LINCOLN, Neb. - Retaliatory tariffs in 2019 have cost Nebraska agricultural producers $943 million, on top of estimated losses the year before of between $695 million and $1.026 billion, an analysis from the Nebraska Farm Bureau says.
Jay Rempe, Nebraska Farm Bureau senior economist, conducted the analysis as a way to provide an assessment of losses independent of Market Facilitation Program assistance.
Since taking office in 2017, President Donald Trump has increased tariffs against numerous trade partners, and the U.S. has faced retaliatory tariffs in return. According to an Aug. 29 report from the American Action Forum - the policy arm of the American Action Network, a center-right “action tank” - tariffs and retaliatory tariffs “threaten $660 billion of traded goods annually.”
To make up for the trade war-related losses, the U.S. Department of Agriculture in 2018 and 2019 instituted Market Facilitation Program payments to agricultural producers. Payments for the 2019 program began Aug. 19, and as of Aug. 26, the Farm Service Agency reported having paid $1.488 billion. The top five states were Iowa, Illinois, Minnesota, Indiana and Kansas.
According to the Nebraska Farm Bureau, Rempe’s analysis used USDA data on how it calculated the 2019 MFP payments to estimate tariff-related losses to the state’s agricultural producers. Nebraska’s soybean and corn growers are expected to lose $588.5 million and $251.3 million, respectively, this year due to retaliatory tariffs, the analysis says. Also expected to be hit hard are pork producers ($39.6 million in losses), sorghum growers ($26.2 million), wheat growers ($23.1 million), alfalfa growers ($9.6 million), dairy producers ($2.9 million) and dry bean growers ($2 million).
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The analysis did not include losses of beef, hides and skins, ethanol and other processing byproducts.
“Counting tariff losses for beef, ethanol, and other byproducts could easily push Nebraska farmers and ranchers’ collective losses from trade tariffs over the $1 billion mark,” Rempe said in a statement.
In addition to ag losses, the analysis also pegged total income loss from retaliatory tariffs to Nebraska’s economy at $1.16 billion.
“This analysis shows how important trade is for Nebraska farmers, ranchers, rural communities, and our state. It’s vital we eliminate trade barriers and secure trade deals that allow farmers and ranchers to work freely to capture, develop, and grow international markets. Congressional passage of the United States-Mexico-Canada Agreement, securing a bilateral deal with Japan, and progress on the China front would be very good places to start,” said Steve Nelson, Nebraska Farm Bureau president.
The Nebraska Farm Bureau analysis was released on Sept. 3, just days after the USDA’s Economic Research Service released its August 2019 Farm Income Forecast showing net farm income is forecast to increase in 2019 by $4 billion to $88 billion. While the number, if realized, would still be below the inflation-adjusted net farm income average from 2000 to 2018, it would be the third consecutive year of growth.
However, the USDA report noted that cash receipts in 2019 are forecast to decrease by $2.4 billion overall. The increase in net farm income is predicted to come from direct farm payments, mostly due to MFP payments. The USDA report estimates direct payments will increase by $5.8 billion, or 42.5%, to $19.5 billion, nationwide.
“We appreciate the administration’s ongoing support for America’s farm and ranch families through MFP assistance, but this analysis shows just how critical it is that we resolve the prolonged trade conflicts that have created the tariff pressures,” Steve Nelson, Nebraska Farm Bureau president, said Tuesday, Sept. 3.
To read the full Nebraska Farm Bureau Analysis, visit https://nefb.org .
