I do enjoy seeing people argue with someone who actually works in ag.
Are the tariffs hurting the soybean market currently? Yes. But they were also bad last year and the year before. Why? Because supply exceeded demand and the big speculators took their profits and ran. Ag is cyclical.
There was a big run up in prices during the pandemic as speculator money moved into commodities. John Deere (and others) increased production in response; and now they are doing the opposite since the market has cooled. It’s what they always do. But you get these one sided myopic hit pieces that only tell you it’s because tariffs. Nonsense.
I don’t believe this administration is going to let American farmers wither on the vine. I already have said here that if what Jobu said comes to fruition, I’ll own it. There are a lot of rumors of direct payments being issued this year to help struggling farmers. (which some will call socialism and mock the Trump voters for taking payments, but Ray might more correctly refer to as a centralized safety net for a critical industry)
The closest thing I’ve seen to a good ag take on this board is Murph saying our food system is broken, subsidized monoculture farming is bad for the environment, etc. Both are true. But arguing for no subsidies means a shift to continued consolidation to the point where the entire nation is farmed by a few mega farmers, which isn’t good either. We need a shift to more diverse crops and less dependence on raising too much corn and soybeans every year and hoping there is a market.
I always use the analogy of a T Shirt company. What kind of t shirt company would make as many of the same two styles of t shirts as they possibly could every single year, then hope they sold enough/got enough margin to do it all over again next year? And the next, and the next… None. But that’s what farmers are incentivized to do, which is against all the laws of economics. We want cheap and abundant food, but these are the consequences. The trade spat with China is just an exacerbation of the underlying economics problem that’s plagued ag for generations. Besides, China was grooming Brazil to be their bean supplier clear back when I was a grain merchandiser/broker for Cargill in the mid 2000s.
We need a federal safety net for one of our most critical industries, of which ag is certainly one. But what we really need is major reform to our entire food system. I’d start with a shift away from some corn acres to plant protein acres, backed with incentives to get people to buy products made with those rather than Cheetos and Doritos and other shit. Slowly roll back ethanol mandates and place restrictions on synthetic fertilizers and some chemicals. Also we could probably go back to some form of a set aside program to take some acres out of production and reduce domestic supply to keep it more in line with demand.
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