$12 billion aid combating tariff losses easing farmers' concerns

Tariffs, trade policy changes taking a bite out of farmers' profits
Updated: Jul. 25, 2018 at 6:26 PM EDT
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LANESVILLE, IN (WAVE) - "Everybody's concerned. Because right now we're operating at a loss if we have to sell today," farmer Guy Heitkemper said.

The soybean crops are rising but the prices are staying down. Tariffs and trade policy changes are taking a bite out of farmers' profits but a government aid package could ease those concerns.

On Tuesday, The Department of Agriculture announced a $12 billion aid package to help farmers impacted by the trade war - but experts said this isn't a long term fix.

"It just doesn't look good," corn and soybean farmer Guy Heitkemper said.

Every day, Heitkemper checks his crops and checks the market prices for what his corn and soybeans, now in the ground, will bring in at harvest.

This season has been a shaky one, Heitkemper said. What's growing in the ground is good but market prices for soybeans and corn are down. Experts said a 25 percent tariff on soybeans is the cause.

The low prices now could erase any profit Heitkemper's crop will bring.

"At $10 we were barely making money. And at $8 dollars, there's nothing left," he said.

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Two dollars a bushel may not sound like much but that equals out to about $100 an acre. At 750 acres, Heitkemper estimated he'll lose about $70,000 to $80,000 if prices stay low. Between the large crop and the lower prices, many soybean farmers worry about just breaking even this season.

Economists credit those crop price d rops to rising tariffs and the trade war put in place by President Trump.The $12 billion aid package could come as early as September.

The aid package is welcome and Heitkemper said he hopes it can make up the loss for prices this year, but he also said it's not a perfect solution.

"Well the $12 billion sounds like a lot of money. But when you get to scattering it out to all the farmers, I don't know that it's going to be enough," Heitkemper said. "A higher price would be better. Because I'd rather see a free market than the government aid."

University of Louisville Associate Professor of Economics Jose Fernandez said with this move, the government is picking winners and losers.

"The farmers need this relief because of retaliatory tariffs. The Trump administration is socializing the losses of this trade wars on the backs of consumers and tax paying households," Fernandez said.

President Trump tweeted "Tariffs are the greatest...," saying these market trends will turn around if people are willing to wait and see.

"The farmers will be the biggest beneficiary. Watch. We're opening up markets, you watch what's going to happen," President Trump said during a speech.

While his crops grow, Heitkemper said he's not giving up hope.

"I have faith in our President. And hopefully he'll come through and will be able to help us," Heitkemper said.

Beyond agriculture, tariff increases have impacted trade for the United States and for local businesses running in WAVE Country.

"This trade war particularly hurts Kentucky because bourbon has been targeted, the tariffs on steel and aluminum hurt our auto and appliance manufacturing industries by making inputs more expensive. The EU, China, Canada, and Mexico all have retaliatory tariff proposals. This is not good for the average consumer," Fernandez said.

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