Patterico's Pontifications

8/6/2019

Farmers, Bankers and Tariffs

Filed under: Economics,Government — DRJ @ 1:00 am



[Headlines from DRJ]

U.S. farmers are exasperated by latest trade war moves: ‘Another nail in the coffin’:

In response to President Trump recently announcing 10% tariffs on $300 billion in Chinese goods, China allowed the yuan to weaken and suspended purchases U.S. agricultural products.

“The Chinese market has a large capacity and the prospect of importing high-quality U.S. agricultural products is bright,” state-owned media Xinhua said on Monday. “However, we hope the U.S. will conscientiously implement the consensus reached at the [G-20 summit in Osaka, Japan] between the heads of the two countries, and implement the commitments to create the necessary conditions for cooperation in the agricultural fields between the two countries.”

America farmers were dismayed by the developments. “This is just another nail in the coffin,” Tyler Stafslien, a North Dakota-based soybean farmer, told Yahoo Finance. “To see this thing only seems to be getting worse rather than better is very concerning, and the American taxpayers may have to foot another round of funding if this keeps up — or we could see a ton of farmers’ loss throughout this nation.”

Wall Street banks bailing on troubled U.S. farm sector:

The retreat from agricultural lending by the nation’s biggest banks, which has not been previously reported, comes as shrinking cash flow is pushing some farmers to retire early and others to declare bankruptcy, according to farm economists, legal experts, and a review of hundreds of lawsuits filed in federal and state courts.

Sales of many U.S. farm products – including soybeans, the nation’s most valuable agricultural export – have fallen sharply since China and Mexico last year imposed tariffs in retaliation for U.S. duties on their goods. The trade-war losses further strained an agricultural economy already reeling from years over global oversupply and low commodity prices.

What’s next? Trump will call for more farm aid.

— DRJ

13 Responses to “Farmers, Bankers and Tariffs”

  1. Full of slow moving greedy lawyers congress is America’s soft spot and the chicoms know it.

    mg (8cbc69)

  2. Looking at USDA charts of soybean prices and crop yields, the current price could be due to twice as many tons being produced now than in 2012. In commodities oversupply can lower prices more than tariffs.

    EPWJ (2e9fee)

  3. Yup. They should have impeached the orange last November as soon as they lost the House, and nobody would even remember him now.

    nk (dbc370)

  4. Bear with me for a moment as I throw out this quick observation. Early in the morning I see heavy traffic on major thoroughfares as citizens make their way from one side of the city to the other. On a few roads the traffic is heavily in one direction, sure, but on most it seems to be evenly congested both ways.

    Why on earth do we have half the workforce commuting across the land – both ways? Yeah, yeah, freedom – sure. A first mind wonders about the inefficiencies of time and resources and thus, sees a problem to be solved. A second mind sees an orderly, and relatively safe procession of the workforce, and sees evidence of prosperity, industry and opportunity.

    It is not unreasonable to see that both minds would seek to advance their viewpoints. Likewise, I see the term “American farmers” and wonder to myself “am I expected to assign Grant wood’s American Gothic to this description?” Haven’t most (not all) of the mom and pop farms been swallowed up by big business? And this “nail in the coffin” idea. Whose coffin? The rent-seekers business model? The free-market model?

    But back to the traffic analogy. I see food traveling to opposite sides of the world. A first mind wonders at the inefficiencies of time and resources spent. A second mind sees an orderly working of free-trade, industry and opportunity. Both minds are going to want to pursue their own course of action. Enter government.

    felipe (023cc9)

  5. 3. felipe (023cc9) — 8/6/2019 @ 6:06 am

    Why on earth do we have half the workforce commuting across the land – both ways?

    Differentials in housing costs. The longer the commute the cheaper the housing. Furthermore, many people may be virtually “locked into” their homes. Not to mention the monetary costs of moving and the disruption,.

    A lot of people also don’t limit their job search, or highly prefer places where they have a short but rather tend to set a maximum commuting distance or time.

    A long time ago (like the 1950s) people used to move closer to their jobs, but this is no longer so

    So therefore the long commute.

    Why in both directions? That may have something to do with your metropolitan area. There may be one central business district..

    What metropolitan area is this?

    Sammy Finkelman (d542b2)

  6. Sammy, I addressed this; “Why on earth do we have half the workforce commuting across the land – both ways? Yeah, yeah, freedom – sure.”

    Every point you make is easily explained by each person’s freedom to prioritize and then decide their own fate. Whether their solution is wise or foolish is not for a single mind or, government, to judge much less solve.

    felipe (023cc9)

  7. But the question is why do we have this now when we once did not?

    The freedom to choose both where you lied and where youu worked existed for a long time, but commutes have bene getting longer and longer, especially in California.

    Of course, at one time, work had to be wthin walking distance,

    Sammy Finkelman (d542b2)

  8. It isn’t just farmers but steel companies and other businesses as well. The stock market too.

    https://reason.com/2019/08/05/this-steelmaker-looked-like-a-winner-in-the-trade-war-now-its-suing-the-commerce-department-for-relief/

    Eric Boehm is correct. More often than not, protectionist policies end up harming the industries they were implemented to help. The tariff racket formed a monstrous bureaucratic beast in the Commerce department, which is slow-moving and all-devouring, prone to cronyism and favoritism.

    Gawain's Ghost (b25cd1)

  9. which is slow-moving and all-devouring,- Gawain’s Ghost (b25cd1) — 8/6/2019 @ 7:05 am

    I love that phrase!

    felipe (023cc9)

  10. Lots of rhetoric – few facts. And who are these “farmers” specifically? And how much are they “hurting”?

    Numbers please.

    rcocean (1a839e)

  11. Farm Bureau:

    The following may be attributed to American Farm Bureau Federation President Zippy Duvall: “China’s announcement that it will not buy any agricultural products from the United States is a body blow to thousands of farmers and ranchers who are already struggling to get by.

    “In the last 18 months alone, farm and ranch families have dealt with plunging commodity prices, awful weather and tariffs higher than we have seen in decades.

    “Farm Bureau economists tell us exports to China were down by $1.3 billion during the first half of the year. Now, we stand to lose all of what was a $9.1 billion market in 2018, which was down sharply from the $19.5 billion U.S. farmers exported to China in 2017.

    “We are grateful for Market Facilitation Program payments many farmers and ranchers have received, allowing them to continue farming during this difficult time. Even so, we know that aid cannot last forever. We urge negotiators to redouble their efforts to arrive at an agreement, and quickly. Exports ensure farmers will continue to supply safe, healthful and affordable food for families here and around the world.”

    DRJ (15874d)

  12. 9. Putting “farmers” in scare quotes is rhetoric.
    Quoting actual farmers, and referencing hundreds of lawsuits, and pointing to declining sales figures etc. — those things are not mere rhetoric.

    Radegunda (be5f68)

  13. I feel bad for farmers. No one wants to see their livelihoods — their way of life — disappear like this. I also feel bad that they fear government will ruin their lives. Many people feel that way but farmers seemed to believe Trump could fix it. They are learning the hard way that wasn’t true. In fact, Trump has turned the threat of ruin into reality.

    DRJ (15874d)


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