Xinhua Headlines: American farmers hope for better 2020 as trade tensions ease
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E-mail Xinhua, October 25, 2019
by Xinhua writers Yang Shilong, Chang Yuan, Pan Lijun
ATLANTIC, the United States, Oct. 25 (Xinhua) -- Following progress in the new round of trade talks between Washington and Beijing, farmers in the U.S. midwestern state of Iowa, the country's leading producer of corn and soybean, are hopeful that trade will be back to normal soon and that 2020 will be a better year.
EXCITED & OPTIMISTIC
"(With) trade with China hopefully coming back quickly, the prices should improve. And that makes a farmer smile anytime that he can," Bill Pellett, 71, told Xinhua in a recent interview while overlooking a combine harvester stripping the soybeans from the pods beside his farm in Atlantic, a small city in Iowa.
The fifth-generation farmer said he felt encouraged by the news that the U.S.-China high-level economic and trade consultations on Oct. 10-11 in Washington D.C. concluded with progress in areas including agriculture, expansion of trade cooperation and dispute settlement.
The markets indicated that "it is a good deal," he said. "So we will make sure it comes to fruition for both countries, because it is important to all of us. It's beneficial for both of us, because that's what the people need ... That is really important to our world," Pellett said.
Kelly D. Cunningham, 52, a dairy farmer in rural Cass County of Iowa, agreed.
"We are very hopeful that the recent step forward will translate into actual movement of products and ships being loaded and unloaded and products leaving the United States," said Cunningham, managing partner of Milk Unlimited Dairy Farms, adding that hopefully, the two sides "can have things worked out in a year or two."
"We're excited and optimistic to be resuming a more normalized and hopefully an increased amount of export trade with our partners in China," Grant Kimberley, marketing director of the Iowa Soybean Association, told Xinhua at his farm near Des Moines, the state capital.
CHINA MARKET CRUCIAL
Since 2018, the U.S. administration has imposed several rounds of additional tariffs on Chinese imports, initiating a prolonged trade dispute between the world's two largest economies.
As countermeasures, China levied tariffs on a list of items imported from the United States, including some agricultural products like dairy.
In the 2017 fiscal year, American farmers and ranchers exported about 22 billion U.S. dollars' worth of agricultural products to China.
The agricultural exports to China will fall to just 6.5 billion dollars in the 2019 fiscal year, according to projections by the U.S. Department of Agriculture.
The year 2019 has been a "challenging year" for soybean farmers, said Kimberley.
"Uncertainty has been the name of the game this year because of all the twists and turns, and almost like watching a movie of having the various plot points change in direction," he said.
"U.S. soybean exports decline this year, year over year, probably about 20 or so percent in this period of time. Now our exports to China have declined even more than that," he said, adding that the current price of soybeans is "getting better" but "not quite where we need to be for a break-even price."
The Iowa soybean farmers have offset some of that loss by increasing their exports to other countries, Kimberley said, "but China certainly is one of the largest consumers of soybeans in the world, and so it's hard to offset all of that."
The financial aid programs set up by the U.S. government can only help farmers pay some bills "in the short term," he said. "But (in the) long term we want to see the markets resume on a normal basis because that's what's best for farmers here and best for consumers in China."
"We do not like to have to depend on our governments for profits and losses," Pellett said, noting that farmers prefer trade to aid.
Cunningham, who entered the business in 1998, said that sustainable trade with China is crucial to the future of U.S. dairy too.
"About 15 percent of our production goes overseas," he said, adding that the nation aims to export 20 percent of its dairy products to overseas markets.
Mexico was the top importer of U.S. dairy products in 2018. China, the third-largest single-country market for U.S. dairy in the same year, has a huge long-range upside as it is expected to become the world's largest dairy marketplace within the next few years.
WORKING TOGETHER FOR WIN-WIN
"China is a critical trading partner for Iowa farmers. The ongoing trade talks ... are encouraging," Mike Naig, Iowa's secretary of agriculture, told Xinhua via email.
"It signals that both recognize the value of our agricultural export market," Naig said. "I'm hopeful we can reach a long-term trade agreement to provide stability to both our countries and economies."
Kimberley also expressed the hope that once the two countries resolve their trade differences, both sides would have an even stronger economic and trade relationship down the road.
"The bottom line is conversations and engagement need to continue no matter what kind of ups and downs we see," he said.
Pellett said it would be "very difficult" to decouple the U.S. and China economies. "We want to remain as trade partners."
"When you have the two largest economies in the world work together, we can do great things," he said. "We cannot let politics get in the way of our friendship."
The veteran farmer said both sides should respect each other and "we cannot impose what we do on anyone," and "it is good to talk and understand the basic needs of each of us in the world (and) move forward from that."
With the state-of-the-art facility to milk dozens of cows efficiently and to produce around 34,000 gallons (about 128,700 liters) of milk for the marketplace per day, Cunningham managed to sustain his business amid market volatility.
However, the 12 months ending in September turned out to be one of the least profitable years for his farm in the past few years, he said.
Cunningham worried that the price would be further dragged down if the stockpiles continue to accumulate.
"We need China, we need that international market to make sure prices stay good and we're able to keep producing like we are," Cunningham said. Enditem
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