US farmers could take a significant hit from trade war

[tulc]

https://www.cnbc.com/2018/07/05/us-farmers-could-take-a-significant-hit-from-trumps-tariffs.html

The Trump administration's tariffs, a 25 percent duty on $34 billion worth of Chinese goods, are set to take effect 12:01 a.m. EST on Friday. Beijing has said it would retaliate immediately with tariffs of its own.

That leaves U.S. farmers in the crossfire.

"Rural communities are dependent on agriculture. It’s their life blood," Casey Guernsey, a seventh-generation beef farmer in the Missouri-Kansas-Iowa area, told CNBC.


China's new tariffs will impact a number of American agricultural products, including soybeans, wheat, corn, cotton and pork, as well as U.S. autos.

Beijing's import levies could end up costing farmers in the state of Missouri as much as $138 million annually, said Guernsey, owner of CL Guernsey, a family farm. That includes the impact of lower prices for farm commodities and potential lost business due to new import duties

tulc(thought "all the winning" would look different then this)

 

[OldWiseGuy]

Thanks to machines, hybrids, and chemicals farmers are overproducing themselves out of business. We need more organic farms anyway. Maybe when these large farms go under they can be broken up into smaller holdings and the land restored.

 

[tulc]

Thanks to machines, hybrids, and chemicals farmers are overproducing themselves out of business. We need more organic farms anyway. Maybe when these large farms go under they can be broken up into smaller holdings and the land restored.

oddly enough I agree with that.
tulc(don't tell anyone though...nothing to see here, just move along)

 

[Douger]

Farmers find themselves caught between right leaning politicians wanting to take on the world with sanctions and tarriffs, and left leaning politicians who view farming activities negatively.

 

[Douger]

Thanks to machines, hybrids, and chemicals farmers are overproducing themselves out of business. We need more organic farms anyway. Maybe when these large farms go under they can be broken up into smaller holdings and the land restored.

Food is just way too cheap to support a healthy rural economy. We need many times the current number of farmers working small holdings, but it's hard to see how the economics would work as those small holdings would need to produce the big incomes that professionals expect to earn.
I think the majority of education should focus on teaching the natural cycles and webs that produce food and how we interact with them as humans.
That's what really matters. It's an education you can bet your life on, and the planet's.

 

[Yekcidmij]

https://www.cnbc.com/2018/07/05/us-farmers-could-take-a-significant-hit-from-trumps-tariffs.html

tulc(thought "all the winning" would look different then this)

Moody's note this morning counts farming equipment makers as well (think Deere, etc..) and sponsors of farm equipment Asset Backed Securities (as farm income goes down, it becomes more difficult for them to pay loans).

 

[OldWiseGuy]

The ag industry sees farmers as serfs whose duty is to secure loans and buy all their products then work themselves to death on their farms. The only wealth many farmers have after a lifetime of toil is the value of their land. Suicide is once again a troubling problem among American farmers due to the stress of low commodity prices and the associated stress. In my state hundreds of dairy farms throw in the towel every year. Soon there will be nothing but huge corporate farms and CAFO's (concentrated animal feeding operations).

 

[Yekcidmij]

The ag industry sees farmers as serfs whose duty is to secure loans and buy all their products then work themselves to death on their farms. The only wealth many farmers have after a lifetime of toil is the value of their land. Suicide is once again a troubling problem among American farmers due to the stress of low commodity prices and the associated stress. In my state hundreds of dairy farms throw in the towel every year. Soon there will be nothing but huge corporate farms and CAFO's (concentrated animal feeding operations).

The tariffs will be bad for dairy farmers too.

https://www.dairyherd.com/article/mexican-tariffs-could-devastate-us-dairy-export-sales

I'm not clear why Trump loyalists support these tariffs.

 

[OldWiseGuy]

The tariffs will be bad for dairy farmers too.

https://www.dairyherd.com/article/mexican-tariffs-could-devastate-us-dairy-export-sales

I'm not clear why Trump loyalists support these tariffs.

We want balanced trade. The accumulated deficits are largely responsible for our national debt. The growth in the debt can be traced back to the 1970's when our trade deficits began to rise precipitously, beginning of course with the OPEC oil embargo.

 

[ubicaritas]

Farmers find themselves caught between right leaning politicians wanting to take on the world with sanctions and tarriffs, and left leaning politicians who view farming activities negatively.

I don't know of any left-leaning politicians that view farming negatively. Perhaps only certain kinds of farming, but not farming in general.

 

[ubicaritas]

We want balanced trade. The accumulated deficits are largely responsible for our national debt. The growth in the debt can be traced back to the 1970's when our trade deficits began to rise precipitously, beginning of course with the OPEC oil embargo.

The national debt is not an absolute problem, that's one thing many conservative populists do not understand.

Debt and trade have positive aspects since they encourage international peace and cooperation indirectly. Global interdependency is only a bugaboo to people that do not really understand the world.

 

[Yekcidmij]

We want balanced trade.

Why don't you like capital surpluses? A trade deficit means there is a capital surplus. Why do you want to eliminate our capital surplus?

The accumulated deficits are largely responsible for our national debt.

I think You may be confusing a trade deficit with the national debt. They are not the same.

The growth in the debt can be traced back to the 1970's when our trade deficits began to rise precipitously, beginning of course with the OPEC oil embargo.

The federal debt has been rising since post WWII. And it's probably best to consider debt as a % of GDP as nominal debt doesn't really tell you anything. And it's not related to current account deficits. You could have a current account surplus and still run a financial deficit (see Japan).

https://fred.stlouisfed.org/series/GFDEBTN
https://fred.stlouisfed.org/series/GFDEGDQ188S

 

[OldWiseGuy]

Why don't you like capital surpluses? A trade deficit means there is a capital surplus. Why do you want to eliminate our capital surplus?

Any capital surplus is borrowed from the taxpayer.

I think You may be confusing a trade deficit with the national debt. They are not the same.

Capital losses through deficit trade ($600Billion +/- per year) are 'backfilled' by gov't borrowing, which is added to the national debt.

The federal debt has been rising since post WWII. And it's probably best to consider debt as a % of GDP as nominal debt doesn't really tell you anything. And it's not related to current account deficits. You could have a current account surplus and still run a financial deficit (see Japan).

https://fred.stlouisfed.org/series/GFDEBTN
https://fred.stlouisfed.org/series/GFDEGDQ188S

Debt is debt no matter how you parse it.

 

[Yekcidmij]

Any capital surplus is borrowed from the taxpayer.

Capital surpluses are simply the corollary to a trade deficit. They have nothing to do with gov't borrowing. I even gave you an example in the previous post: Japan.

National Balance of Payments are described by an accounting identity: Capital Account + Current Account == 0. If you have a current account deficit (ie, a trade deficit), then you necessarily have a capital account surplus.

It's my theory that Trump loyalists generally don't know or understand national accounts. I doubt they understand the difference between national debt and trade deficits or the relationship between current and capital accounts. So far my theory has held up pretty well.

Capital losses through deficit trade ($600Billion per year) are 'backfilled' by gov't borrowing, which is added to the national debt.

That's not how it works. If the US has a trade deficit, then it must have a capital surplus, and there is no relationship to gov't borrowing (see Japan...as I already pointed out). It's a simple accounting identity. If the US is a net importer goods of goods, then it is a net exporter of capital.

https://eml.berkeley.edu//~obstfeld/182_sp06/chapter12.pdf
http://web.uconn.edu/cunningham/econ243/lecture01.ppt
https://www.imf.org/external/region/tlm/rr/pdf/fpp5.pdf
....

Debt is debt no matter how you hide it.

Trade deficits are not the same as national debt.

 

[OldWiseGuy]

Capital surpluses are simply the corollary to a trade deficit. They have nothing to do with gov't borrowing. I even gave you an example in the previous post: Japan.

National Balance of Payments are described by an accounting identity: Capital Account + Current Account == 0. If you have a current account deficit (ie, a trade deficit), then you necessarily have a capital account surplus.

It's my theory that Trump loyalists generally don't know or understand national accounts. I doubt they understand the difference between national debt and trade deficits or the relationship between current and capital accounts. So far my theory has held up pretty well.



That's not how it works. If the US has a trade deficit, then it must have a capital surplus, and there is no relationship to gov't borrowing (see Japan...as I already pointed out). It's a simple accounting identity. If the US is a net importer goods of goods, then it is a net exporter of capital.

https://eml.berkeley.edu//~obstfeld/182_sp06/chapter12.pdf
http://web.uconn.edu/cunningham/econ243/lecture01.ppt
https://www.imf.org/external/region/tlm/rr/pdf/fpp5.pdf
....



Trade deficits are not the same as national debt.

How can you have a "capital surplus" and be a "net exporter of capital" at the same time?

Debt is caused by borrowing.

Borrowing is caused by a shortage of needed capital.

Trade deficits remove capital from the domestic economy, and thus cause the need for borrowing, thus the debt.

Do the math. If $600billion in cash leaves the economy that means a shortfall of about the same amount in government tax revenues (given a 'velocity' of 5X and taxes of 20 percent). This needed money must be borrowed every year to fund government programs, thus the 'national' debt.

Many economists are unable to connect the dots. Curious.

 

[oak1683]

https://www.cnbc.com/2018/07/05/us-farmers-could-take-a-significant-hit-from-trumps-tariffs.html

tulc(thought "all the winning" would look different then this)

cnbc? lol. Look, all one has to do to learn this story is a big bunch of B.S. is to do a google search for crop losses. Many, many, countries who are putting on a good show in the "tarrif war" have 30- 70% crop losses. So how are they going to eat? Seems like food prices are going up instead of down. Like I said. CNBC is full of brown smelly stuff.

 

[oak1683]

http://iceagefarmer.com/map/

Handy global map with crop losses. So, what you have to ask yourself is will farmers get more or less money for what crops they do harvest? Also note that so far, the US has been lucky and may have enough.

 

[oak1683]

Leverage. Trump's negotiations are all about leverage. We have food. You are starving. Drop your tariffs or face a revolt from starving people.

 

[oak1683]

Like him or hate him it is not wise to bet against him.

 

[tulc]

Like him or hate him it is not wise to bet against him.

Actually betting against him seems like a good idea. It's working FOR him that seems to be the problem.
tulc(is just sayn')