Aug 02, 2018 - 2:30pm

‘We’re to the Breaking Point:’ New Tariffs Sow Seeds of Fear Across America’s Heartland


Executive Director, Strategic Communications

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A worker stacks a straw bale at a recently harvested wheat field in the village of Kirkland in Dekalb, Illinois
A worker stacks a straw bale at a recently harvested wheat field in the village of Kirkland in Dekalb, Illinois
A worker stacks a straw bale at a recently harvested wheat field in the village of Kirkland in Dekalb, Illinois

Glen and Patti Hutchinson have been farming the same stretch of fields in Murfeesboro, TN, about 30 miles southeast of Nashville, for three decades. Their son, Will, inherited the agricultural genes and has worked alongside his parents on the farm since he was a child, helping grow soybeans, corn and wheat for sale across the country and around the world. This season, the Hutchinsons have planted about 70 acres of soybeans, among other crops. 

That may come back to haunt them.

Will Hutchinson estimates the impact of new tariffs on U.S. goods (like soybeans) exported to China – which were levied in response to the United States’ tariffs on Chinese imports as part of an escalating trade war -- will cost his family more than $20,000 this growing season. Already, the price of soybeans has plummeted 20 percent since the White House began implementing new tariffs this spring.

“I have to be honest with you, patience among farmers is getting really short,” Hutchinson, now 29, told a local news network in a recent interview. “We’re to the breaking point here.”

The Hutchinsons are among a growing list of farmers across America’s heartland who are bracing for disaster or already feeling the pain from the budding trade war—and the timing couldn’t be worse. Our nation’s all-important agricultural economy already faces significant challenges, with profits from U.S. farms expected to reach a 12-year-low in 2018, according to the Department of Agriculture.

Related: How hard will the tariffs hit your state?  

Once merely another threat on the horizon, the escalating trade dispute has started to hit home for America’s farmers. “It’s getting beyond concerning now,” said Hutchinson, who warned that any further escalation of the trade war could have a lasting impact on the number of farmers in central Tennessee. “The rubber is hitting the road, and we’re fixin’ to have some significant repercussions.” 
Just to the west in Missouri, Casey Guernsey, a seventh-generation dairy and beef farmer, said he has already seen the negative effects from the tariffs start to play out. Many farmers in his area are selling off their breeding stock, and he has postponed plans to build a new barn. 

"The difference between making money and losing money per head sometimes is just a couple of dollars,” he said in an interview on CNBC. “Whenever you’re looking at duties like this, it could make or break the operation." He added that the uncertainty on farmers like him has long-term implications for his entire community. "Rural communities are dependent on agriculture. It’s their life blood.”

The same holds true as you move north to Iowa, where Bob Hemesath, a fourth-generation farmer in Winneshiek County, grows corn and raises pigs alongside his brother, Ron. Since the tariff developments began, prices for corn and pork have dropped about 15 percent.

“If we lose the export markets, it will hurt us from an economic standpoint,” Hemesath told NBC News. “It will hurt the ability to provide for our family, and it will hurt the state and the nation as it will hurt our economy eventually.” He continued: “If agriculture suffers, small-town Main Street suffers.”

Just across the border, Dennis VanDaele is feeling the sting in Illinois. “It’s cost me 50 cents a bushel on about 25,000 bushels of corn,” VanDaele, who also grows soybeans on his Reynolds, IL, farm, told a local news station. All told, “it’s cost me $10,000 to $12,000,” he said of the tariffs. Going further east to Indiana, Larry Enders, who runs a 700-acre farm in southeastern St. Joseph County, says he has already lost about $23,000 on the value of last year’s harvest since the trade dispute began. 

“There’s no way to make it back up,” the 74-year-old farmer said. “You just have to wait until next year.”

In the Lonestar State, Wesley Spurlock, a corn farmer in Stratford, told the Texas Tribune that the emerging trade war has already hurt his state’s farmers. He pointed to the sharp drop in the prices of corn and soybeans, adding that the price of cotton has decreased by over 11 percent, too. Spurlock credited the declines to the emerging trade war. 

Related: Tariff War Hits U.S. Agriculture and Manufacturing

Concerns are also mounting in Guthrie, OK, where Paul and Melinda Fruendt operate a soybean and wheat farm. "We have some concern," Paul Fruendt said in an interview, explaining that Oklahoma farmers may sustain a particularly heavy blow from the tariffs. "Our beans have to go out of state to be processed,” he said. “So I am sure we will see a decline in prices, if this actually holds. The worst thing about it is that tariffs normally end up messing around the market system itself."

In Stoddard, WI, Tim Servais, a dairy farmer, is grappling with that same sense of uncertainty. He told Wisconsin Public Radio last month that he’s worried about how his industry will plan for the future amid all the questions about tariffs and export costs. 

"Do we pursue this market? Because we don't even know if we’re going to be dealing with this country down the road,” Servais said in the interview. “And we have this big market lined up right here, but it might all fall through because of the trade situation." He noted that domestic consumption of dairy products would not be enough to make up for a steep decline in exports.

Greg Boerboom, a hog farmer in Marshall, MI, echoed the same concerns. 

“I hope the politicians can get this figured out and solve the problem before it impacts us too much,” Boerboom, who operates a 300,000-hog farm with his wife and two sons, recently told the Star Tribune, noting that the tariff “basically raises our price by 20 percent to Mexico.” He warned that “we can get by for a while, but you can only hedge so far in advance.” 

Continuing west to Idaho, Joe Anderson farms more than 4,000 acres of wheat (among other crops like barley and chickpeas) in Genesee alongside his brother, Jay. In an interview with the Idaho Farm Bureau Federation, he said the possibility that U.S. farm products could be faced with steep Chinese tariffs has sowed seeds of fear among Idaho farmers. “There is a lot of concern,” said Anderson, who has run his farm for 35 years. “It’s not the kind of positive market news we were looking forward to.”

Nor is it the kind of market news farmers can sustain for much longer. No matter where you look across America’s heartland, farmers and the families they support are growing increasingly worried about the escalating trade war, leading many to wonder whether their elected officials are listening. 

“I’m not sure the people in Washington have a full understanding of what their decisions are doing to us,” said Will Hutchinson, the soybean farmer from Tennessee. “We need them to come to terms and think about how this is affecting people in the homeland.” 

In response to mounting frustration from farmers across the country, the administration proposed spending up to $12 billion of taxpayer money to compensate farmers and ranchers for their loses. Notably, America’s agricultural community responded to the proposal by making clear they want trade, not aid

The administration’s focus should be expanding free trade and removing these harmful tariffs, not allocating taxpayer’s money to only marginally ease the suffering for some of the industries feeling the pain of the trade war. Or as Bill Gordon, a soybean farmer in Minnesota, recently put it: “We’d rather have trade. Any aid package, no matter what dollar amount, is a Band-Aid on an arterial bleed.”

About the Author

About the Author

J.D. Harrison
Executive Director, Strategic Communications

J.D. Harrison is the Executive Director for Strategic Communications at the U.S. Chamber of Commerce.