Editor’s note: We reached out to Midwestern bankers to give us a more detailed review of 2019, predictions for 2020 and specifics on how the weather and trade war affected their ag banking customers. This is the third of four posts. See our previous installments on 2019 trends and weather impacts; up next, what lies ahead in 2020.
Do producers support the ongoing trade war?
Peg Scott, Union State Bank, Greenfield, Iowa,: “Of course, the tariffs have been a concern, but most farmers I talk to are supporting the tariffs. Their comments generally are that we’ve been taken advantage of as a country for a long time and it needs to be done. We need to get this straightened out so that we’re on a level playing field with other countries, particularly China. Our ag customers have gotten a subsidy last year and this year to make up for the depressed prices caused by this whole tariff issue. So, we feel like our customers are hanging in there, certainly not making a lot of money, but they’re able to hold it together.”
Grant Whaley, Farmers & Merchants Bank, Boswell, Ind.: “For the most part, I would say yes. My perception is that most farmers have seen how China has not been a trade partner that can be trusted and how that has impacted their bottom line in years past. They know that the issue needed to be addressed and farmers know that this will take time and that patience is required.”
Jeff Gruetzmacher, Royal Bank, Lancaster, Wis.: “The opinions I’ve heard are that it will take time to renegotiate these agreements, and that producers are ‘eagerly patient’— and hopeful that, in the long term, there will be significant benefits to waiting. On the flip side, the interim USDA trade relief that producers have received is certainly welcome, but only covers a small portion of the perceived loss due to the current trade impasse. Many have also expressed opinions that the USMCA [United States–Mexico–Canada Agreement] should be ratified by Congress as soon as possible.”
Brett Hanson, First Interstate Bank, New Underwood, S.D.: “We do not have large acreages of crop like soybeans that seem to have been hurt by the trade war. We are seeing some increased prices on parts and tires due to those issues. Producers out here are more split on how they feel about the trade issue, with many hoping that some old issues can be dealt with when new agreements are made.”
Peter Scheffert, Community Resource Bank, Northfield, Minn.: “Farmers seem to span the range in support of the trade war. There was initial support with producers seeing the need to fix some stuff with trade issues. However, as it has continued, they have moved to reluctant support or not supportive. The government payments have certainly taken some of the sting out of the trade war, but there is becoming a stronger sense that this is going to have some very long-term impacts on American agriculture. More so, they would like to see more decisions and action taken by the elected officials on a number of issues affecting agriculture versus all the fighting and inaction taking place. They may not like all the decisions, but it would at least get some things moving and help them know how to plan ahead better.”