Nebraska Corn Farmers Are Not Happy With Trump

Corn farmers have received a double-whammy from Donald Trump, and they are hurting. Not only are they continuing to be hurt by the trade war with China, but Trump has changed the renewable fuel rules which is hurting the farmers that provide corn for ethanol.

The following is a statement released by the Nebraska Corn Board.

As harvest approaches after an extremely difficult year for agriculture, many Nebraska corn farmers are outraged by the Trump administration’s lack of support for the American farmer. The Nebraska Corn Board and the Nebraska Corn Growers Association call upon the administration to fulfill its promises and to abide by the law and uphold the integrity of the Renewable Fuel Standard (RFS).

President Trump’s administration continues to erode the RFS by granting 31 unjustified refinery waivers, destroying demand for corn and ultimately choosing to bail out the oil industry rather than helping American farmers. Corn farmers are already suffering from ongoing trade disputes, uncertain weather and continued low prices.

“I’ve never experienced anything like this,” said David Bruntz, chairman of the Nebraska Corn Board and farmer from Friend. “All we’re getting is lip service. At one moment, we think President Trump is on our side, and then the refinery waivers come through. It’s truly a slap in the face. Farmers are hurting and it just keeps getting worse.”

Along with undermining the RFS, the U.S. has made little progress in trade. A new deal between the U.S., Mexico and Canada still has not been reached and tensions continue to escalate between the U.S. and China.

“Many of our corn farmers have stood with Trump for a long time, but that may soon change” said Dan Nerud, president of the Nebraska Corn Growers Association and farmer from Dorchester. “Trump needs to uphold the law and his commitment to our nation’s corn farmers by making the RFS whole and bringing trade agreements to the finish line.”

Nebraska Corn urges you to stand up for our state’s corn and ethanol industries by telling the Trump administration to stop stripping the RFS. Rural America is under attack and now is the time to act. Submit a letter to President Trump by clicking here. Submit comments before the August 30 deadline.

Farmers Are Trump's Biggest Supporters - And Biggest Victims

(Cartoon image is by Dave Granlund at davegranlund.com.)

One of the craziest things about Donald Trump's trade war with China is that it has hurt his best supporters the most (farmers). Here's how Nobel Prize-winning economist Paul Krugman explains it in his New York Times column:

Donald Trump is unpopular, but he retains the loyalty of some important groups. Among the most loyal are America’s farmers, who are a tiny minority of the population but exert disproportionate political influence because of our electoral system, which gives 3.2 million Iowans as many senators as almost 40 million Californians. According to one recent poll, 71 percent of farmers approve of Trump’s performance — which is down somewhat from previous polling, but remains far above the national average.

Yet farmers are hurting financially. Investors are worried about a possible recession for the economy as a whole, but the farm recession is already here, with falling incomes, rising delinquency rates and surging bankruptcies. And the farm economy’s troubles stem directly from Trump’s policies.

This apparent contradiction — Trump is inflicting the greatest harm on the people who supported him most — isn’t an accident. Farmers’ past support for Trump was predictable: The demography and culture of (white) rural America make it fertile ground for politicians promising to restore traditional society, and especially traditional racial hierarchy. But farmers’ financial distress should also have been predictable: While rural America may dislike and distrust cosmopolitan elites, the U.S. farm economy is hugely dependent on global markets, and it has inevitably been a major victim of the Trumpian trade war.

The questions, looking forward, are whether farmers understood what they were getting themselves into, whether they understand even now that their distress isn’t likely to end anytime soon, and whether economic pain will shake their support for the man who’s causing it.

At one level, it’s not hard to see why farmers supported Trump. Hostility to nonwhite immigrants was central to his campaign, and such hostility tends to be highest in places where there aren’t actually many immigrants. So rural America, with its still tiny immigrant population, was a receptive audience for his fear-mongering. More generally, Making America Great Again — which was basically about setting back the clock racially and culturally — was a message that played well in places that still tend to think of themselves (and are told by politicians to think of themselves) as the Real America, as opposed to the big metropolitan areas where most Americans actually live.

On the other hand, while farm country may be notably lacking in ethnic diversity and feels generally distrustful of globalists, the farm economy is in fact deeply integrated with and dependent on world markets. On the eve of Trump’s trade war, America exported76 percent of its cotton production, 55 percent of its sorghum, half its soybeans, and 46 percent of its wheat.

Overall, U.S. agricultural exports are almost 40 percent of the value of farm production, up from just 15 percent circa 1970. Globalization hurt some parts of U.S. manufacturing, with particularly harsh effects on some small industrial cities. But the rise of China and the growth of world trade have been nothing but good news for farmers.

And here’s the thing: It shouldn’t have been hard to predict that Trumponomics would be bad for farmers. Trump’s desire for a trade war was out in the open from the beginning; protectionism is right up there with racism and anti-environmentalism as one of his core values. And a trade war was bound to hurt farm exports. Did anyone really imagine that China, an economic superpower with its own fierce nationalism, wouldn’t retaliate against U.S. tariffs?

So what were farmers thinking? My guess is that they let the will to believe override their judgment. Trump seemed like their kind of guy. He certainly seemed to share their dislike for urban elites who, they imagined, looked down on people like them. So they convinced themselves that he knew what he was doing, that he would win his trade war and that they would be among the victors sharing the spoils.

Even now many farmers seem to believe that the pain will end any day now, that Trump will soon announce a deal that restores all the old markets and more.

In short, farmers’ support for Trump should be seen as a form of affinity fraud, in which people fall for a con man whom they imagine to be someone like them.

And as is often the case in such frauds, the con man and his associates actually have contempt for their marks. . . .

So what will happen as the trade war drags on? Don’t expect farmers to suddenly exclaim en masse, “Hey, we’ve been had!” Real life doesn’t work that way. But they have, in fact, been had, and they may finally be starting to realize it.

Trump's $12 Billion Bailout For Farmers Is Not A Good Plan

(This image of a soybean field is from Britannica.com.)

Donald Trump thought he could bully other nations into giving the United States more favorable trading terms. He did this by imposing tariffs on foreign products entering the United States and threatening to impose even more tariffs if those nations don't bend to his will. Unfortunately, his trade war is not going well.

The first hits were taken by American farmers. A perfect example is the farmers who raise soybeans. China buys about 30% of American-grown soybeans. But instead of giving in to Trump, they just cancelled their orders for U.S. soybeans. Instead, they are growing a million new acres of the plant themselves, and have signed contracts to buy the rest of what they need from South America and Russia.

And soybeans aren't the only product affected. The longer the trade war lasts, the more damage will be incurred by American farmers and factories -- and consumers, who will have to pay higher prices for many goods.

Trump realizes that he's losing support among farmers (who in 2016 were among his most loyal supporters), so he has devised a bailout to help the farmers. He's borrowing $12 billion to give farmers some aid. But this plan has some serious flaws, and I believe will not be workable as a solution. Here's why:

1. It is a short-term bailout. It is only for the rest of this year. What about next year?

2. Trump had already overseen a ballooning deficit that's approaching a trillion dollars a year. Borrowing $12 billion more is not going to help that.

3. The bailout assumes that Trump will be able to negotiate new trade deals in a short period of time. There is no evidence that is possible. While Trump has bragged about being a great negotiator and dealmaker, in the first 18 months of his term he has not been able to make a single new deal. He has trashed some agreements, but been unable to negotiate any new ones.

4. Even if Trump was to end his trade war now, there is no reason to believe that the countries that found other places to buy needed goods would return to the U.S. market. Why would they when Trump has shown he cannot be trusted to keep those markets stable.

5. Trump seems to think that a trade war is easily won because other countries need the United States. The truth is that the United States needs the markets and products of other countries as much as they need ours.

Trump's trade war was a very bad idea, and his bailout for farmers is equally bad. Neither will work. We live in an era where nations must respect the global marketplace -- even the United States. Trump's economic bullying might have worked 50 to 70 years ago, but not now.