Missouri farmers wait for US, China to find common ground | St. Louis Public Radio

Missouri farmers wait for US, China to find common ground

Apr 10, 2018

Denny Mertz lost $12,000 on his soybeans last week when China proposed tariffs on U.S. agricultural products.

The Chesterfield resident grows soybeans and corn on his 500-acre farm in Elsberry. He said he'll be able to weather the loss, as he owns his land and doesn't have much overhead. Yet Mertz worries that younger farmers could take a significant hit if China and the U.S. don't settle their trade differences, especially because many don't own their land.

"They do not have a lot of equity built up and there's not much reserves to fall back on," he said.

He's not the only one who's worried.

The Missouri Farm Bureau describes the potential trade war with China as a situation that could "cripple agriculture for a generation." In part that's because the stand-off follows a significant price drop for commodities over the last five years, leading to lower pay for farmers.

"The forecast income for this year, before these tariffs were announced, was the lowest farm income in 12 years," said Missouri Farm Bureau President Blake Hurst. "So there's already some stress here in farm country."

Hurst grows corn and soybeans at a farm in Atchison County in northwest Missouri and is convinced China's financial penalties could be devastating for farmers throughout the state if they take effect. But he thinks something needs to be done to deal with the Asian nation's approach to trade.

"The concern about China's treatment of intellectual property is legitimate," he said in a recent phone interview. "So, hopefully, that's what negotiations will concentrate on."

There have been talks between the world's largest economies after China proposed tariffs on agricultural and other U.S. imports in retaliation for the Trump administration's decision to impose fees on Chinese steel and aluminum.

Lesson learned

Denny Mertz has been farming since 1978 and even though the China dispute has the potential to be devastating for the U.S. agricultural sector, he doesn't expect it to end up as severe as in the early 1980s.

Many young farmers in that era over-extended themselves financially and were brought down because of high interest rates. Mertz and his wife had second jobs to get through those years, but they learned lessons that could help if the Chinese tariffs go into effect and lead to a further decline in commodity prices and income.

“I have always been a very conservative and cautious investor and same in farming too,” he said. “If I don’t have the money for a new piece of equipment you know that I will repair my old {equipment}, or buy a piece that isn’t new, to conserve.”

While he said he's fairly well-insulated, he doesn't want to take another hit of $12,000 a day.

"You don't like to do that," he said.

Follow Wayne on Twitter: @WayneRadio