If the United States and China settle their ongoing trade dispute, commodity prices could recover from their recent decline, said Agriculture Secretary Sonny Perdue on Wednesday. At the same time, he promised a USDA backstop in case of trouble. “Hopefully, we can resolve this before any of this happens, and we can see beans go back up north of $10,” he said during a CNBC interview.
President Trump told Perdue on April 5 to draft a plan to shield producers from the effects of unfair Chinese retaliation to U.S. tariffs. Perdue said he meets with the USDA chief economist each week to discuss market fluctuations and their trade component.
Perdue declined to say if he thinks farm prices are already being affected by the trade row. China imposed steep tariffs on U.S. pork in the spring in response to U.S. duties on imported steel and aluminum. Beijing says it will hit commodities including soybeans, beef, cotton, corn, sorghum, wheat, and dried distillers’ grains on July 6 if the White House puts 25 percent levies on $50 billion of Chinese high-tech products. “It’s not that simple, obviously,” said Perdue. “It’s a complex calculation.”
Perdue also said that while farmers are patriots, “They know patriotism can’t pay the bills.”
Separately, the USDA’s quarterly Hogs and Pigs report listed a U.S. total of 73.5 million head, “the highest June 1 inventory of all hogs and pigs since estimates began in 1964.” The U.S. hog herd was 3 percent larger than a year ago. Hog farmers are expanding production in the face of falling market prices. More than one-fifth of U.S. pork is exported.
To watch the CNBC video, click here.