Two outspoken Kansans scored the trade war with China as needlessly disruptive for the farm sector on Tuesday, with Senate Agriculture chairman Pat Roberts comparing it to the five-week partial government shutdown and economist Barry Flinchbaugh urging Congress to curtail President Trump’s power to impose tariffs in the name of national security. In a pause in the trade war, China bought 2.6 million tonnes of U.S. soybeans, the third-largest soy sale in USDA records.
“One thing Congress can do is end his (the president’s) authority” to invoke tariffs, said Flinchbaugh during a Farm Foundation forum on implementing the 2018 farm policy law. “They’re not helpless. They just need some fortitude.” Legislation to narrow the definition of “national security” in conjunction with application of Section 232 tariffs is pending in the Senate. A similar proposal passed the Senate as a non-binding resolution last year, said CNN.
Flinchbaugh, a faculty fixture at Kansas State University, said sentiment in the wheat belt was shifting as farmers and lenders see the impact of persistently low market prices. “I could not be more blunt. We need to end this trade war. Putting tariffs on (imported) steel and aluminum was stupid.” Besides retaliatory tariffs imposed by China, U.S. farm exports face tit-for-tat duties in Canada and Mexico, the two largest export customers.
In discussing his opposition to another shutdown, Roberts said: “They never achieve their purpose.” Roberts said trade retaliation had a similar, harmful effect, on a lot of people. “You never know where it will end,” he said.
In the midst of the trade war, China pledged last week to buy 5 million tonnes of U.S. soybeans. Tuesday’s purchase of 2.603 million tonnes, worth roughly $880 million, showed Beijing was following through. On Monday, the USDA confirmed a sale of 612,000 tonnes to China. The two-day total of 3.25 million tonnes is equal to 118 million bushels of soybeans. The 10 largest soybean sales in USDA records all were made to China, the largest soybean importer in the world. The record sale was 2.923 million tonnes on Feb. 12, 2012.
Before the trade war, China bought one-third of the soybeans grown by U.S. farmers. This week’s purchases will nearly double sales to China in the marketing year that began last Sept. 1 but they are still only a fraction of the volume at this point in 2017/18.
Deputy Agriculture Secretary Steve Censky told the Farm Foundation audience, “We’re going to be moving just as quickly and prudently as we can to implement it (the farm law).” Censky, who chairs a working group in charge of implementation, said the USDA is weeks away from a sign-up period for farm supports. Planting season is on the horizon.
“I’ll be able to tell you more in a couple of weeks,” he said afterward, when reporters asked when enrollment would begin for this year’s crops. The 2018 law gives farmers the first chance in five years to switch between the traditionally designed Price Loss Coverage (PLC) subsidy and the insurance-like Agricultural Risk Coverage (ARC) subsidy. Analysts expect a surge into PLC by corn, soybeans and wheat growers.
USDA priorities in farm bill implementation, said Censky, include the new dairy subsidy, which took effect on Jan. 1, ARC, PLC, land stewardship, and trade promotion programs.
In farm country, SNAP and other USDA nutrition programs are often second in importance to discussion of farm supports. “SNAP holds the farm bill together,” said Flinchbaugh, because it affects every congressional district. “I look at that as the glue that holds this framework together.” House Republicans failed during the 2018 farm bill to curtail SNAP.
To listen to an audio of the Farm Foundation forum, click here.