Indiana Farm Bureau recently conducted an online survey of farmer members to gauge how the ongoing trade conflicts and increasing tariffs are impacting their operations. The survey received submissions from farmers across the state.
According to survey data, 72% of respondents said the current trade environment’s impact on commodity prices is jeopardizing their farm operation.
Commodities across the board have seen a sharp decline in prices since the tariffs between the U.S. and China were announced and enacted. For example, in April of 2018, the soybean price was holding firm at around $10.40 per bushel. After the tariffs were announced and put into place, those prices dropped. Today, the price per bushel of soybeans is in the $8 range. Prices for other commodities including corn, which is produced by a large number of Indiana farmers, have also dropped significantly.
“The agriculture industry is dealing with a number of issues that impact a farmer’s bottom line right now,” said Randy Kron, INFB president. “There’s a surplus of commodities in the market due to higher than average yields, and over the last five years farmers have seen a 50% drop in farm income. Add the additional impacts of trade wars and tariffs to the existing issues, and the financial situation has become even more concerning.”
The INFB survey also sought to understand the level of satisfaction with the current trade climate and the importance of passing the United States-Mexico-Canada Agreement. When asked about the current trade situation, 56% of Farm Bureau members who responded said they were not satisfied, and 65% said it was very important that USMCA is ratified.
“Farmers’ patience on the trade situation certainly seems to be stretched thin,” said Kron.
“It’s crucial that the administration finalizes and implements the USMCA, and that they continue to work toward additional agreements with Japan, the European Union and other nations. It will take many years to replace the export market that was lost during the trade war with China. Farmers understand the need to take corrective action regarding some of the trade inequities with China and to address the Chinese disregard for intellectual property rights. But if agreements aren’t passed and additional efforts aren’t made, some Indiana farmers will not be able to weather this storm.”
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Aside from the trade situation and the decline in farm income, Hoosier farmers also are contending with Mother Nature this year. This spring, Indiana has had significant amounts of rain and not enough clear days to dry the fields. As of May 19, the United States Department of Agriculture reported that only 14% of the projected corn crop has been planted in Indiana, compared to 86% at this time last year.
Even with the current weather trend, Farm Bureau members who responded remain relatively positive that they’ll be able to plant a crop this year, according to the INFB survey. Prevented planting is an insurance tool farmers use if they are unable to plant a crop by a predetermined date. Farmers are covered for a certain percentage of the crop’s worth, depending on when they file the claim.
When asked during the week of May 13 if they were likely to make prevented planting claims through crop insurance, 70% of farmers who responded said that they were unlikely to take prevented planting measures.
“In farming, there are factors that are out of your control,” said Kron. “While the weather cannot be influenced, farmers can certainly express their concern about trade and tariff escalations with their representatives in Congress. Indiana Farm Bureau has been and will continue to connect with elected officials to discuss how the current trade environment is impacting agriculture. I would encourage farmers to do the same.”