Comments from the cow side on the trade war...

Discussion in 'Commodity Futures' started by Overnight, May 13, 2019.

  1. Overnight


    Fresh off the press at the Agcenter…


    A trade agreement with China will occur for good reason. It is more important to the Chinese than to Americans. We export $179 billion dollars of goods and services to China while they export $557 billion dollars of goods and services to the United States. Their theft of our intellectual property is legend and other unfair trade policies must be stopped. One of the largest industries to be harmed is American agriculture.

    The leading export product is soybeans necessary for feeding the enormous pig population that has been a staple for the Chinese diet. This is followed by cotton and skin and hides. Next, and due to rise in the near future is pork, to replace lost pig to the African Swine disease. Our largest pork company Smithfield is owned by the Chinese. Beef only represents 10% of Chinese red meat consumption but is fast growing. These ag products represents sales of almost $10 billion dollars.

    The Trump trade wars have taken a toll on our beef exports to China. Hong Kong is the gateway for much of the beef moving to China and in the latest reporting period, our exports to Hong Kong were down 46% from prior year. This number helped set the stage for an overall decline of 6% in exports this year of our beef products. This comes at a time when we badly need excess supplies of beef to find an outlet abroad.

    President Trump assured American farmers on Friday that he will establish new subsidies to help farmers weather the bad markets caused by Chinese retaliation. Beef producers were not mentioned as recipients of help but their markets are suffering proportionally large declines from lost sales to China. Any subsidy programs runs the risk of being gamed by participants. The government never seems able to design the programs to target the right groups at the right price.

    The light at the end of the tunnel for beef producers has been the hope beef would replace some of the lost pork production in China. It is unrealistic to believe our pork producers can replace the enormous size of the disease losses in China. Beef prices are now under last year and would fit as a preferred option for Chinese consumers. The excess supplies of our beef also could contribute in a meaningful manner to increased preference for beef at the expense of pork in China as more consumers find compelling the taste and cost of beef.

    The trade talks disbanded without progress but the need for an agreement remains and behind the scene discussions will set the stage for additional talks after the bluster has subsided and self interest prevails. Meanwhile our ag markets are being yanked around with the kind of volatility no one enjoys. "
    pitbase and matthewyoung like this.
  2. newwurldmn


    This is a very dumb article. He says China needs a deal more than the US. But the next 4 paragraphs are about how US farmers are getting screwed.
    beginner66 likes this.
  3. Here4money


    They want to have their cake (back trump) and eat it too (delude themselves & others that they're not hurting).
    comagnum likes this.
  4. volpri


    Anyone can see china gonna get the whiplash and has to most to lose. USA will win this. Mr T is da man. Making America Great Again.
  5. newwurldmn


    While I am pro-trade war, I do not think the American people will win. Trump will claim victory like he did with his re-negotiation of nafta.

    But how’s that foxcon plant in Wisconsin going? Or the carrier plant in Indiana.
    Seaweed likes this.
  6. bbpp


    Last edited: May 13, 2019
    AKUMATOTENSHI and comagnum like this.
  7. volpri


    matthewyoung and dozu888 like this.
  8. Seaweed


    Exactly right. What does it even mean to win? Clearly not every American citizen and not every sector of the economy can ever win. Heck, Wallstreet has been winning for years, but how is Mainstreet doing?

    So I'm not really sure what winning even means. Maybe 10 years down the road it becomes more apparent who the actual winners and losers were.
  9. All we need is a backbone and some pride.
    Stockolio and dozu888 like this.
  10. JSOP


    The tariffs are actually good for the agriculture industry of America. Agricultural products are like oil, you are not supposed to overproduce. The more you overproduce, the less revenue you are going to earn. So the way to manage the agriculture industry is not through subsidization by the government so you can sell it cheap and still make money. No you are supposed to restrict production, go all organic and charge a high price to make money so the government won't have to subsidize you all the time. If people can't afford to buy food, that's good. Stop eating too much!! Overeating is the no. 1 cause of obesity, cardiovascular disease and even cancer. And restricting agriculture production especially cattle industry will also reduce Co2 emission, another win for the environment. This is what the agriculture industry is supposed to do long time ago now the tariffs is just doing it for them. And then resources used for agriculture can gradually shift to other aspects of economy like high tech development which is the money-making venue of the future. At the same time, it makes people healthier by discouraging overeating and improves the environment. Tariffs is a win, win, win situation for everybody. All those farmers just need to quit whining and realize that their sons and grandsons are not going to be farmers anymore and will be computer scientists, still making their dads and granddads proud.
    #10     May 14, 2019