As discussions over international trade policies have ramped up in recent months, West Michigan farmers say more needs to be done to ensure the U.S. has a “level playing field” with other countries.
Citing concerns over NAFTA and the retaliatory tariffs from trading partners in China and Mexico, agriculture industry experts say the sector could be entering dark days in the next few years if more is not done to prioritize fairness for domestic producers.
Among the voices calling for a better deal for U.S. farmers is Jeff VanderWerff, a Kent County apple grower.
“I think what it comes down to is most farmers want a fair and leveled playing field across the board for all the commodities — in terms of grain crops, in terms of fruit crops,” VanderWerff told MiBiz.
He cited the patchwork of international standards — on everything from pesticide usage to human rights policies with hired labor — as posing key challenges for his fellow fruit growers.
“It’s pretty heavily regulated,” he said of the industry. “A lot of the countries that we’re competing against, they don’t have any of those same standards that we do. They’re not being held accountable for what type of pesticide and food safety activities that they’re using. To me, if we’re going to play by a set of rules, I’ll play by the same set of rules globally.”
Farmers for years have been voicing concerns over the fairness of trade policies, said Jim Robey, director of regional economic planning services at the Kalamazoo-based W.E. Upjohn Institute for Employment Research.
According to Robey, there are “always going to be winners and losers” with trade deals and tariffs.
“I am uncertain how this will work out for farmers,” he told MiBiz. “(W)ith so much uncertainty, people are unwilling to make decisions about buying products and investing in capital.”
Echoing VanderWerff’s sentiments, Robey said the U.S. needs to revisit its trade deals, even if “it’s painful and hard to do so.”
“It’s like the hot stove that no one wants to touch,” Robey said. “Ultimately, we need to reset the table to make fair trade, (while) keeping open markets.”
FIGURING IT OUT
At the time this report went to press, the U.S. had come to a bilateral trade agreement with Mexico and appeared to be nearing a deal with Canada.
Both partners’ trade policies had come under fire from U.S. dairy farmers, who remain concerned that tariffs could cost the struggling industry billions of dollars over the next few years, as well as lead to the loss of thousands of jobs.
According to fourth-generation dairy farmer Kristi Keilen, fixing NAFTA and allowing U.S. dairy farmers better access to broader North American consumers would likely help reverse the slide in the domestic milk market, “which is extremely depressed.”
Keilen, a partner in K&K Dairy Farms LLC that operates a 450-head dairy operation in Westphalia, Mich., said the situation needs “to get fixed as soon as possible because it’s costing the farmers a whole lot of money.”
“Canada, with their milk marketing order changes, has made it so we cannot export milk to them,” Keilen told MiBiz. “If we could fix this, it would increase our ability to export milk to Canada and help out the dairy farmers.”
In addition to dairy farmers, Keilen said corn and soybean producers are being affected by tariffs, as soybean futures plunge.
To help American farmers, President Trump ordered the U.S. Department of Agriculture earlier this year to give $12 billion of borrowed money from the Treasury to pay producers of soybeans, corn and dairy, among other commodities.
“Most farmers believe in Trump and understand why he is using the tariffs, and that it will, in the long run, be a much better way of doing business with other countries,” Keilen said. “It is unfortunate that it had to hit us so hard. Farmers don’t want the handouts because we already get criticized so much for taking handouts all the time. Plus, we know that a handout isn’t really fixing the problem, it’s just getting us by.
“We would prefer the problem gets fixed and the tariffs can come off instead.”
While VanderWerff hasn’t changed his overall strategy for 2019, his agricultural operations are feeling the effects of the recent steel and aluminum tariffs.
“The price of grain bins is going up, the price of tillage equipment is going up, (and) we’re seeing costs increase,” VanderWerff said.
Amid mounting pricing pressures, VanderWerff acknowledges farmers are powerless when it comes to controlling macroeconomic headwinds.
“I can’t control international trade,” he said. “I can complain about it when it doesn’t work for me, but ultimately, I have to go out and find a solution that is within my control and maximize profits through that.”