Hurt In The Heartland
From meat to milk and the vegetables in between, more American farmers filed for bankruptcy last year than during the financial crisis a decade ago.
Why Now?
a Ia ve been through several dips in 40 years. This one here is gonna kick my butt.a
Why Now?
- Oversupply of crops (at home & overseas) fuels lower prices.
- High Debt – Farmers currently carrying the highest debt in 4 decades (in part because of borrowing to cover several years of low crop prices).
- Trade: Tariffs (or taxes) on American grown crops exported to China or Mexico hurts farmers on top of the depressed prices.
a We thought 2019 would be the year things turned around. Then the trade dispute happened and that really put a damper on things.a
Why It Matters:
Your Kitchen Table: “…bankruptcies are climbing across swaths of the Midwest that produce much of the nationa s grain and meat.” (WSJ)
Your Tax Dollars: Pres. Trump created a $12B fund to help subsidize farmers impacted by trade disputes. Only a portion of the funds have been accessed.
The downward trend in prices is predicted to continue for U.S. farmers. U.S. Treasury Sec. Mnuchin is in China today, where he will continue trade talks this week ahead of the March 2nd deal deadline for the two sides to set new terms or continue the trade war.
Sources
- a This One Here Is Gonna Kick My Butta a Farm Belt Bankruptcies Are Soaring:
https://www.wsj.com/articles/this-one-here-is-gonna-kick-my-buttfarm-belt-bankruptcies-are-soaring-11549468759 - a Big crops, low prices’ for a long time ahead, says CBO:
https://www.agriculture.com/news/crops/big-crops-low-prices-for-a-long-time-ahead-says-cbo - Ag economists: no huge improvement in farm income predicted for 2019:
https://www.wisfarmer.com/story/news/2019/02/07/no-huge-improvement-farm-income-predicted-2019/2783032002/ - Farm bankruptcies are on the rise, and bankers worry that far more are on the way (Nov. 2018):
http://www.startribune.com/farm-bankruptcies-are-on-the-rise-and-bankers-worry-that-far-more-are-on-the-way/501157191/ - A $12 Billion Program to Help Farmers Stung by Trumpa s Trade War Has Aided Few (Nov. 2018):
https://www.nytimes.com/2018/11/19/us/politics/farming-trump-trade-war.html