The new trade deal the U.S. has signed with China will ease some of the tension on our farmers.
The Trump administration announced with Phase I of this new deal China will step up its purchasing of American farm products, including beef, pork, poultry, seafood, rice and dairy products though no specific dollar amounts have been released.
This is a step in the right direction. Is it perfect? No, but it’s better than what we had prior to the deal being reached. We hope that talks continue as negotiators work on Phase II, and we’d like to see some specificity if possible.
The deal’s provisions call for China to purchase the U.S. ag goods based on “market conditions.” Again vague, but there could be potential.
There are an estimated 59,600 farms in Kansas, all of which will be impacted by this deal.
It’s no secret that farmers are hurting, and while crop failures and unexpected weather patterns played a part in this, so did the trade war. This deal should ease some of that burden.
The American Farm Bureau Federation released a study in late 2019 finding that Chapter 12 farm bankruptcies were up 24% from the previous year, citing record numbers in overall U.S. farm debt estimated at $416 billion, with $257 billion in real estate debt and $159 billion in non-real estate debt.
Hopefully, an economic upswing from this deal may lead to less debt stress.
Our farmers and ranchers in the Sunflower State and across the U.S. aren’t asking for a handout, just a fair deal.
Getting China to trade equitably will be key to determining the long-range success of this deal.
According to Farm Bureau, the U.S. exported $19.5 billion of agricultural products to China in 2017. As a result of retaliatory tariffs, agricultural exports were reduced to $9.1 billion in 2018. Those numbers are pretty stark. We’d like to see them closer to what they were in 2017.
In the meantime, we’re just happy to see some progress on the trade front.