Trump Trade Policy Bad for Already-Limping South Dakota Agriculture

If it is at all advisable to take any of Trump’s plaything words as vows of real policy, we can count on his threats of trade wars with Mexico and China to crush South Dakota agriculture, says John Tsitrian:

Starting a trade war just as South Dakota farmers are experiencing their lowest prices in a decade is senseless and self-punitive.  Fortune magazine, which knows something about how global business gets done, says of Trump’s plan, “it would likely expose the largest U.S. export sectors to steep duties, including aircraft, semiconductors, corn and soybeans (emphasis mine).”  Can you imagine a Chinese grain buyer even considering buying heavily tariffed American commodities in a world where everyone else is scrambling to sell their ultra-cheap products unburdened by American duties?  I can . . . and I just don’t even want to think about it [John Tsitrian, “Looks Like SD’s Ag Economy Is in for a Tough Year. A Trump Win Will Only Make It Tougher,” The Constant Commoner, 2016.04.17].

According to SDSU Extension, agriculture dropped last year to 7% of South Dakota GDP, down from above 10% in the five preceding years. Farm earnings dropped from 6.9% of state personal income in 2014 to 3.0% in 2015. According to Will Walters of the South Dakota Center for Farm/Ranch Management at Mitchell Technical Institute, average profit per farm in 2015 was $38,898, down from $168,361 in 2014 and a five-year average of $162,915.

But how many Presidential candidates do you hear talking about South Dakota agriculture, or any part of American food policy? Farmers, if the primary season stays hot, bring your questions to the Trump/Cruz/Kasich/Clinton/Sanders appearances in our fair state, and demand some straight answers.

16 Responses to Trump Trade Policy Bad for Already-Limping South Dakota Agriculture

  1. Paul Seamans

    Farmers are not united on trade policy such as NAFTA and TPP. The corn growers association, National Cattleman’s and Beef Association, and Farm Bureau are for TPP. The Farmers Union, the SD Stockgrowers, and R-CALF are against it.

  2. mike from iowa

    Drumpf is dangerous because he is an ego-maniac. The first hint of disrespect and he goes full nukular. He will make dumbass dubya look statesmanlike.

  3. John Tsitrian

    All the mainstream ag organizations are for these policies, Mr. Seamans. SD ag exports amounted to about $1 billion in 2000 and grew to about $4 billion in 2015. The opening of overseas markets has been a boon to farmers everywhere. Could you imagine what would happen if the United States had to consume what our farmers produce? FU has a tiny fraction of the membership that Farm Bureau, which strongly endorses TPP, does–nothing against them, but FU’s 200k members nationwide contrasts against 6 million Farm Bureau members, so to say that farmers are divided is accurate, but misses much contextually. I’d say 6 million pro-TPP farmers vs. 200 thousand anti-TPP farmers supports the view that farmers are overwhelmingly supportive of TPP. Similarly, during my cattle-feeding days back in the ’90s, I could see that cow-calf operators represent a small segment of the livestock production industry, which is overwhelmingly supportive of TPP. Calf producers have enjoyed a surge in prices since 2000, which is the effect of strong cattle prices brought on by the growth in export markets for American meat. SDSGA and R-Calf are concerned about competing against Mexican and Canadian calves, with good reason, but their tepid reactions to the loss of COOL (Country-of-origin-labeling) last December suggests to me that their respective institutional positions against trade agreements have lost much of their potency due to the surge in prices created by increased foreign demand for beef. Trade is a two-way street, and the increased liquidity created by the dropping of barriers makes for a much busier and lucrative highway in both directions.

  4. The TPP is not good for the United States. NAFTA was bad and ugly, the TPP will take over from that raw deal and leave South Dakota AG holding the feces. South Dakota already is getting the distinction of being the playground for a nuke dump with tar sand oil as the topping. TPP will do one thing for South Dakota producers and that will be to finally figure a way to buy them out cheap. When China purchased Smithfield, that was the bell that should be ringing in our melons. Face it, all they want is the production of meat for cheap and let us clean up the mess. Trump is a pain, but he is right on this trade agreement.

  5. Paul Seamans

    Mr. Tsitrian, comparing Farm Bureau membership to Farmers Union membership is a case of apples to oranges. Anybody who buys Farm Bureau insurance becomes a member. I think of Farm Bureau as an insurance company more than a farm organization.

    As for the SD Stockgrowers and R-CALF I look at them as being organizations who are supporter of ranchers while I view NCBA as being a big supporter of the big packers.

    For farmers to back TPP simply because it is in their financial interest is short sighted. As TransCanada has already shown with their $15 billion lawsuit against the US Government under NAFTA rules, the TPP will also allow foreign corporations to sue for perceived losses of future profits.

    I make these statements as a rancher/farmer but I think that I am able to also look at the larger picture than just my own self interests.

  6. bret clanton

    Are you a little behind on your news Mr. Tsitrian ? Perhaps using your export data you could explain the current cattle market collapse to me. And by the way unless you actually drove the feed truck or rode the pens you are an investor not a cattle feeder.
    Farm Bureau sells insurance and claims everyone they sell a policy to as a member. NCBA claims everyone in their affiliated organizations as members which is not true.

  7. John Tsitrian

    Mr. Seamans, that lawsuit thing is a straw man. The U.S. has won 12 out of 12 of those suits because the plaintiffs have to prove that actions were taken because of their foreign status. Obama’s rejection of KXL was about environmental and economic concerns that had nothing to do with Transcanada’s home country being Canada. Jerry, here’s a list of American enterprises owned by foreigners: Budweiser, Alka-Seltzer, Good Humor, 7-11, Gerber Foods, Firestone, John Hancock, Frigidaire, Holiday Inn. I could probably find more. Japanese firms own 7-11 and Firestone, the rest are owned by Canadians and Europeans. Are you concerned about foreign ownership of these companies, four of which make products that we ingest? I can’t believe that it’s a “yellow peril” mentality that makes you concerned about Chinese ownership of an American food processor.

  8. Paul Seamans

    Mr Tsitrian, if the ability of foreign corporations to sue a country is of no concern, as you seem to believe, then maybe that provision should be deleted. A lot of the opposition to TPP is because of that clause.

  9. John Tsitrian

    Mr. Clanton, “collapse” is relative. Live cattle at CME are 130, down from 170. In 2009 they were at less than 90. This is indeed a selloff consistent with the volatile nature of cattle markets and the “cattle cycle” itself. The structural change in the market since the big openings in foreign trade came about (I remember trading live cattle in the 50s and 60s during the late 90s) has been historic. Cattle traders are among the most enthusiastic supporters of TPP, and with good reason. Mr. Seamans, that provision should not be deleted because it does protect signees from being discriminated against on the basis of their national status, which of course they’re required to prove.

  10. There is a “yellow peril” though, and it ain’t folks from China. It is the what we are gonna have to clean up here in our creeks and rivers from the pollution of raising confinement hogs and cattle for markets other than ours. We pay the cost of market driven feeding programs for them (cheap) while they are immune to the high cost of clean up that we taxpayers will have to pay. Corn will stay cheap until producers figure out they need to put half their ground in fallow, while collecting for the soil bank. BTW, best program evah.

    When you and your bride move your residence a mile or so from one of these livestock confinement areas and then take a look at what kind of pollution you are left with, get back to me. In the meantime, I will wonder how the NAFTA is gonna fix our roads and our old leaky existing pipelines. When will NAFTA fix the bridges they beat up with the heavy long haul trucks that are just getting bigger. I will also wonder why you do not have guests at your new digs for outdoor patio meals. Repeal NAFTA, CAFTA for fair trade with fair wages. TPP is not in the best interests for climate change nor is it for the betterment of all instead of that fat cats.

  11. John Tsitrian

    bret: Oops. 130 is where I shorted ’em. Better call my broker. J/K. Thanks for the update. Jerry: The Smithfield deal occurred in ’13. When the horror show results I’m sure you’ll get back to me. Memo to all: take the last words.

  12. The horror show started long before 2013 as you can take a look at the history of the TPP, it will only get worse. We do have a track record to see regarding NAFTA as to how things work for the United States in trade deals. Corporate America does just swell, while main street gets boarded up. Of course, there is nothing to read about the details of the TPP as they are super secret.

  13. Paul Seamans

    Mr Tsitrian, I agree that the US Government has never lost a lawsuit under NAFTA. This has not been the case with the smaller, less developed countries. Even the threat of a lawsuit from a large foreign corporation will cause these countries to fold their hand. They do not have the resources to fight these corporations.

    I do not know who asked for the provision that allows these lawsuits of a sovereign nation by a foreign corporation. These negotiations were held under the strictest secrecy. However, around 600 large corporations were parties at the TPP meetings. I suspect that the small countries that are signee’s did not ask for the provision to protect their nations corporations. Rather I feel that the corporations that were parties at the negotiations wanted it as a means of intimidating these smaller countries.

  14. Why Trump’s words resonate with those other than the corporate elites is because he is speaking to what the 99% are already clear on, the fix is in and we are tired of the same old screwing we have gotten from trade deals. Each trade deal that the US has been a disaster for main street and a boom for Wall Street. Sanders and Trump understand that the direction we want is the economy to be fixed. The TPP is most certainly not the way to go and that is why they keep it secret from us. If it were such a great deal, where are the details?

  15. As a farmer, I don’t think the potential positive short term impact on some ag commodity prices outweighs the negatives here. TPP amounts to international government for the corporations by the corporations. TPP will also allow said corporations to subvert US sovereign law in international courts if a law or regulation we pass is a detriment to the international corporations revenue.