to be focused on the macro level, e.g. how much revenue will the entire state lose? It would be interesting if @Ted could add a bit of personal perspective beyond a willingness to bite the bullet.

Here are some thoughts from three months ago of one Iowa farmer (who supported Trump's election):
http://thehill.com/opinion/energy-environment/381652-impact-of-chinese-trade-war-what-american-farmers-produce-is

Here on my farm in Iowa, I’m on the front line. The dispute ... poses a direct threat to my livelihood. Because of the new and emerging tariffs on both sides, the things I grow will sell for less and the things I buy will cost me more.

This week the price of hogs dropped $12 for every pig I sell. This morning, soybeans are down 40 cents a bushel .... And if I want to make new capital purchases of machinery or grain bins — anything made with steel or aluminum — I’ll have to pay a higher amount.

China also slapped a 25-percent tax on pork products — a category that affects me directly because I raise hogs. ... It added tariffs to more than 100 U.S. products, including cars and planes. This round affects me, too. If the Chinese impose the announced tariff of 25 percent on soybeans, another major product on my farm, it will lower my price $2.50 a bushel.

My hope is that the president will make good on the promise that he’s a master negotiator. Perhaps he’ll bargain his way out this mess. ... For a while, I was optimistic about the future of farming. ... Now, I’m worried.

davidrmoran

>> his promises to revive rural America and deregulate industry

>> will make good on the promise that he’s a master negotiator. Perhaps he’ll bargain his way out this mess.

Right. You knew he was a snake when you took him in.

Or shoulda.

He has always been a serious loser, his entire career.

Ah, here, including from the business press, including years ago:

https://www.bloomberg.com/view/articles/2018-06-07/donald-trump-the-lose-lose-negotiator

http://fortune.com/2016/07/19/donald-trump-negotiating-the-art-of-the-deal/

https://www.politico.com/magazine/story/2018/06/01/donald-trump-deals-negotiation-art-of-deal-218584
that one was genuinely funny

https://www.vanityfair.com/news/2018/06/donald-trump-has-always-been-a-terrible-negotiator

overseas view:
https://www.theguardian.com/commentisfree/2018/jun/08/trump-master-negotiator-meeting-kim-jong-un-art-of-deal

He is a sign-on-back mark and a chump, and we all are his marks, and chumps.

davidrmoran

and

http://nymag.com/daily/intelligencer/2018/07/trump-trade-war-with-china-big-problem-for-iowa-republicans.html

Crash

I marvel at the number (though we all know it was still a minority of the popular vote) who say they voted for the Trumpster because they were tired of the same-old-same-old and they wanted to shake-up Washington. Just listen to that dangerous, burger chewer and ice cream slurper, this anti-learning, filthy-rich dolt. It is incomprehensible that anyone with half a brain could not see right through the Trumpster's bluster, his childish tirades. The claim is also made that a bunch of Independents went the way of the Trumpster after the Demublicans (sic) went out of their way to make sure that Bernie did not get the nomination. ("Super delegates" is absurd.) ... Sanders and Trump stand for policies quite at odds with each other--- that is, if the Trumpster could even be credited with the necessary THINKING and LEARNING involved in putting together a policy. If Sanders supporters turned around and voted for the Trumpster, they were transparently throwing out the political priorities they once purportedly stood for. It's damn difficult to see how the Trumpster could look attractive to disenchanted Demublicans after Sanders got sabotaged from within. But most important, that Electoral College simply must GO. Pre-Civil War federalism is DEAD. Garrison Keillor made the observation that about 80,000 voters spread across just 4 "heartland" States ultimately pushed the Trumpster over the line. Think about THAT.

VintageFreak

Ted said:

FYI: ( I don't like it, but I will bite the bullet. I own a 1,200 acre farm raising corn and soybeans west of Dubuque, Ia.)

You are saying you are taking one for the Trumpers? You have accepted that sacrificing your firm was justified to get Trump elected? At the very least, that's some conviction!

davidrmoran

called betting the farm ....

https://www.nbcnews.com/business/economy/betting-farm-why-heartland-still-believes-trump-despite-plunging-prices-n886941

"We're getting tariffed to death," said Scott Ditter, a dairy farmer in Sheboygan Falls, Wisconsin, referring to Canada's 270 percent duty on American milk. America's dairy farmers have suffered a monthslong dip in dairy prices due to oversupply. They could export more to Canada, but would be hit with a triple-digit tariff above certain annual quotas. Now that Trump has slapped Ottawa with a 25 percent tariff on steel and 10 percent on aluminum, "the shoe is on the other foot," Ditter said. "I think it's fair. It's smart business," Ditter said. "There's going to be a little pain and suffering."

Pain for gain is an idea that farmers are well accustomed to, and they trust in Trump's business acumen to see them through. "Even though it might be bad medicine, I think if the president is telling the truth, he's got a lot of experience with negotiation. He wrote a book on it," said Kelly Rudd, an independent cranberry grower in Tomah, Wisconsin.

Crash

LOL. Trust Donald Trump. Run away and be very afraid.

msf

"he's got a lot of experience with negotiation. He wrote a book ..."

Now I understand the problem. Article confusion. He wrote a book, he didn't write the book on negotiating.

Actually a ghostwriter wrote a book. Details, details.
http://thehill.com/homenews/administration/395550-trumps-co-writer-rips-his-book-trump-is-incapable-of-reading-a-book

davidrmoran

yeah

now, today, perception is, for many, literally reality

bartab

And when they learn the truth, they walkaway.

Crash

+1. True.

davidrmoran

dunno

we will learn some demographic and political-cultural things this fall and then the next few years

but those governing crises will all pale in comparison with the summer temps then

beach condos along northern siberia, toronto and glasgow worse than socal, etc etc etc

try and imagine what summertime will be like in 5 or 10 much less 20 years

Derf

"We're getting tariffed to death," said Scott Ditter, a dairy farmer in Sheboygan Falls, Wisconsin, referring to Canada's 270 percent duty on American milk. America's dairy farmers have suffered a monthslong dip in dairy prices due to oversupply.

I happen to stop at cheese factory on Friday @ purchased 4 different kinds. I don't recall paying less per pound than the trip before. So while the farmer is receiving less per hundred weight the cheese producers aren't passing this reduction along to the consumer !
Don't cut the cheese, Derf

davidrmoran

you were buying extant and already bought inventory?

Derf

@davidrmoran: You do have a point there, especially with the aged cheddar. Just like going to the gas station ?
Derf

davidrmoran

I guess, but their turnover is pretty high generally, I am told

just assumed merchant pricing is largely governed by sunk costs

not being a businessman of that type, not sure

not to say savings will be passed along in any case

Derf

@davidrmoran: As for gas. When oil prices rise, Ii seems to me the price of gas goes up before the next tanker pulls in.
"not to say savings will be passed along in any case" In the case of the cheese, I'm thinking last time milk dropped the price of retail cheese didn't follow !
Time to hit the pillow,derf

davidrmoran

https://www.nytimes.com/2018/07/09/opinion/trump-tariffs-tofu.html

AndyJ

On the subject of tariffs the U.S. has implemented, here's a Bespoke piece on the effect on washing machine import volume and prices since that tariff went into place. Note the spike in price: +17.7% in the past two months.

Haven't seen any details on the solar panel tariffs that were implemented at the same time. The installer I know said that (like with washing machines, per the article) a lot of people in the business and their suppliers saw it coming and were able to buy pre-tariff and stockpile enough for a few months and keep costs down ... temporarily.

As the article says, "As new tariffs continue to take effect, remember that they're a tax hike ...."

Derf

Note the spike in price: +17.7% in the past two months. Price gougers !! & they had a stock- pile ??
Derf

AndyJ

@ Derf, the timing didn't seem clear to me in the article. I thought it might be that 2m ago was more or less when the pre-tariff stock was dwindling or gone, so anything bought after that would have a tariff cost in it. I just re-read that part of it, and it seems like that's what the author means, although not all that clearly.

hank

Will be interesting to see whether / how much these trumped-up trade wars affect new car (oops - new truck) prices as the U.S. makers roll out the ‘19 models. My read is that inflation (based on the govt. numbers) is running in the 2-2.5% zone. Will automakers tow that line or will the hikes be higher due to increased costs for steel, aluminum and other raw materials?

Re the farm issue - Those gargantuan tractors, combines, semi-trucks and other assorted equiptment are made mostly of steel. So the cost of farming should go up. Perhaps @Ted would like to weigh in on what kind of money we’re talking about here to buy equipment to run a 1200 acre farm. Stuff runs more than your family auto it’s safe to guess.