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
  • OPERATIONS DIRECTOR
    We are a Santa Fe-based nonprofit that builds resilience on arid working lands. We foster ecological, economic, and social health through education, innovation, and collaboration....
  • COMMUNITY ORGANIZER
    Come work alongside everyday Montanans to project our clean air, water, and build thriving communities! Competitive salary, health insurance, pension, generous vacation time and sabbatical....
  • CAMPAIGN MANAGER
    Oregon Natural Desert Association (ONDA), a nonprofit conservation organization dedicated to protecting, defending and restoring Oregon's high desert, seeks a Campaign Manager to works as...
  • HECHO DEPUTY DIRECTOR
    Hispanics Enjoying Camping, Hunting, and the Outdoors (HECHO) was created in 2013 to help fulfill our duty to conserve and protect our public lands for...
  • REGIONAL REPRESENTATIVE, COLUMBIA CASCADES
    The Regional Representative serves as PCTA's primary staff on the ground along the trail working closely with staff, volunteers, and nonprofit and agency partners. This...
  • FINANCE AND OPERATIONS DIRECTOR
    The Montana Land Reliance (MLR) seeks a full-time Finance and Operations Director to manage the internal functions of MLR and its nonprofit affiliates. Key areas...
  • DIRECTOR OF CONSERVATION
    The Nature Conservancy is recruiting for a Director of Conservation. Provides strategic leadership and support for all of the Conservancy's conservation work in Arizona. The...
  • EXECUTIVE DIRECTOR
    The Amargosa Conservancy (AC), a conservation nonprofit dedicated to standing up for water and biodiversity in the Death Valley region, seeks an executive director to...
  • BIG BASIN SENIOR PROJECT PLANNER - CLIMATE ADAPTATION & RESILIENCE
    Parks California Big Basin Senior Project Planner - Climate Adaptation & Resilience ORGANIZATION BACKGROUND Parks California is a new organization working to ensure that our...
  • CUSTOMER SERVICE ASSISTANT - (PART-TIME)
    High Country News, an award-winning media organization covering the communities and environment of the Western United States, seeks a part-time Customer Service Assistant, based at...
  • SCIENCE PROJECT MANAGER
    About Long Live the Kings (LLTK) Our mission is to restore wild salmon and steelhead and support sustainable fishing in the Pacific Northwest. Since 1986,...
  • HUMAN RESOURCES GENERALIST
    Honor the Earth is an affirmative action/equal opportunity employer and does not discriminate based on identity. Indigenous people, people of color, Two-Spirit or LGBTQA+ people,...
  • DEVELOPMENT DIRECTOR
    Colorado Trout Unlimited seeks an individual with successful development experience, strong interpersonal skills, and a deep commitment to coldwater conservation to serve as the organization's...
  • NEW BOOK BY AWARD-WINNING WILDLIFE BIOLOGIST, BRUCE SMITH
    In a perilous place at the roof of the world, an orphaned mountain goat is rescued from certain death by a mysterious raven.This middle-grade novel,...
  • DESCHUTES LAND TRUST VOLUNTEER PROGRAM MANAGER
    The Deschutes Land Trust is seeking an experienced Volunteer Program Manager to join its dedicated team! Deschutes Land Trust conserves and cares for the lands...
  • PROGRAM DIRECTOR
    Now hiring a full-time, remote Program Director for the Society for Wilderness Stewardship! Come help us promote excellence in the professional practice of wilderness stewardship,...
  • WYOMING COMMUNITY PARTNERSHIPS COORDINATOR
    The Theodore Roosevelt Conservation Partnership is seeking Coordinator to implement public education and advocacy campaigns in the Cowboy State to unite and amplify hunter, angler,...
  • MOUNTAIN LOTS FOR SALE
    Multiple lots in gated community only 5 miles from Great Sand Dunes National Park. Seasonal flowing streams. Year round road maintenance.
  • RURAL ACREAGE OUTSIDE SILVER CITY, NM
    Country living just minutes from town! 20 acres with great views makes a perfect spot for your custom home. Nice oaks and juniper. Cassie Carver,...
  • A FIVE STAR FOREST SETTING WITH SECLUSION AND SEPARATENESS
    This home is for a discerning buyer in search of a forest setting of premier seclusion & separateness. Surrounded on all sides by USFS land...