U.S. farmers are preparing for a slow recovery after China officially stopped buying U.S. agricultural products.
 | TUE, AUG 06, 2019 | | | | DOW | | NAME | LAST | CHG | %CHG | | AAPL | 197.00 | +3.66 | +1.89% | | MSFT | 134.69 | +2.48 | +1.88% | | PFE | 36.95 | -0.01 | -0.03% | |
| | S&P 500 | | NAME | LAST | CHG | %CHG | | GE | 9.57 | -0.09 | -0.93% | | BAC | 28.42 | +0.34 | +1.21% | | AMD | 28.86 | +0.87 | +3.11% | |
| | NASDAQ | | NAME | LAST | CHG | %CHG | | AMD | 28.86 | +0.87 | +3.11% | | AAPL | 197.00 | +3.66 | +1.89% | | MSFT | 134.69 | +2.48 | +1.88% | |
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Stock investors began rebounding from their worst day of the year, but farmers are preparing for a much slower recovery after the recent trade war escalation. American farmers are losing their fourth-largest customer after China officially stopped buying U.S. agricultural products. The loss piles onto an already tough year for crops and commodity prices and could dent U.S. gross domestic product and sales at companies whose businesses are tied to farming. Last year, China made up $5.9 billion of U.S. farm product exports, according to the U.S. Census. It's the world's top buyer of soybeans and purchased roughly 60% of U.S. soybean exports last year.  Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri, estimated an additional $4 billion drop in soybean exports thanks to new tariffs, even before the total loss of Chinese demand. As a result of Chinese companies ending purchases of U.S. agriculture products, he anticipates "even larger market and price impacts." Agriculture is a deeply political issue, too. On one hand, China's move hurts GDP and Trump's political base of rural farmers — but perhaps more importantly, it hurts corporate farming companies that tend to be huge Republican donors. The White House began rolling out a $16 billion federal aid package in May to help farmers weather the trade war, and on Tuesday, President Donald Trump tweeted that farmers know that China "will not be able to hurt them" since "their President has stood with them." But former Iowa Lt. Gov. Patty Judge said the bailout isn't widely embraced as a permanent solution — at least in her home state. The loss of the key trading partner sets up a "dangerous situation" with some "serious repercussions for farmers." The China loss also exacerbates other problems — like floods and African swine fever — that had already weighed on farmers' bottom lines this year. Have friends or colleagues who might like this newsletter? Tell them they can sign up for CNBC's Evening Brief here. |
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