JANESVILLE - The fallout of the ongoing trade war between the U.S. and China is having an impact on farmers across the country, including here in Rock County as a cloud of uncertainty from retaliatory tariffs weighs down crop prices.
"The atmosphere from everyone I've talked to is that there are a lot of people who are just getting scared," said Doug Rebout, a Janesville farmer and president of the Wisconsin Corn Growers Association. "The uncertainty of not knowing what is going to happen is the worst part."
Added to the uncertainty is the difficult run of weather during this wet spring, which has delayed farming operations and could adversely impact yields, lowering the volume of crops farmers have to sell.
Rebout oversees operations at Roger Rebout & Sons Farm, with the farm home to 2,500 acres of corn, 1,300 acres of soybeans and around 350 dairy cows and beef cattle.
According to a report by the Brookings Institution, rural areas and smaller communities have been most impacted by the retaliatory tariffs from China and other countries.
All the uncertainty has stunted crop prices.
As of 7 a.m. on Wednesday, corn is worth $3.90 per bushel compared to a market year average of $6.89 in 2012. Soybeans haven't fared well either, with a bushel of soybeans worth $8.25 as of 7 a.m. Wednesday compared to a market year average of $14.40 in 2012. Earlier this month, Rebout said he's been worried by corn prices ($3.61/bushel on May 9) compared to the cost of cultivating a bushel ($3.85) on his farm.
Last year, as part of subsidies approved by President Donald Trump, the administration paid $1.65 per bushel for soybeans and 1 cent per bushel for corn. According to an article published Tuesday by Bloomberg in which unnamed sources were cited, the Trump administration is considering a second round of aid payments to farmers that could be announced as soon as tomorrow, the article said. According to sources cited in the article, the plan could cost $15 billion and include among other payments $2 per bushel for soybeans.
"Farms try to build up equity, and right now that's getting eaten away because of these low prices," Rebout said. "If this was a short-term thing, then you can deal with it. We are used to dealing with unpredictable markets and weather. We are sitting here - in the second year of this - not seeing much of an end to it because they are always looking at more tariffs. If you could see an end to it, we'd be fine with it. A lot of people aren't seeing an end to it and it's getting very concerning."
Although every farm is different, Rebout said he believed the impact felt by farmers could be seen across the state.
"We are proud of the fact that we can feed the world, but if we can't get that product out to the world what good is it?" Rebout said. "At the end of the day we are a business. As farmers, we've become good about re-investing. We put the money back out into our communities and it's not just us it's hurting. It's hurting our communities."
As president of the Wisconsin Corn Growers Association, Rebout is set to travel to Washington, D.C. in July to voice concerns facing Wisconsin farmers alongside other association members. Rebout said he's worried about what would happen to U.S. trade relationships if the international tit-for-tat continues.
"When we talk about trade, one thing as farmers we try to stress is we have worked many years to build up these trade relations with other countries," Rebout said. "As farmers, we have invested a lot of money in building those relationships. The longer these trade talks go on, and China starts buying from other countries, even if we get a trade deal worked out, they aren't just going to flip and come back to us. So we've potentially lost those markets and we might have to start at ground zero again."
Sen. Tammy Baldwin, D-Wis., said she supported "getting tough on China" through a bill with Sen. Marco Rubio, R-Fla., that would look to enforce fair trade policies against China.
"President Trump's trade war with China is hurting Wisconsin's economy," Baldwin said. "In particular, China has imposed tariffs on Wisconsin dairy, cranberries and ginseng that have hurt our agriculture economy at a particularly tough time. The fact is the President hasn't delivered results for farmers. He hasn't produced better trade deals, he has only produced trade wars that have hurt our farmers. Our farmers need a better trade deal with China, not a trade war."
In a statement, Sen. Ron Johnson said he was "well aware of the short-term pain being experienced by Wisconsin farmers and Wisconsin manufacturers." In the past Johnson, R-Wis., has been critical of trade policies of the Trump administration, but said he was "painfully aware of how China has abused the world trading system."
"I've been pretty amazed at how patient farmers and manufacturers have been in terms of supporting the president in trying to accomplish his goal of getting China to stop stealing our stuff, and also start complying with World Trade Organization rules," Johnson said. "...I'm keeping my fingers crossed that China will realize it's in their best interest to start behaving when it comes to the world trading organizations."
Rep. Mark Pocan, D-Madison, could not be reached for comment Tuesday. In an op-ed published in the Wisconsin State Journal on May 17, Pocan said the he felt targeted tariffs were always an option, "but in the case of President Trump's trade war with China, it's clear his administration has no coherent policy."
"Rather than an ineffective bailout program, what Wisconsin farmers really need is the president to end his trade war and work with Democrats on a real trade policy and efforts to strengthen the rural economy," Pocan wrote. "While the president has claimed that the trade war is meant to help American workers, the effects show that it is just the latest attack on the very Americans he claims to support. The president must do better for rural communities and should work to develop a trade agenda that will truly support our farmers and our workers, not create long-lasting, irreversible damage."