Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Marty Richardson has been a farmer in northwest Missouri for years,
Speaker 2: so many years in fact, that when we asked Marty
Speaker 2: how long it's been, he had to think about it.
Speaker 1: Oh, let's see, I'm seventy three, So if I started
Speaker 1: when I was in high school, whatever, that has up
Speaker 1: to be sixty years fifty five. I lived in the
Speaker 1: house I was born in, and so living on a farm,
Speaker 1: my generational farm here, so I've been kind of farming
Speaker 1: my whole life.
Speaker 2: This is a family business. Marty's sons are also farmers,
Speaker 2: sixth generation, so they've had a front row seat as
Speaker 2: agriculture has evolved in recent decades.
Speaker 1: Used to be in the hog business, but we got
Speaker 1: out of that twenty years ago. And used to be
Speaker 1: in the tobacco business, and we got out of that.
Speaker 2: These days, Marty's focus is on cattle and row crops,
Speaker 2: mostly corn and soybeans.
Speaker 1: Well, I think the twenty five years we had excellent yields.
Speaker 1: We had really good corn, really good beans. Of course,
Speaker 1: the cattle markets an all time high.
Speaker 2: But there's a problem, and it's a big one, a
Speaker 2: threat to his bottom line and thousands of other farmers.
Speaker 1: We're just losing our markets, and then we've lost that
Speaker 1: China market, and combined with high input costs for seed, chemical, fertilizer,
Speaker 1: and fuel, and a farmer can usually stand one or
Speaker 1: the other, but when you get squeezed from both ends,
Speaker 1: it's almost impossible to make any money.
Speaker 2: This week, the White House stepped in to help farmers
Speaker 2: facing that two sided squeeze. On Monday, President Trump announced
Speaker 2: a highly anticipated multi billion dollar relief package.
Speaker 3: We're going to be giving and providing it to the
Speaker 3: farmers in economic assistance.
Speaker 1: And we love our farmers, and.
Speaker 2: As you know, the farmers like me. That relief package
Speaker 2: includes twelve billion dollars in payments money. The US Agriculture
Speaker 2: Secretary of Brooke Rollins called a bridge aid meant to
Speaker 2: help farmers during a difficult time.
Speaker 3: Trump has been saying for quite a while that you know,
Speaker 3: he's going to help farmers. He's not going to leave
Speaker 3: them hurting.
Speaker 2: Aaron Aylworth covers agriculture for Bloomberg. She specializes in the
Speaker 2: grain markets, and Aaron says, this relief package comes at
Speaker 2: the end of what's been a painful year for many
Speaker 2: US farmers, like Marty.
Speaker 3: It's happening now in large part because farmers have been
Speaker 3: struggling for a while, right, and that pressure has just
Speaker 3: been mounting. And farmers are this key voting block for
Speaker 3: the president. They overwhelmingly supported him in the election and
Speaker 3: for the Republican Party, and so with midterms looming, it's like,
Speaker 3: do we want to leave one of our biggest voting bases,
Speaker 3: you know, in pain? And the answer to that, of
Speaker 3: course versus no.
Speaker 2: I'm David Garrett and this is the big take from
Speaker 2: Bloomberg News today on the show, US Agriculture at an
Speaker 2: inflection point, the role farmers are playing in the US
Speaker 2: China trade war, and how much of a difference that
Speaker 2: twelve billion dollar farm bailout is likely to make. I
Speaker 2: have a very basic question that is, at this moment,
Speaker 2: at the end of twenty twenty five, how is the
Speaker 2: American farmer doing?
Speaker 3: Broadly speaking, they are hurting. I talked to a farmer yesterday,
Speaker 3: a Rice farmer, and she was telling me that she's
Speaker 3: been on the phone with a lot of other farmers
Speaker 3: and those conversations, quite frankly, are tearful. People are worried
Speaker 3: about their business, about their family farm, essentially about their
Speaker 3: generation's old legacy. In a lot of cases, right, they
Speaker 3: don't want to be the person to have to close
Speaker 3: the door. And that has created a huge mental tool.
Speaker 2: And I imagine the into bankruptcy as well. It's low
Speaker 2: large for load of these.
Speaker 3: Farmers, that's right. Courtant data shows that Chapter twelve bankruptcies,
Speaker 3: which are for farms, are on the rise, and they
Speaker 3: have been for the last two quarters.
Speaker 2: Aaron says, there are a number of reasons why many
Speaker 2: US farmers are going to bind this year. The big
Speaker 2: one is costs are going up.
Speaker 3: It seeds, it's fertilizer, its equipment, it's everything that you
Speaker 3: need to put something in the ground, watch it grow
Speaker 3: and then harvest it. So those prices are up, Commodity
Speaker 3: prices are down, and then you tack on inflation, right,
Speaker 3: and everything is just topsy turvy.
Speaker 2: Farmer's income is also falling. According to the US Agriculture Department,
Speaker 2: income from selling key crops, including wheat, corn, and soybeans,
Speaker 2: has declined since twenty twenty two. And of course, the
Speaker 2: United States is ongoing trade war with China, which has
Speaker 2: put a wedge between row crop farmers like Marty and
Speaker 2: his biggest customer and put sky high tariffs on critical
Speaker 2: inputs like machinery, fertilizer, and seeds. Could you describe the
Speaker 2: challenges of this trade environment when it comes to farmers
Speaker 2: with what the export environment looks like, and we hear
Speaker 2: a lot about China not fulfilling its obligations when it
Speaker 2: comes to purchasing soybeans. Can you describe the way that
Speaker 2: this administration's trade policies have sort of reshaped the environment
Speaker 2: for soybean farmers in specific.
Speaker 3: So this actually goes back to Trump's first administration, right,
Speaker 3: and a trade war in twenty eighteen and twenty nineteen,
Speaker 3: and that trade war exacerbated a shift that China was
Speaker 3: already trying to make where they're trying to diversify so
Speaker 3: they're not as dependent on the US as a supplier, right,
Speaker 3: And so they started buying more from Brazil, and US
Speaker 3: farmers haven't really gotten that market share back. And so
Speaker 3: now with this administration and the tariff policies again pushing
Speaker 3: China to other suppliers, American farmers are losing out. They're
Speaker 3: losing that market share again. And you saw in May
Speaker 3: China stopped buying soybeans from the US, and that's a
Speaker 3: huge deal because sowebeans are basically the US's biggest agricultural export, right,
Speaker 3: and they go to China. You know, China uses soybeans
Speaker 3: for it gets crushed into soybean meal for animal feed,
Speaker 3: mostly for pigs, and it gets used in soy oil,
Speaker 3: that kind of thing. So it's a big product, and
Speaker 3: so to not be moving US supply to them, it's
Speaker 3: a big gap. It's a big loss of a customer.
Speaker 2: USDA data showed it between twenty twenty and twenty twenty four,
Speaker 2: China has committed to buying between thirteen and twenty eight
Speaker 2: million metric tons of US soybeans each year. In twenty
Speaker 2: twenty five, that number dropped to under half a million.
Speaker 3: And so they stopped buying in May, and that was
Speaker 3: to essentially try and and gain leverage in these trade
Speaker 3: talks with the Trump administration, and I think it largely worked, right.
Speaker 3: They didn't buy in September when the new marketing year started,
Speaker 3: and so September everybody's like waiting for these purchases and
Speaker 3: they're like, oh no. Like the USDA data that comes out,
Speaker 3: you just keep seeing zero zero zero.
Speaker 2: For Marty richardson the politics behind that business shift were clear.
Speaker 1: I hate to say it like this, but he's just
Speaker 1: kind of This country doesn't have a whole lot to
Speaker 1: trade to other countries except food or agricultural products. So
Speaker 1: sometimes in a trade deal we get held hostage the
Speaker 1: American farmer because that's the only thing we got to
Speaker 1: barter with.
Speaker 3: Once Trump and she talked in late October, and you know,
Speaker 3: the Trump administration said, okay, China has pledged to buy
Speaker 3: these twelve million soybeans.
Speaker 2: That's twelve million tons of soybeans.
Speaker 3: The market went nuts, and you saw a huge jump
Speaker 3: in soybean prices, which has started to fade now because
Speaker 3: China hasn't been buying at a fast paced They have
Speaker 3: been buying, but they're still buying from Brazil, and so
Speaker 3: Brazil and South America have become just a you know,
Speaker 3: an increasingly bigger and bigger competitor. And the economists that
Speaker 3: I talked to don't think that that's going to swing
Speaker 3: back to the US, especially not immediately.
Speaker 2: Neither does Marty Richardson.
Speaker 1: I mean, what's odd to China coming back and buying
Speaker 1: beings like they was three or four years ago, slimmed
Speaker 1: to none because They've got that Brazil down there. They're
Speaker 1: raising huge cross and I can't see fuel going down much,
Speaker 1: fertilizer going down much, or seed going down much, or
Speaker 1: john deer going down. I mean, that's called inflation. When
Speaker 1: everything goes up, very few things go back down. And
Speaker 1: corn and beans and wheat and rice and cotton have
Speaker 1: not had that inflationary jump, but the rest of everything
Speaker 1: else has had. You're just not going to see those
Speaker 1: main four or five things that we buy to raise
Speaker 1: a crop. You're not going to see those retreat much.
Speaker 2: The relief package Trump announced on Monday is designed to
Speaker 2: offset some of that lost business in the form of
Speaker 2: one time payments, which will be parceled out to growers
Speaker 2: of certain row crops, including soybeans, wheat, and sorghum, and
Speaker 2: to growers of specialty crops like sugar. In a press release,
Speaker 2: the administration said those payments are intended to help farmers
Speaker 2: whether temporary trade market disruptions and increased production costs, which
Speaker 2: it says stem from Biden administration policies. It's aimed to
Speaker 2: help them stay afloat until investments from the One Big
Speaker 2: Beautiful Bill Act going to effect in late twenty twenty six.
Speaker 2: Aaron says the administration has yet to release key details
Speaker 2: of how the aid is going to be distributed. For instance,
Speaker 2: what kind of relief is each crop going to qualify for.
Speaker 3: That's the biggie. That's really what's going to tell you
Speaker 3: who's getting the most help and who's not. So until
Speaker 3: we have that number, we're a little bit in the dark.
Speaker 3: We know it's coming. The administration has said that they
Speaker 3: expect to deliver all of the aid by the end
Speaker 3: of February or before, so we will see, but we
Speaker 3: are still waiting for a lot of those key details.
Speaker 2: There will be folks listening to this who are wondering
Speaker 2: why farmers are getting this relief package. Of all the
Speaker 2: constituents across this country who have been changing behavior, the
Speaker 2: way they work, the way their business is oper rate
Speaker 2: because of these trade policies, why are farmers being singled down?
Speaker 2: What's your answer to that question.
Speaker 3: I mean, one, they're such a huge, huge voter blood.
Speaker 2: It's a political reason.
Speaker 3: Ye, yes, it is a political reason. They are huge
Speaker 3: supporters of this administration and a key voting base for Republicans.
Speaker 3: So I think that's a big piece of it. Another
Speaker 3: piece of it is. You know, the egg industry is huge,
Speaker 3: and soybeans are the biggest US agricultural export, right, I mean,
Speaker 3: it's it's big business. So I think those two things,
Speaker 3: politics and business, power and.
Speaker 2: Money coming up after the break the politics of US
Speaker 2: agriculture now and historically, and what's at stake for the
Speaker 2: industry if current trends aren't reversed. The trade war between
Speaker 2: the US and China has posed a significant challenge for
Speaker 2: US soybean farmers, but American agriculture has also been impacted
Speaker 2: by changes the Trump administration has made to the federal
Speaker 2: government itself and what it prioritizes. Bloomberg Agriculture reporter Aaron
Speaker 2: Aylworth says the country's farming industry and its politics have
Speaker 2: long been intertwined.
Speaker 3: Agriculture for the US is it's a huge source of
Speaker 3: power and leverage. We had, you know, we've historically had
Speaker 3: this thing called bread basket diplomacy, where we have been
Speaker 3: able to send our surpluses to other countries either as
Speaker 3: aid or we have withheld it as punishment, depending on
Speaker 3: whether you're an ally or an enemy, right, And that
Speaker 3: has been hugely politically helpful for a long time. That
Speaker 3: has been fading away. And that's what I think we
Speaker 3: are watching a piece of right now. Is is that
Speaker 3: kind of shift where you know, we may have been
Speaker 3: the top exporter of corn, soybean, and wheat for decades,
Speaker 3: but are we today not so much? You know, we've
Speaker 3: fallen down in those ranks a little bit. And that's
Speaker 3: what we're watching in real time now. I mean every
Speaker 3: day I start my morning going, is there a flash
Speaker 3: sale of soybeans to China? Or did they buy from
Speaker 3: Brazil and Argentina again? And that's exactly what the traders
Speaker 3: that I'm talking to are watching too. Who's buying what
Speaker 3: and where are they buying from, especially if it's not
Speaker 3: the US.
Speaker 2: I want to stick with this because you're kind of
Speaker 2: indicating that US agriculture played this role in buffeting or
Speaker 2: enhancing the us is ability to project soft power around
Speaker 2: the world. We tend to focus on the business side
Speaker 2: of this, the commercial relationship, But how big a deal
Speaker 2: was that when you look at the agriculture industry broadly,
Speaker 2: the way that it kind of dovetailed with or complemented
Speaker 2: kind of larger diplomatic or geo of political ambitions the
Speaker 2: US had.
Speaker 3: Well, I mean you look at what we did with
Speaker 3: our European allies in fighting Germany, right, and at one
Speaker 3: point getting them food supplies, agricultural supplies was just as
Speaker 3: important as getting them weapons. I think that's a big
Speaker 3: example these days. You know, the US has been known
Speaker 3: for sending so much food aid around the world through
Speaker 3: the UN and other programs. You know, is that changing
Speaker 3: with this new administration of these policies. Yes, right, So
Speaker 3: I think that's that's in part how China was able
Speaker 3: to weaponize soweebeans, if you will, because they know that
Speaker 3: it's a big business and a big part of our
Speaker 3: i think global identity to be this food supplier, and
Speaker 3: so by taking that business away and shifting it elsewhere,
Speaker 3: they had the ability to say, we're not just going
Speaker 3: to swallow this terraf for this policy that you're trying
Speaker 3: to force on us. US.
Speaker 2: I think there's the old line that farmers have to
Speaker 2: be optimist by nature all of the difficulties they face,
Speaker 2: which makes me wonder when you look at the agriculture
Speaker 2: environment today, what is giving them reasons to be hopeful
Speaker 2: about the industry.
Speaker 3: Yeah, they are hopeful for new markets, right, I mean
Speaker 3: I talk to farmers almost every day at this point,
Speaker 3: and they're saying, like, listen, the tariffs are hurting us,
Speaker 3: but at least somebody is negotiating. They have felt like
Speaker 3: they haven't had the best deal in the past, that
Speaker 3: they weren't necessarily getting the fair prices that their crops
Speaker 3: should and so now they see somebody at least trying
Speaker 3: to open conversation and get it new markets. Now is
Speaker 3: that working? You know, depends on who you ask. The
Speaker 3: administration has touted a number of deals that have come through,
Speaker 3: but some market watchers will point out how many of
Speaker 3: those actually have like a written, signed deal behind it.
Speaker 3: That's one of the key things that we're waiting for
Speaker 3: with China is like everyone's like, okay, we have a pledge,
Speaker 3: a commitment. Where's the signed piece of paper that lays
Speaker 3: out exactly what the commitment is and what the rules
Speaker 3: are basically. And until we have that, do we actually
Speaker 3: have a deal? Big question.
Speaker 2: What's at stake for the US if the agriculture industry
Speaker 2: succeeds or fails. So it's under all of these constraints,
Speaker 2: it's a very difficult period. How should we think about
Speaker 2: its importance broadly to the health of this country?
Speaker 3: To the US. You know, before I started this speed,
Speaker 3: I didn't realize just how many things agricultural products are in. Right,
Speaker 3: It's not just the.
Speaker 1: Food we eat.
Speaker 3: It's some of the stuff that's in near gasoline at
Speaker 3: the gas station. It could eventually be used to fly
Speaker 3: your airplanes. Right, it's going into your dog food, it's
Speaker 3: feeding the cattle. It's this massive business ecosystem. And if
Speaker 3: that fails, if that big of an industry fails in
Speaker 3: the US, I think we've got a real problem.
Speaker 2: Marty Richardson in Missouri isn't optimistic that farmers like him
Speaker 2: will ever see Chinese soybean purchases return to where they
Speaker 2: were before the trade war, or that the Trump administration's
Speaker 2: farm bailout will make much of a difference for farmers.
Speaker 1: This bridge that are given us, or this hand out
Speaker 1: some people call it, or welfare, some people call it.
Speaker 1: It's really not even a band aid. Let me use
Speaker 1: this analogy. Your short two hundred dollars in your banking camp,
Speaker 1: and I give you thirty bucks. Yeah, that's going to help,
Speaker 1: but not really so. And I'm not saying he should
Speaker 1: have give everything we lost, Don't get me wrong there,
Speaker 1: but I can't see it's going to do anything.
Speaker 2: He told our producer David Fox that finding new markets,
Speaker 2: both foreign and domestic, is critical for the next generation
Speaker 2: of US farmers. But for the moment, he says, it
Speaker 2: looks like there's a long road to ho.
Speaker 1: I got a grandson, and the way the world is now,
Speaker 1: I'd love to see him farm. But he's only ten,
Speaker 1: so in ten years it's no different. I might tell
Speaker 1: him maybe he needs to do something different. He's going
Speaker 1: to be in the NBA, he told me so.
Speaker 3: I doubt it, but well, at least he's got a
Speaker 3: backup plan.
Speaker 1: There you go, There you go.
Speaker 2: This is the Big Take from Bloomberg News. I'm David Gerry.
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