In last night?s State of the Union Address, President Trump touted the recovery of the American Economy. It is true we are seeing the soaring stock market and low unemployment rates. However, there is growing concern that any recovery will take time to be felt in the agriculture sector. For some producers, it may even be too little too late for them to continue operating their family farms.
The President cited the trade deals we secured in the United States ? Mexico ? Canada Agreement (USMCA) and the Phase One deal with China. Those sentiments were echoed by Iowa Senator Chuck Grassley in his weekly chat with the agriculture media on Tuesday morning. Grassley touted not only trade progress but also the repeal of the Obama-Era Waters of the United States rule (WOTUS) and the opening of year-round sales of E15. Senator Grassley said the President has every right to brag about these accomplishments.
President Trump did highlight the trade deals in his State of the Union Address last night. However, there is still concern that some farmers suffered too much and got help too late because of the trade wars. This is evidenced by the paying of the third tranche of Market Facilitation Payments this week. Senator Grassley said that obviously there wasn?t going to be immediate recovery from the signing of the trade agreement with China, or we wouldn?t have needed the final round of payments.
United States Agriculture Secretary Sonny Perdue spoke along those same lines on Monday when he authorized the payments.
Not everybody was impressed with President Trump?s remarks. National Farmers? Union (NFU) President Roger Johnson commented after President Trump?s Address that the President?s outlook on the economy was ?insensitive for the millions of farmers struggling to get by.? Johnson cited information found in a Reuters report showing that according to United States court filings, family farmers filed 595 Chapter 12 bankruptcies in 2019, up from 498 filings a year earlier. The amount of farm debt has risen to nearly $416 billion. This is the highest it has been since the farm crisis of the ?80s.
While Johnson has supported the administration for the efforts of issuing the MFP payments, he has also been critical that they haven?t been enough to patch the financial holes. The same Reuters report showed that the MFP payments were nearly one-third of farm incomes for 2019. This data came straight from the United States Department of Agriculture.
The biggest fear NFU President Johnson has is the time recovery will take. Johnson says, ?while newly established trade deals are a bright spot for American agriculture, any tangible benefits for family farmers and rural communities are likely a long way off. This administration?s trade wars have caused real, lasting damage, both to agricultural export markets and to our reputation as a trading partner, and it will take time for both to recover.?
The deals have been signed, but the markets still are depressed at this moment. Yes, there are more factors that weigh on these prices than just trade. However, farmers need to see recovery sooner rather than later. Ag Secretary Perdue has already said this third tranche of MFP payments is it. With the trade deals signed, there is no reason to issue trade policy-based assistance to farmers anymore. Let?s hope the effects of trade deals can trickle down to the American farmers as quickly as possible, so they can also feel the recovery that President Trump touted in his State of the Union address.
