ANDERSON — Farmers are in the cross hairs of the ongoing trade dispute between the U.S. and its partners, according to a Purdue professor.
Chris Hurt, professor of agriculture economics at Purdue University, said Wednesday the trade dispute with China is having a considerable impact on Indiana farmers.
"The tariffs put into place last year are reducing the amount of exports of agricultural products," Hurt said. "The trade dispute with China is the focal point of the Trump administration."
He said there are also concerns about the trade talks with Canada and Mexico that have not been settled.
China is the largest importer of soybeans and that Canada and Mexico are in the top five when it comes to imports, he said.
"Agriculture is in the cross hair," he said. "There is a lot of concern and discomfort among Indiana farmers."
Hurt said, for the most part, the agricultural community is supportive of the overall direction of the trade talks.
"Farmers want access to the markets," he said. "President Trump has brought the trade issue to the forefront."
A survey done by the Indiana Farm Bureau found that 72% of respondents indicated the trade situation is jeopardizing their operation.
"The agriculture industry is dealing with a number of issues that impact a farmer's bottom line right now," Randy Kron, president of the Indiana Farm Bureau, said in a press release. "There's a surplus of commodities in the market due to higher than average yields, and over the last five years farmers have seen a 50% drop in farm income. Add the additional impacts of trade wars and tariffs to the existing issues, and the financial situation has become even more concerning.
"It will take many years to replace the export market that was lost during the trade war with China," Kron said. "Farmers understand the need to take corrective action regarding some of the trade inequities with China and to address the Chinese disregard for intellectual property rights. But if agreements aren't passed and additional efforts aren't made, some Indiana farmers will not be able to weather this storm."
Hurt said the market revenue for Indiana farmers from corn and soybean production is expected to be down about 20% this year.
Corn yields are estimated to decline by 12% and soybeans by 15% statewide, he said.
Local farmer Brian Bays predicted the corn yield will be down by up to 25% in Madison County and soybean yields could be down 30%.
"I don't see it improving that much," he said, because of the wet spring and late planting.
Hurt expects the price for corn and soybeans to be about the same per bushel as compared to 2018.
"Fewer acres were planted, which means a lower yield," he said. "There was a major weather event this spring that will reduce production throughout the corn belt.
"Normally, prices would have elevated," Hurt said. "We're not seeing that increase in prices."
He said there are also large inventories of both corn and soybeans and the trade dispute is limiting the ability to sell.
Bays said prices did rally about three weeks ago.
"The price has eroded," he said. "The trade war has impacted bean prices."
Hurt said the $28 billion in farm aid being provided by the Trump administration is providing a substantial amount of help.
He said in 2018 the total farm income in Indiana was estimated at $69 billion and the federal aid should amount to $1.3 billion.
"That's an important number to our families that farm in Indiana," Hurt said.
Bays said the federal assistance does help the farming community.
"I'm not real confident that we will have a trade agreement with China in the short term," he said. "We do need to be negotiating with China, which is a large purchaser of soybeans.
"We're in a real trade war right now," Bays said. "Opening the markets will increase the price of soybeans."
He agreed there is a large number of bushels of both soybeans and corn in storage.
"It needs to be exported," Bays said.
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