Ever since voting for Trump, farmers have gone further into debt:
Non-real estate farm lending continued to increase at a moderate pace in the second quarter, according to the National Survey of Terms of Lending to Farmers. The volume of loans increased 11 percent compared with last year, the fastest pace of growth in the second quarter since 2011. Operating loans continued to comprise the majority of non-real estate farm lending and increased more than 16 percent (Chart 1). The second quarter also marked the ninth straight quarter of a year-over-year increase in total non-real estate loan volumes and during these nine quarters, the annual pace of growth has averaged 14 percent [Nathan Kauffman and Ty Kreitman, “Large Loans Drive Further Increases in Farm Lending,” Federal Reserve Bank of Kansas: Ag Finance Databook, 2019.07.18].
Notice that the Kansas City Fed isn’t just counting dollar amounts; they’re adjusting for inflation.
Farmers are borrowing significantly more for feeder livestock and operating expenses:
Farmers sinking into the red get no relief from the Trump Administration yesterday, which, in vowing to expand the trade war and more taxes on consumers, sent ag markets down:
A fresh salvo from Donald Trump in the U.S.-China trade war has roiled agriculture markets, deepening weekly losses and damping chances of any fresh Chinese purchases of American farm products.
While crop futures recovered some poise on Friday, soybeans are still on track for their worst weekly loss since early May and hogs are heading for their biggest weekly plunge in a year.
…China had earlier waived retaliatory tariffs on some U.S. farm imports in apparent preparation for new purchases, but there has been no confirmation of fresh deals, and Trump’s latest move may well mean they are now less likely. Adding to the trade pain was news Thursday that China had made its biggest ever cancellation of American pork [“Crop Markets Deepen Weely Losses as Trump Escalates Trade War,” Bloomberg via Yahoo, 2019.08.02].
If the Trump Administration thinks this new tariff threat will pressure China into buying more American ag products, it is likely mistaken:
The Eurasia Group analysts said it is possible that Thursday’s tariff threat is meant to spur China into buying more American agricultural products but, they added, Beijing is unlikely to respond the way Trump hopes. It would be “extremely embarrassing for China to step up imports from the U.S. under the threat of blackmail,” they wrote.
Tapas Strickland, director of economics and markets at National Australia Bank, also said that it was impossible for China to concede without losing face.
“It goes against China’s core demands of sincerity and the removal of existing tariffs,” he wrote in a Friday morning note, adding it is possible that Beijing “will retaliate with an intensification of non-tariff barriers, as well as further Chinese stimulus to ward off headwinds” [Saheli Roy Choudhury, “Trump’s New Tariff’s Show He’s Reading China All Wrong, Risk Consultancy Warns,” CNBC, 2019.08.02].
Farmers aren’t like the federal government: they can’t just raise their debt ceiling and borrow forever without consequences. But Donald Trump will continue to ignore their plight and distract them with racist Twitter insults and welfare checks, scratching farmers’ id to make their legs twitch until the bank forecloses.