China Tariffs: Hog Farmers Worry They'll Be Further Squeezed One farmer says he has seen hog prices drop to the point where it may cost some farmers more to raise a pig than they can sell it for — and he worries about lower sales.

Hog Farmers Worry They'll Be Further Squeezed By China's Pork Tariffs

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DAVID GREENE, HOST:

All right, we still don't know if the tariff threats being lobbed back and forth by the U.S. and China will become a full-blown trade war, but farmers in the Midwest are already feeling effects from these early skirmishes. Earlier this week, China imposed new tariffs on pork, pressuring U.S. producers who already struggle with razor-thin profit margins. Iowa Public Radio's Amy Mayer reports that if the threat to target soybeans becomes real, things for some U.S. farmers could get a lot worse.

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AMY MAYER, BYLINE: As Howard Hill raps on the side of his nursery barn, piglets stir inside.

HOWARD HILL: We have a sow farm - small sow farm here in Nevada, Iowa.

MAYER: Hill markets 7,000 hogs each year. About a quarter of them will end up overseas, and China is a major buyer. Hill says China even offers a market for parts of the pig that don't make money in the U.S., like organs and skin.

HILL: They value some of those variety meats that we don't, and it adds quite a bit to the value of each hog that we sell.

MAYER: That means the new tariffs worry farmers here because they will undoubtedly lead to lower sales. Howard Hill says he's seen hog prices drop to the point where it may cost some farmers more to raise a pig than they can sell it for. The U.S. and China are continuing to draw battle lines for the next round in this fight. Now China has put soybeans on the potential tariff list, and many more farmers grow soybeans than raise pigs.

HILL: That's going to have a huge impact on the farm economy.

MAYER: But Iowa State University economist Wendong Zhang says talk about a big soybean tariff may prove to be bluster. The Chinese don't really want to make soybeans more expensive to import.

WENDONG ZHANG: It will hurt them a lot. I feel that could be one of the nuclear option that they reserve as a last resort. They don't want to use it because it's hard to find substitutes.

MAYER: But Zhang says, at $12 billion a year, soybeans are a juicy tariff target, right up there with airplanes and cars. President Trump insists these moves don't constitute a trade war. He says he's only trying to protect American intellectual property and manufacturing. But some farm-state lawmakers wonder why farmers are always in the crosshairs. Iowa Republican Senator Joni Ernst says she's concerned the president isn't keeping the promises he made to farmers.

JONI ERNST: I support the president's efforts to protect American jobs, but I do wish that the tariffs move would be a more subtle approach where we're maybe phasing it in, we're trying to protect the interests of the American farmer. And that's not what has occurred.

MAYER: Instead, farmers are once again on the front lines of a trade dispute. Threats to agriculture were an opening salvo in the ongoing negotiations over NAFTA, the free trade agreement with Mexico and Canada. But the way commodity markets work, if the cost of soybeans tanks in response to possible Chinese tariffs, the cost of raising hogs will drop. Howard Hill says while some farmers may be anxious over all this, few are surprised.

HILL: Farmers are used to volatile markets, you know? So you have to learn to live with it and do the best you can.

MAYER: Volatility is one thing, but talk of a trade war upsets lots of farmers here in Iowa, and they're hoping for a trade armistice before anybody has to sell the farm. For NPR News, I'm Amy Mayer in Ames, Iowa.

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GREENE: And Amy's story comes to us from Harvest Public Media, a Midwest reporting collaboration.

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