Farmer: 'There’s going to be some challenges' for Trump in 2020 if trade doesn't turn around

As the 2020 presidential election inches closer, all eyes are on whether key swing states will continue supporting President Trump amid the painful U.S.-China trade war.

Ohio, Iowa, Louisiana, and Kansas — which all voted for Trump in the 2016 election — exported billions of dollars in soybeans in 2018. The tariffs war between the U.S.-China trade is punishing farmers, however. China, previously the biggest U.S. soybean export destination, turned off the spigot.

In this Tuesday, April 4, 2017, photo, Blake Hurst, a corn and soybean farmer and president of the Missouri Farm Bureau, left, talks with his brother Kevin Hurst on his farm in Westboro, Mo. U.S. President Donald Trump has vowed to redo the North American Free Trade Agreement, but NAFTA has widened access to Mexican and Canadian markets, boosting U.S. farm exports and benefiting many farmers. Hurst says NAFTA has been good for his business and worries that he'll lose out in a renegotiation. (AP Photo/Nati Harnik)
Soybean farmer Blake Hurst talks with his brother Kevin Hurst on his farm in Westboro, Mo. (Photo: AP Photo/Nati Harnik)

Blake Hurst, a soybean farmer and president of the Missouri Farm Bureau, noted on Yahoo Finance’s On the Move that farmers “don’t like the way [that] China acts in international markets, and they’re willing to be patient.”

However, he added that with “many of my neighbors, particularly younger farmers with a little bit of a more leveraged balance sheet, a lot of that patience is beginning to go away. So I think there’s going to be some challenges for the Trump administration come election time if we don’t see a turnaround in these trade markets.”

‘He took away all of our markets’

Many Midwestern states are big exporters of soybeans. (Chart: Deutsche Bank)
Many Midwestern states are big exporters of soybeans. (Chart: Deutsche Bank)

Although the White House has provided billions in dollars of aid through the USDA for farmers to offset the effects of tariffs, farmers have repeatedly stressed that they want trade, not aid.

“This trade thing is what’s brought on by the president and it’s really frustrating because he took away all of our markets,” Bob Kuylen, a farmer from North Dakota, previously told Yahoo Finance.

At one point in 2018, U.S. soybean exports to China were down 98%. As China turned to other countries like Brazil for their soybeans, U.S. soybean inventories increased dramatically.

Soybeans “are easy to store, and we’ll be able to wait for better prices,” Hurst said. “But at some point, we have to get rid of last year’s soybeans. They have to go to market and have room for this year’s crop.”

There have been no indications that either side is going to relent soon. China announced in early August that it would put a hold on buying U.S. agricultural products. One American farmer described the move to Yahoo Finance as “another nail in the coffin.”

Bret Davis, a soybean farmer, prepares to climb into his tractor in Delaware, Ohio, on Tuesday, May 14, 2019. Some farmers fear the protracted trade war with China will permanently alter their sales, leaving them without a foothold in one of their largest markets. (AP Photo/Angie Wang)
A soybean farmer, prepares to climb into his tractor in Delaware, Ohio, on Tuesday, May 14, 2019. (Photo: AP Photo/Angie Wang)

“We basically have a year to market a crop,” Hurst said. “We’ll sell some on the futures before that. We can obviously take futures protection on this year’s crop… but they have to move in the marketing channels in a year because we don’t have enough storage for two years of crops.”

Some have surmised that the U.S. and China might not reach a trade deal until the outcome of the 2020 election is revealed.

Hurst noted that China is “following the polls just like the rest of us and clearly think there’s a chance there will be a change and that the next administration will be easier to deal with.”

Adriana is an associate editor for Yahoo Finance. Follow her on Twitter @adrianambells.

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