US farmers are stuck with fields full of weather-damaged corn
WASHINGTON, Jan 7 (NNN-AGENCIES) — Across snow-covered North Dakota, US farmers are stuck with fields full of weather-damaged corn – a crop they planted after the US-China trade war killed their soybean market.
In Texas, Kansas and Colorado, farmers are weighing whether they should plant fewer acres of corn and more sorghum, even though China has all but stopped buying it. That’s because sorghum costs about half as much as corn to plant, which appeals to farmers wary of investing too much for an uncertain return.
As the US farm economy reels from the worst harvest in decades after nearly two years of the trade war, US grain growers are struggling to decide what crops might keep them in business.
President Donald Trump announced last month that China had agreed to double its pre-trade war purchases of U.S. agricultural products over the next two years as part of a Phase 1 trade deal. That brought little comfort to US farmers because China still has not confirmed the commitment or signed any deal.
Trump administration officials say the Phase 1 trade deal with China will be signed in January, though many tariffs will remain in place during further negotiation. Commodity market analysts and agricultural economists warn an agreement won’t be an immediate fix for the U.S. farm economy because the conflict has spurred China to develop new supply chains.
China has, for instance, deepened ties with rival exporters such as Brazil and Argentina. Brazilian soy cultivation is expanding after record exports to China in the past year and China is investing in South American ports.
Making matters worse, China’s need for soy and sorghum to feed livestock is waning because of a deadly pig disease that experts estimate has killed off about half the world’s largest hog herd. China’s hog industry has also worked to reformulate pig rations to include less soy and more alternative feeds that don’t have to be imported from the United States.
Many U.S. farmers have tried shifting crops to dodge the economic fallout from losing such a crucial export market. They planted 76.5 million acres of soybeans in 2019, 14.3% fewer than the previous year, according to the latest U.S. Department of Agriculture data. U.S. plantings of sorghum – used in livestock feed and the fiery Chinese liquor baijiu – dipped about 7.5% in 2019, to 5.3 million acres. Plantings of cotton have dropped, too, as China pulled back on purchases.
Plantings of such China-dependent crops likely would have fallen much further were it not for the Trump administration’s allocation of $24.5 billion in aid to compensate farmers for trade-war losses. The bailouts gave many farmers an incentive to keep planting crops such as soybeans that they knew would be difficult to sell at any profitable price. Government handouts are expected to account for nearly a third of 2019 net farm income, according to federal government and bank regulatory data.
Trump administration officials have not said if farmers will get more payments in 2020.
USDA Deputy Press Secretary Alec Varsamis said the agency would decide in January on future payments. — NNN-AGENCIES
