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Effects of Trump tariffs trickle down to Nebraska farmers

Posted at 10:15 PM, Jun 07, 2019
and last updated 2019-06-07 23:20:32-04

OMAHA, Neb. (KMTV) — The Trump administration's trade war with China and Mexico is having a huge impact on Nebraska farmers. There is even concern that it could push some to give up farming altogether despite information 3 News Now obtained showing millions being paid to local farmers in subsidies because of the tariffs.

Farming is a multi-billion dollar industry in Nebraska exporting 6.4 billion in agriculture goods in 2017 - the 5th largest export state in the country.

Times are getting tough. Tariffs imposed on our biggest trade partners like China and Mexico are hurting Nebraska farmers.

"The input prices and the cost to operate are thru the roof," Doug Heavican, a former farmer said.

Heavican used to farm corn and soybeans. He took over the family business in the 1980s. He recently gave it up.

"It looked like we were gonna lose a couple hundred thousand this year and I'm not gonna do it. It's a lot of money," he said.

Farmers operate on tight margins and it's been a tough year. Extreme cold in the winter, rains and floods in the spring, throw in tariffs and you have a perfect storm.

"It's getting to be a real big struggle out there for producers," Jay Rempe, a Nebraska Farm Bureau economist said.

Tariffs cost Nebraska nearly $1 billion in revenue last year.

"There's 10 to 15 percent of producers that will have to make hard decisions on whether they want to stay in the business and there's maybe another 30 to 35 percent that are operating on a loss," Rempe said.

Mexico is a top customer for Nebraska corn. For China, it's soybeans.

Those relationships are on incredibly shaky ground after the Trump Administration began a trade war with china causing a ripple effect through the agriculture industry.

To off-set the loses, subsidies are being paid out.

3 News Now obtained a break-down of payments made in Nebraska. So far, more than 36,000 farmers have received compensation totaling over $47 million.

Some call this a drop in the bucket.

"It didn't erase what we lost and the fact is we gained more stockpile of soybeans," Dennis Fujan, a soybean farmer said.

Fujan said more beans left in the silos causes commodity prices to drop hurting the bottom line.

"Tariffs haven't worked before. I don't know why they would work this time," Fujan said.

There's fear the trade war will have a lasting effect.

The trade war is forcing a shift and to find new markets in places like in Japan or South Korea. There's a new hope among farmers to mend the broken relations with our past partners.

"It would be great to get the Chinese market back again. I'm not sure that's ever going to happen the way we had it once you lose a market it's really hard to get it back," Fujan said.

There's no telling how far the effect of the trade war will go within the U.S. and world economies. But, here in the Cornhusker state, farmers, especially the smaller operations, will have to take the brunt of the economic loss.

For now, farmers can only hope agreements can be made and the hemorrhaging of cash can stop.

"If they could get to an agreement with these countries --the world's gotta eat. I think in the long run, I think things will come around," Heavican said.

A billion in lost trade last year and there isn't expected to be any improvement so far in 2019.