Since 1980 when he began farming in Illinois, Brent Scholl’s mornings have consisted of a similar routine … waking early to head out to one of several buildings to check in on hundreds of his pigs.
“Every eight weeks, we get 1,100 pigs delivered to us,” Scholl told VOA while tending to a feeding system for his hogs, which he raises for several months before sending them to market. “In a year’s time, we sell over 6,000 pigs.”
It’s a costly and labor intensive – but sometimes profitable – process, which Scholl attributes to increased foreign demand for pork.
“Every fourth hog of mine goes overseas somewhere,” he said. “So that’s 25 to 28 percent of what I am making coming from foreign dollars.”
Foreign dollars at risk if China’s proposed 25 percent tariff on U.S. pork products – a response to U.S. tariffs on Chinese aluminum and steel – is implemented later this year.
“If that all goes away it’s a losing business,” Scholl said.
Small profit margin
The increasing trade tension between the United States and China has rattled farmers in the American heartland, where many of the products on which China seeks to impose a tariff are produced. Many farmers like Scholl are increasingly wary about how tariffs will impact their income.
“I heard one say that the difference between losing money and making money at this point is exports, and so if he doesn’t have as many exports as he did last year, he’s going to lose money,” explained Tamara Nelsen, Senior Director of Commodities for the Illinois Farm Bureau, who added that after several years of declining farm income due largely to increased input costs, tariffs will only take away more money from a farmer’s dwindling bottom line.
“Even though China’s tariff might only be 25 percent, the market might get nervous enough on a given day to have it be a greater discount than that. That just makes it hard for a farmer to make money.”
And it’s not just for profits from pork.
Brent Scholl also farms soybeans, and China’s threat to impose a tariff on that commodity has already cost Scholl money.
“Yesterday, the market went down over 50 cents,” he noted.
Scholl is concerned China will look elsewhere to obtain cheaper commodities, limiting a key market for U.S. products. He feels there is only one person to blame for his uncertain financial outlook.
“Right now, I would say our president,” he said.
A president Scholl voted for in the 2016 election, despite Trump’s tough talk on trade agreements.
Talking with reporters before a recent Cabinet meeting at the White House, Trump addressed farmers’ concerns with his trade policies.
“If we do a deal with China, if during the course of a negotiation they want to hit the farmers because they think that hits me, I wouldn’t say that’s nice,” said Trump. “But I tell you, our farmers are great patriots. These are great patriots. They understand that they’re doing this for the country. And we’ll make it up to them. And in the end, they’re going to be much stronger than they are right now.”
With the U.S. withdrawal from the Trans Pacific Partnership agreement, or TPP, last year, and more recently the re-negotiation of the North American Free Trade Agreement, also known as NAFTA, compounded with potential Chinese tariffs on the key products Scholl raises, it’s a challenging time for U.S. farmers. Scholl admits he has some buyer’s remorse for supporting Trump.
“I thought he was the lesser of two evils,” he told VOA. “I don’t know what I’m thinking right now.”
Scholl is holding out hope President Trump’s trade tactics will work in protecting American jobs and ultimately realizing better trade deals.
If not, Scholl says it could influence his decision at the ballot box in the next presidential election.