Trade disputes over agriculture add pain to low commodity prices that have been grinding down American farmers for years.
Please consider ‘This One Here Is Gonna Kick My Butt’.
Throughout much of the Midwest, U.S. farmers are filing for chapter 12 bankruptcy protection at levels not seen for at least a decade, a Wall Street Journal review of federal data shows.
Bankruptcies in three regions covering major farm states last year rose to the highest level in at least 10 years. The Seventh Circuit Court of Appeals, which includes Illinois, Indiana and Wisconsin, had double the bankruptcies in 2018 compared with 2008. In the Eighth Circuit, which includes states from North Dakota to Arkansas, bankruptcies swelled 96%. The 10th Circuit, which covers Kansas and other states, last year had 59% more bankruptcies than a decade earlier.
States in those circuits accounted for nearly half of all sales of U.S. farm products in 2017, according to U.S. Department of Agriculture data.
More than half of U.S. farm households lost money farming in recent years, according to the USDA, which estimated that median farm income for U.S. farm households was negative $1,548 in 2018. Farm incomes have slid despite record productivity on American farms, because oversupply drives down commodity prices.
Nationwide, the volume of loans to fund current operating expenses grew 22% in the fourth quarter from year-ago levels, hitting a quarterly record of $58.7 billion, according to the Federal Reserve Bank of Kansas City. The average size of these loans rose to $74,190, the highest fourth-quarter level in history when adjusted for inflation, the bank said.
To stay in business, some farmers have sold second homes purchased during a prosperous period earlier in the decade. They or their spouses have sought off-farm jobs to bring in additional income or pay for health insurance. Others have shrunk their operations, giving up rented ground or selling equipment to lower debt loads.
Bankruptcy by the Numbers
The articles also discusses suicides, forced auctions, and massive piles of debt that some farmers accumulated. The numbers do not seem all that large. But there just are not many farmers.
Assessing the Blame
This is not all Trump’s fault. Heck, it’s easy to claim that it’s mostly not Trump’s fault. But some of it is. Soybean and other agricultural exports to China plunged.
For many of those filing now, Trump’s trade war with China was undoubtedly the final blow following a long sorry trip.
Rapidly Aging U.S. Farmer
In 2014, the median age for farmers and ranchers was 55.9 years, second among tracked occupations only to “motor vehicle operators, other,” who have a median age of 59.2.
This census, which is published every five years, shows that during the last 30 years, the average age of U.S. farmers has grown by nearly eight years, from 50.5 years to 58.3 years.
It’s important to remember that this figure includes only principal operators, meaning any large farms that have one farmer at the helm but other, younger farmers helping out will only have that one farmer at the top represented. Still, the increase reflects that for many years, new, young farmers were tough to come by, one expert says.
Canadian Beef Producers Enjoy TPP Trade Boost in Japan
The Financial Times reports Canadian Beef Producers Enjoy TPP Trade Boost in Japan
The surge is due to Canada and Japan being in a TPP deal which Trump dropped out of.
As a result of the TPP agreement, Japanese tariffs on Beef imports from Australia, Canada, and New Zealand are 27.5% vs 38.5% for US beef exporters.
Japan is willing to cut tariffs on US beef, but guess what? Japan wants trump to lower tariffs on Japanese cars.
Unmitigated Disaster
Trump’s trade policies have been an unmitigated disaster.
Because of the plight of US farmers, I expect Trump will get a trade deal with China sometime in March. Both China and the US are losers in the fight.
Just don’t expect an earthshaking agreement. Do expect earthshaking bragging over a deal that likely will not do much.
The US has trillion dollar deficits as far as the eye can see, and recession hasn’t even hit. Unfortunately, the most likely way the trade deficit drops is via an import demand collapse in the next recession.
Mike “Mish” Shedlock
If you go back to when the trade war started there was some relief put in by Trump to help farmers in their tough time. If you look closer you could see it was only to help the ADM’s of the world that have big acres. I hate to tell you all little man will get sqeezed out no matter who you elect.
In any society shy of a completely, 100% government free anarchy without even a police officer to call should someone be beheading your kids for kicks; bigger, wealthier guys will have better access to government, than smaller, less wealthy guys. Hence, it is 100% certain, at all times, in all places, forever, that government will work to transfer ever more wealth and privilege from the little guy, to those wealthier.
Complete anarchies do solve that particular problem, hence the lack of a stable and consistent rich and powerful upper class in Afghanistan. But their solution do come with other issues, which most westerners probably no longer have the stomach for. Permanent war and violence, and an entire culture built around a viking like warrior ideal, being the most obvious.
But still, the absolutely unavoidable truism, that all government will always seek to enrich and empower those with best connections to it, and connections to political power is a normal economic good hence the more you can pay, the more you get, is a darned good reason to limit the size, scope and influence of government as much as at all possible. Stick to the cheapest and lest intrusive possible way of attempting to enforce the Ten Commandments or thereabouts. Scrap the rest. Every little added inch of power government get, they WILL use, all the time, everywhere, without any possible exception, to further the interests of the wealthy and connected, to the detriment of everyone else. No amount of pretending, or even being honest about, “caring,” about poor people, can ever change that.
Stuki; There are 350,000,000 of us and only a board of directors in a fortune 500 company. So I guess we see the reason for all of the divisions being drawn in everywhere. Just like you saw in France if people will stand up the worms go underground.
Correct Chris. If the aid had been limited to small holdings it would have been effective from a fairness standpoint, but not a corporate welfare and to-hell-with-those-without-paid-lobbyists standpoint.
I love this story about farm bankruptcies. I hope they all go bankrupt and have to live in cardboard boxes for the rest of their lives. Let them eat Trump’s lies for dinner.
Now WHY would you hope hard working honest farmers go bankrupt…. ????
I think this response is an expression of exasperation over the mind blowing stupidity of people voting for a man who bankrupted 4 companies, despite inheriting tons of money. He even bankrupted a CASINO, so how stupid must you be to think this clear idiot would not bankrupt the country? They were warned, and yet they voted for him because they were easily roused by fear and hate of the “other.” so, they got what they voted for. Seriously, how do you believe a man who bankrupted a CASINO will make good decisions for YOU? “A fool and his money/farm are soon parted.”
Wow,,, you really gotta feel sorry for the the farmers that voted for Hillary,,, go bankrupt and folk like you glad it happened to them… then there are all the banks, equipment suppliers, grain companies, not to mention retirement funds that will suffer losses,,,
If farmers go hungry so are the rest of us. 🙁
Are Hillary truths really that much better than Trump’s lies?
Trumps tariff policies favor certain investors.
1.) Drive farms into bankruptcy.
2.) Campaign donors buy bankrupt farms for pennies on the dollar.
3.) Make trade agreements favoring farms.
4.) Value of farms instantly go up.
Either that or you could go out on a limb and think corporate/gov takeover.
Looks like significantly overall more farmer bankruptcies under obama than Trump.
Kinda like the way Cindy Sheehan disappeared the day obama was elected.
During a PBS town hall that aired Wednesday, Obama referenced Trump’s promise to bring back jobs to the United States when talking about manufacturing.
“Well, how exactly are you going to do that? What exactly are you going to do? There’s no answer to it…What magic wand do you have?” Obama said.
Well duh Obama was president for 8 years, trump only 2… The link you provide doesn’t give any support for even that claim however.
“Looks like significantly overall more farmer bankruptcies under obama than Trump.”
What is your point? Please explain.
Why is that worthless POS still out running his mouth? Is a proxy AOC ala Obama coming to town?
And your knee-jerk hatred for the man who brought this country OUT of a recession, either because he is black or otherwise, is exactly why these farmers were stupid enough to vote for a man who went bankrupt four times, and even bankrupted a casino. Hate over thinking. Utter stupidity.
You clearly didn’t read the whole article, you lazy git. Obama was in office for 8 years. This idiot has only been in office for 2 years. Do the math.
“Bankruptcies in three regions covering major farm states last year rose to the highest level in at least 10 years. The Seventh Circuit Court of Appeals, which includes Illinois, Indiana and Wisconsin, had double the bankruptcies in 2018 compared with 2008. ” That is from the article, genius. So, no, you are lying. BTW, how much do the Russians pay you, traitor?