Farmers, like this one at Dixon Road and 200 South, were plowing fields on May 2, 2018. Tim Bath | Kokomo Tribune
Farmers, like this one at Dixon Road and 200 South, were plowing fields on May 2, 2018. Tim Bath | Kokomo Tribune

George Myers, Mark Saluke and Lilly St. Angelo, Kokomo Tribune

Farmers are concerned this week over looming threats to Howard County’s agriculture industry, ranging from a wet start to the season and a trade war with China that has amplified in recent days and intensified worries about certain crops’ economic viability.

The week started ominously for many farmers when China announced higher tariffs on $60 billion worth of American exports on Monday, a move that came in response to President Donald Trump’s latest penalties on Chinese products.

While Trump has in recent days promised farmers will be taken care of – he has pledged an additional $15 billion in aid to American farmers after last year’s $12 billion Department of Agriculture plan – concerns continue to fester inside an industry that relies heavily on revenue from China’s consumer market.

Mathias Ingle, the associate ag and natural resources extension educator at Howard County Purdue Extension, said concerns about the profitability of crops like corn and soybeans exist throughout Howard County and have been on the minds of farmers since the U.S.-China trade war began to escalate last year.

“Definitely, yes,” he said. “I would say some of those concerns started about the time the tariffs started to go into effect.”

And while farmers understand the Trump administration’s thought-process behind holding China accountable for unfair trade practices, the industry-wide impact has been harder to accept.

Farmers, noted Ingle, have seen Trump’s tactics as “something that probably needed to be done at some point in time. They just wish it would have been done in a different way.”

Tom Madru, grain manager at Kokomo Grain Co. and a corn and soybean farmer, said farmers in Howard County are frustrated with the low crop prices and unpredictable market caused by Chinese tariffs. 

Madru said he’s personally upset about the effect of Trump’s rhetoric on the grain market, especially the president’s tweets.

“I’m really disappointed in the president because he’s making these tweets that are really impacting farmers and not making it profitable to sell these grains,” Madru said.

He said circumstances may get better if the president is able to lift China’s tariffs on agriculture products, but Trump did not accomplish that goal in recent talks with China.

“He keeps tweeting that they’re getting close and then he tweets, maybe not,” Madru said.

One example of a Trump tweet storm came early Tuesday when he said a deal with China will be made “when the time is right.”

“Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now. Hopefully China will do us the honor of continuing to buy our great farm product, the best, but if not your Country will be making up the difference based on a very high China buy,” said Trump.

“This money will come from the massive Tariffs being paid to the United States for allowing China, and others, to do business with us. The Farmers have been ‘forgotten’ for many years. Their time is now!”

Much of the concern in Howard County is attached to corn and soybeans – which Ingle said is the “primary cash crop for a lot of the rural farmers today out in our county” – and their markets.

“They just came off of years of making all this money, but yet at the same time now they’re kind of in the down-swing. I expect it to go back up some point in time, but it’s just a matter of when,” he noted.

Another concern this spring is weather and its influence on area farms. Rain has been abundant, leading to a delayed start to the season. The impacts of a wet spring can include a lesser yield at harvest time; a shorter window to get crops into the ground; and changing varieties.

In some instances, farmers will switch from corn to soybeans.

“They’re always antsy to get out into the fields and to get that crop into the ground. But it’s just kind of delayed them,” said Ingle. “It’s just made them more – I don’t want to say more nervous, but yet at the same time it’s a little more concerning to them.”

Farmers in many Midwestern areas have suffered from a wet and cooler spring, which has prevented them from planting corn. Typically when it becomes too late to plant corn, farmers will instead plant soybeans, which can grow later into the fall before harvest is required.

Regarding how weather has played into worries about the trade war, Ingle said: “I think they’ve gone hand-in-hand. I don’t know if [weather has] amplified [existing concerns]. I think it’s just another piece of the puzzle. It’s not the whole picture, but it’s a piece of the puzzle, in my opinion.”

About farming, and specifically the inherent gambles that come with stockpiling crops, Ingle said that right now “the risks are higher. Profitability is the biggest thing.”

Meanwhile, an increase in stockpiling, in part due to what Ingle called a “bin-buster” of a year in 2018, has become a talking-point for many across the state and nation when discussing the trade war’s impact on the agriculture industry. As crops sit in bins, worries mount about their worth.  

A slowdown in soybean sales, and the huge stockpiles that result, has a ripple effect, reported the Associated Press on Monday. Soybean farmers - who had expressed hope about potential Chinese sales since December, when U.S. and China negotiators called a truce on tariffs and began signaling that an agreement might be reached - have stored a record stockpile of nearly 1 billion bushels.

In conjunction, Bloomberg reported Monday soybean futures fell to the lowest level in a decade, to below $8 a bushel for the first time since 2008.

Yet now, planting soybeans with the overabundance already in bins and scant hope for sales to one of the biggest buyers in China, could raise the risk of a financial disaster.

The two countries have given themselves something of an escape hatch: The higher Chinese tariffs don’t kick in for 2.5 weeks. The U.S. increases apply to Chinese goods shipped since Friday, and those shipments will take about three weeks to arrive at U.S. seaports and become subject to the higher charges.

In the meantime, talks between the international heavyweights are expected to continue.

Still, Kathy Parkison, an Indiana University Kokomo economics professor, sees the ongoing back-and-forth tariffs struggle as playing hardball with people’s lives.

Mixed in with the cool and wet spring, it’s been a nasty combo punch to farmers in the Midwest.

“Between the weather and the tariffs, a farmer’s usually tough decisions just became even tougher,” said Parkison, who is also an area farmer. “As many economists have noted, the tariffs Chinese are leveling on America will impact the farming community.

“This spring with its very wet weather and the late planting season and now the tariffs have really complicated farmers’ decisions,” Parkison added. “I have heard from some farmers that they are not sure what, if anything, they will actually plant this season. Will they switch from corn to beans? Is there enough short-season corn out there to purchase if they do decide to stick with corn?”

With those types of decisions on the horizon, Parkison noted it will be interesting to see if some of Trump’s area supporters in the farming community will sway.

“Will it change? Are they willing to bite the bullet and have a bad year? I don’t know,” Parkison said, “but the weather just makes this one absolutely horrific.”

Parkison said that on her drive to work Tuesday, she noticed a few farmers had crops planted, while 95 percent along the route she drives did not.

While she equates bailouts to following bad money with bad money, she also noted that once the mistake has already been made, maybe the bailouts are what could keep the Midwest from metaphorically drowning in a literal wet season.

Farm income was up in the early 2010s, according to Parkison, but many farmers who had a cushion going into last year and then this year will likely see that cushion being depleted soon. She said for those who are heavily leveraged with debt, this season could be the nail in the coffin.

“As a kid I remember making a mistake and trying to cover it up and the cover up was worse than the mistake,” Parkison said. “And I think that’s kind of what’s going on here. There’s a mistake with the tariffs and now I do understand why some people like the tariffs. I just don’t know that this was the right way to do it.”

The Associated Press contributed to this story.

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