Farmers fret and wait as US-China trade war escalates
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Many anxious American farmers are delaying purchases and investment while hoping for a truce in a U.S.-China trade war that has left their crops at a competitive disadvantage overseas.
The longer the Trump administration's tariffs remain in place, the more China's retaliatory tariffs against American exports stand to hurt U.S. soybean and pork producers.
President Donald Trump's administration on July 6 carried out its threat to impose 25 percent tariffs on $34 billion worth of Chinese products, alleging that Beijing steals or pressures U.S. companies to hand over technology. China responded with similar duties on the same amount of U.S. imports -- including soybeans and pork. The administration July 10 announced a second possible round targeting $200 billion worth of goods. Beijing vowed "firm and forceful measures" in response.
"From a farmer's perspective all you can do is wait and hope, which aren't very good options," said Michael Petefish, who grows soybeans and corn near Claremont in southern Minnesota. "If you can afford not to be selling your beans now, just put them in the bin and store them and wait for better markets. That's about all you can do."
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Wanda Patsche and her husband, Chuck Patsche, stand to be doubly affected. They grow corn and soybeans and raise pigs near Welcome in southern Minnesota. She said the main thing they and their neighbors have done to cushion themselves is to delay investment in their farming operation.
"There will be no equipment purchases, no improvements, just holding our own. Basically a holding pattern. And hoping things are going to get worked out fairly quickly," she said.
Farmers often hedge against price downturns by selling part of their crop on the futures market, locking in an early price for crops they'll harvest in the fall. Patsche said she and her husband marketed a little of their 2018 crop, so they can count on a profit for those bushels, but they'd take a loss if they sold any more at current prices. So they're hoping the markets get some good news that will send prices back up.