Farmers Welcome Trade Truce, Hope for More

Farmers and agricultural groups welcomed the U.S.-China trade truce but many said they still need a comprehensive agreement to restore large-scale exports of U.S. crops and meat and lift the fragile farm economy.

Trade tensions between the world's two largest economies have weighed heavily on the U.S. agricultural sector, which has been in a multiyear slump, marked by low incomes and rising bankruptcies. Over the past year, retaliatory Chinese tariffs on U.S. farm goods ranging from soybeans to pork to cheese have dampened U.S. exports and pressured prices. Historic wet weather across the Farm Belt this spring added new woes, swamping fields and delaying planting over millions of acres.

President Trump said after meeting with his Chinese counterpart Xi Jinping that China will start buying large amounts of U.S. farm products.

"It's definitely encouraging because they're the biggest market opportunity in the world," said Jon White, a hog farmer in Jones, Mich., who sells 70,000 pigs a year. Still, he said, "we'll believe it when it actually happens."

Prospects have improved recently for U.S. hog farmers. Their exports were hurt last year as China and Mexico hiked tariffs on U.S. pork. Mexico, the biggest importer of U.S. pork, dropped its tariffs in May, following the U.S. withdrawal of tariffs on Mexican steel and aluminum.

Meanwhile, disease has led to mounting hog deaths on farms across Asia and is expected to prompt a huge jump in demand for pork imports there. The result is Iowa hog producers have gone from losing an average $11.44 on each hog sold in February to earning a profit of $41.76 on each one sold in May, according to estimates from Iowa State University.

Jim Monroe, a spokesman for the National Pork Producers Council, urged officials to keep working toward removing China's 50% tariffs against U.S. pork. He welcomed the U.S.-China agreement.

"Any progress toward resolving a trade dispute that is currently preventing U.S. pork from capitalizing on a historic sales opportunity in China is welcome," he said.

The extraordinarily wet spring in the U.S. poses a threat to this year's corn and soybean harvest and has pushed up crop prices in recent weeks. But U.S. farmers over the long term need certainty that their biggest export markets, like China and Mexico, will remain reliable buyers, said Doug Martin, who raises corn and soybeans near Mount Pulaski, Ill.

"Something's gotta get done," said Mr. Martin, who dug mud out of his machinery as he struggled to get his seeds planted earlier this year. "Anything they can do to get that market going again will be good for us."

The Trump administration earlier this year pledged $16 billion to help farmers hit by the trade conflict with China, echoing a similar $12 billion program enacted last year.

Many U.S. farmers have said they prefer free trade and access to export markets over a bailout from the federal government. President Trump has acknowledged farmers' patience during the trade dispute, frequently referring to them as patriots.

In a June survey of 1,129 farmers by the Farm Journal, 74% of respondents either strongly or somewhat approved of President Trump's performance. That was little changed from a similar survey in December.

Another recent survey, however, shows pessimism about the agricultural economy is growing among farmers. In May, farmers' perceptions of the economy fell to the lowest level since October 2016, according a monthly survey of 400 farmers conducted by Purdue University and CME Group.

  (END) Dow Jones Newswires
  06-29-19 1416ET
  Copyright (c) 2019 Dow Jones & Company, Inc.

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