Nebraska Farmer Discusses How Trade War Would Impact American Agricultural Industry
AUDIE CORNISH, HOST:
Businesses across the U.S. are making all sorts of calculations right now trying to figure out what it would mean for them if these tariffs do happen. One of the people doing the math is Mark McHargue.
MARK MCHARGUE: We grow corn, which has a market in China. We grow soybeans, which - well over 20, 30 percent of our soybeans could end up in China. We grow pork, which - China's a very big market. And we grow popcorn, which - a lot of popcorn goes into China right now.
CORNISH: He owns a farm in Central City, Neb., and is a member of Nebraska's Farm Bureau. He learned of China's proposal today for steep tariffs on soybeans, corn and other big U.S. exports when he saw that the markets had tanked this morning.
MCHARGUE: You know, I thought, something must have happened with China. So sure enough, we had some retaliatory conversations going on, and the market responded. And I was going, crud, I should have sold more stuff yesterday I guess.
CORNISH: You don't sound that worried. I have to say.
MCHARGUE: (Laughter) Oh, yes, well, I could tell you that it affected my operation $20,000 today, and so that's the answer. The markets for me were starting a trend up. We had a little bounce in corn yesterday. And then to receive news like this - and it just makes you wonder, are we going to be in this for the long haul?
CORNISH: So walk us through the calculations you're making about, you know, what you'd be losing if these tariffs become real.
MCHARGUE: Well, I mean, it's already there. The market reacts whether to be rumor or fact or when they actually get imposed. We have some equipment purchases that we were thinking about yesterday. They will be off the table today with this market move.
CORNISH: How much would you have spent on that equipment that you were planning to buy?
MCHARGUE: We were probably making decisions on $50,000 to $100,000 worth of equipment that we will certainly postpone now.
CORNISH: What are you hearing from other farmers, right? Are they on edge? Can they absorb a hit if these tariffs go through?
MCHARGUE: Well, they'll have to. We'll have to. So we've been tightening our belts for a couple of years now, and so unfortunately we're just at breakeven levels. And you just can't function breakeven year after year after year. And so if the trade continues to react, this move will force some people out.
CORNISH: The president has said that trade wars are good and easy to win. Do you believe him?
MCHARGUE: No I don't believe him at all. We live in a global society that reacts very quickly to conversations and to rhetoric. And I think the president has done some really great things honestly, especially for the ag sector, the trade arena, sort of doing it from a negotiating standpoint. We don't have enough history. I don't have enough history to have faith that it'll actually work.
CORNISH: So what is your message to the president right now?
MCHARGUE: The message would be to listen very carefully to your advisers. I think he's got good people around him that I've talked to. Seek their advice, and take their advice.
CORNISH: What have you told the president's advisers?
MCHARGUE: We've told them that - Sonny Perdue specifically that agriculture just can't take a hit like this. While maybe we need to fix some things, the trade agreements for agriculture have been good. NAFTA has been good. We're selling beef into China again, and that was a function of some of the stuff that Trump has done. But let's not put the whole trade issue on the backs of agriculture.
CORNISH: Do you have some kind of plan B if this tariff situation escalates and you find that that market in China is not open to you the way it was?
MCHARGUE: No. The plan right now is just to continue the talk to our legislators. We've got some side businesses that we're working on to diversify our operation. We're looking at some other crops that maybe aren't so dependent on the China market.
CORNISH: Can I ask what crops?
MCHARGUE: Well, we're looking at doing a little bit more organic-type production that maybe could be used more domestically. We're looking at field peas - different rotations, I guess. That would maybe work. But our major commodities of corn, soybeans, popcorn and hogs - we just can't change that that much.
CORNISH: Well, Mark McHargue, thank you so much for speaking with us.
MCHARGUE: All right, no problem.
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Correction April 4, 2018
A previous Web introduction to this story incorrectly said Audie Cornish spoke with Steve Nelson. The conversation was actually with Mark McHargue.