President Donald Trump said he's prepared to deliver more aid to farmers hurt by the trade war with China, but concerns are growing that the U.S. agriculture industry could suffer a long-term loss of market share as other countries rush in to fill Chinese orders.
The nation's leading farm group on Monday, Aug. 5, called China's decision to halt imports of U.S. agricultural products "a body blow" to the nation's farmers, a crucial constituency for Trump.
The president responded with assurances of continued assistance to farmers in a tweet Tuesday morning, suggesting he would add to the $28 billion in trade aid he has approved for farmers over the past two years.
"As they have learned in the last two years, our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do," Trump said in a tweet. "And I'll do it again next year if necessary!"
Trump so far has maintained support among the rural voters who overwhelmingly backed his 2016 election with federal assistance partially making up for farmers' losses from tariff dispute. But farmers and their lobbyists in Washington increasingly respond with demands for "trade not aid" as shifts in global trading patterns harden.
As they have learned in the last two years, our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do - And I’ll do it again next year if necessary!— Donald J. Trump (@realDonaldTrump) August 6, 2019
Brazil and Argentina are capturing larger shares of soybean sales to China, the largest export market for the oilseed. Total U.S. soybean exports in the 2018-2019 growing season dropped to 46.3 million metric tons from 58.1 million the prior year. At the same time, Brazil and Argentina's combined soybean exports rose to 86 million metric tons from 78.3 million prior the year, according to the U.S Department of Agriculture.
Farmers in Brazil are also investing to convert more land to soybean production to satisfy Chinese demand, raising the country's long-term capacity to grow crops. Fertilizer Giant Yara International forecasts that Brazil's soybean planted area will rise 2.5% this year as farmers shift pasture land and sugar-cane areas to the crop.
The chairman of the trading arm of China's top food company told an industry event in Sao Paulo on Monday that his company expects to increase soybean purchases from Brazil by 5% a year for the next five years. Johnny Chi, chairman of Cofco International, also said his company plans to boost investments on logistical supports in Brazil.
Archer-Daniels-Midland CEO Juan Luciano said on a Thursday conference call with analysts that the damage to U.S. agriculture grows the longer the tariff dispute continues, though he doesn't think it has yet done irreparable harm.
"People find alternatives, and eventually they become a little bit more comfortable with those alternatives," Luciano said. "So this is not good for the U.S. farmers."
Zippy Duvall, president of the the American Farm Bureau Federation, the nation's largest and most influential general farm organization, said Monday that U.S. farmers are "grateful" for the money the Trump administration has given them so far, but "we know that aid cannot last forever."
He said China's import cut-off was "a body blow to thousands of farmers and ranchers who are already struggling to get by."
Roger Johnson, president of the National Farmers Union, the nation's second-largest general farm group, said Trump's "strategy of constant escalation and antagonism" has "just made things worse." America's family farmers and ranchers "can't withstand this kind of pressure much longer."
Duvall said the tariff war is worsening the plight of a farm sector already reeling from low commodity prices and bad weather. U.S farm exports to China had already fallen $1.3 billion during the first half of the year, he said.
"Now, we stand to lose all of what was a $9.1 billion market in 2018, which was down sharply from the $19.5 billion farmers exported to China in 2017," Duvall said.
Last year, the administration announced $12 billion in aid to farmers hurt by the spat. Trump followed that up with another $16 billion in trade assistance this year.
Before Trump's tweet, U.S. Agriculture Secretary Sonny Perdue had warned farmers not to count on more trade aid. Agriculture Department spokeswomen didn't immediately respond to requests for comment on Trump's tweet.
Trump won overwhelming backing from rural voters in 2016, and their continued enthusiastic support is crucial to his re-election bid. In June, 54% of rural voters approved of Trump's job performance compared with a national approval rating of 42%, according to a Gallup survey of 701 self-identified rural voters.
Farmers optimism rebounded in July, after the latest tranche of trade aid was announced and before the escalation in the trade war. The Purdue University/CME Group's agricultural sentiment index increased to 153 points in July from 126 in June, according to a survey of 400 agricultural producers.
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This is article was written by Mike Dorning and Mario Parker, reporters for The Washington Post.
With assistance from Bloomberg's Michael Hirtzer and Dominic Carey.