Trump’s trade war is draining profits for Montana wheat farmers

Today’s agricultural producers battle both environmental threats and geopolitical conflict.

 

Michelle Erickson Jones poses for a photograph in front of a tractor and grain silos at Erickson Farm in Broadview, Mont.
Matthew Brown/AP Images

On a hot August day in southern Montana, Michelle Erickson-Jones climbed onto her green combine, a massive machine that reaps and separates ripe grain. August is harvest season, so Erickson-Jones was focused on gathering the mature wheat on her farm and preparing it for sale. “We cut somewhere around 250 to 300 acres a day,” she told me over the phone, even as she maneuvered the combine through a field. All told, she and her family spent 21 days collecting wheat this year — a good harvest.

Despite that bounty, problems arise once the wheat is sold. Ongoing international trade disputes are causing Montana wheat farmers’ earnings to stagnate. With around half a million dollars in operational costs and less than $25,000 in subsidy payments from the federal government, Erickson-Jones, a fourth-generation farmer, will not make a profit this year. “It’s been three years since I’ve drawn anything but a break-even budget, and that’s hinging on good (wheat) production,” she said.

This struggle to make ends meet is shared by many Montana producers. Along with environmental threats like heat waves and flooding, today’s farmers must contend with the chaos of modern political conflicts. With the U.S.-China trade war in its second year and international agricultural relationships uncertain, “It’s really hard to make any kind of profit,” said Lyle Benjamin, a farmer and president of the Montana Grain Growers Association. As a result, farmers “are taking a real, hard look at whether they really want to stay farming or not.”

American farmers depend on international trade. The U.S. is one of the world’s largest agricultural exporters, shipping over 20% of its farm-grown products overseas each year. In Montana, wheat is the state’s biggest agricultural commodity, with farmers exporting $565 million worth in 2017.

Much of Montana’s wheat goes to Japan. But the future of that longstanding relationship was thrown into doubt in 2017, when the U.S. withdrew from the Trans-Pacific Partnership, a now-defunct trade agreement among 12 countries, signed in 2016. The deal that replaced it would tax U.S. wheat at a higher rate than Canadian and Australian wheat, starting in April 2020, putting this vital market at risk, said Steve Mercer, vice president of communications at the U.S. Wheat Associates. The Montana Wheat and Barley Committee, a lobbying group, estimates that the withdrawal is costing Montana wheat farmers around $150 million annually. However, a new trade deal the U.S. and Japan are negotiating now may retain the country’s equal footing with Canada and Australia, preserving Montana’s top wheat market. 

The ongoing U.S.-China trade war is putting additional strain on Montana farmers. Since early 2018, President Trump has imposed tariffs on more than $250 billion worth of Chinese goods, from steel to textiles. China retaliated with tariffs on $110 billion of U.S. products, including soybeans, corn and wheat. And both countries have announced additional taxes, set to begin in September. The back-and-forth hikes have caused the price of a bushel of Montana wheat — which typically hovers around $5.50 — to drop by $0.41, said Benjamin.    

Nationwide, farmers’ economic losses have totaled billions of dollars; in response, the federal government last year started doling out subsidies through the Market Facilitation Program. Farmers and ranchers across the country have received about $8.59 billion since then, 84% of which has gone to Midwestern soybean farmers as of April, according to the Great Falls Tribune. Montana farmers, on the other hand, received less than 1%. This year, farmers and ranchers across the country impacted by the tariffs are receiving at least $15 per acre. These payments will make up for soybean growers’ short-term losses, “but that will not be true of all producers everywhere,” said Patrick Westhoff, director of the Food and Agriculture Policy Research Institute at the University of Missouri.

No thorough analysis has been done on how the subsidies impact wheat farmers specifically, but “you’d be hard-pressed to find a farmer who would say that this program fully offsets what they lost in sales from the tariffs,” said Josh Tonsager, vice president of policy and communications at the National Association of Wheat Growers.

Along with the immediate concern of revenue losses, this trade conflict may also provoke more lasting problems. The subsidies are “not a sustainable approach for having a healthy U.S. farm economy,” said Amanda Countryman, an associate professor in agriculture and resource economics at Colorado State University. China is the largest export market for U.S. agricultural products, and payments to farmers can’t compensate for the erosion of that relationship, or the trust that was its foundation, Countryman said; the payments are merely a “Band-Aid on a much deeper wound.” 

And the trade war between the U.S. and China shows no signs of stopping. With Trump hinting at his regrets about the continuing trade conflict last weekend, just 48 hours after he pledged to raise tariffs on China, farmers are uncertain about the next round of U.S.-China trade negotiations, scheduled for September. It may still be a while before producers like Erickson-Johnson turn a profit. “I would like to keep operating,” she said, but the trade war “definitely puts a little bit of a dimmer on the future of agriculture.”

Helen Santoro is an editorial intern at High Country News. Email her at [email protected] or submit a letter to the editor.

High Country News Classifieds
  • EXECUTIVE DIRECTOR
    Mountain Time Arts, a Bozeman-based nonprofit, is seeking an Executive Director. MTA advocates for and produces public artworks that advance social & environmental justice in...
  • BEND AREA HOME WITH AMAZING CASCADE PEAKS VIEW
    Enjoy rural peacefulness and privacy with one of the most magnificent Cascade Mountain views in sunny Central Oregon! Convenient location only eight miles from Bend's...
  • MARKETING COMMUNICATIONS MANAGER
    High Country News, an award-winning media organization covering the communities and environment of the Western United States, seeks a Marketing Communications Manager to join our...
  • EDITOR-IN-CHIEF
    High Country News, an award-winning media organization covering the communities and environment of the Western United States, seeks an Editor-In-Chief to join our senior team...
  • RESEARCH FELLOW (SOUTHWESTERN U.S. ENERGY TRANSITION)
    The Institute for Energy Economics and Financial Analysis (IEEFA) in partnership with the Grand Canyon Trust is seeking a full-time Fellow to conduct topical research...
  • LENDER OWNED FIX & FLIP
    2 houses on 37+ acres. Gated subdivision, Penrose Colorado. $400k. Possible lender financing. Bob Kunkler Brokers Welcome.
  • ONCE OR TWICE
    A short historical novel set in central Oregon based on the the WWII Japanese high altitude ballon that exploded causing civilian casualties. A riveting look...
  • HISTORIC LODGE AND RESTAURANT - FULLY EQUIPPED
    Built in 1901, The Crazy Mountain Inn has 11 guest rooms in a town-center building on 7 city lots (.58 acres). The inn and restaurant...
  • HOUSE FOR SALE
    Rare mountain property, borders National Forest, stream nearby. Pumicecrete, solar net metering, radiant heat, fine cabinets, attic space to expand, patio, garden, wildlife, insulated garage,...
  • COMMUNITY ORGANIZER- NORTHERN PLAINS RESOURCE COUNCIL
    Want to organize people to protect Montana's water quality, family farms and ranches, & unique quality of life with Northern Plains Resource Council? Apply now-...
  • CONSERVATION MANAGER
    The Rio Grande Headwaters Land Trust (RiGHT) is hiring an energetic and motivated Conservation Manager to develop and complete new conservation projects and work within...
  • POLLINATOR OASIS
    Seeking an experienced, hardworking partner to help restore a desert watershed/wetland while also creating a pollinator oasis at the mouth of an upland canyon. Compensation:...
  • ELLIE SAYS IT'S SAFE! A GUIDE DOG'S JOURNEY THROUGH LIFE
    by Don Hagedorn. A story of how lives of the visually impaired are improved through the love and courage of guide dogs. Available on Amazon.
  • COMING TO TUCSON?
    Popular vacation house, furnished, 2 bed/1 bath, yard, dog-friendly. Lee at [email protected] or 520-791-9246.
  • NORTHEASTERN UNIVERSITY
    All positions available: Sales Representative, Accountant and Administrative Assistant. As part of our expansion program, our University is looking for part time work from home...
  • RUBY, ARIZONA CARETAKER
    S. Az ghost town seeking full-time caretaker. Contact [email protected] for details.
  • EXECUTIVE DIRECTOR
    Powder River Basin Resource Council, a progressive non-profit conservation organization based in Sheridan, Wyoming, seeks an Executive Director, preferably with grassroots organizing experience, excellent communication...
  • ADOBE HOME
    Passive solar adobe home in high desert of central New Mexico. Located on a 10,000 acre cattle ranch.
  • EXECUTIVE DIRECTOR
    Eastern Nevada Landscape Coalition, based in Ely, Nevada is looking for a new executive director to replace the long-time executive director who is retiring at...
  • STEVE HARRIS, EXPERIENCED PUBLIC LANDS/ENVIRONMENTAL ATTORNEY
    Comment Letters - Admin Appeals - Federal & State Litigation - FOIA -