How soybeans could impact midterm elections
President Donald Trump touted his aggressive approach to trade policy Wednesday at a rally miles from Minnesota’s famed Iron Range, where the administration’s tariffs on imported steel have been welcomed by some in the state’s mining industry.
But in southern Minnesota, where generations of soybean farmers and pork producers are already used to economic uncertainty, Trump’s tough talk on trade has been demoralizing.
The same tariffs that Trump touted on Wednesday have left these growers as collateral damage in an escalating fight with China. Tariffs beget tariffs in the fight, and the Chinese have targeted both American staples, pushing down commodity prices and sinking farm values.
As Republicans and Trump eye Minnesota as a key state for 2018 and beyond, they run the risk that the same tough talk on trade that made Trump so popular in the state might backfire on some of his most loyal supporters.
Time is of the essence, too. While summer is the growing season for soybeans, farmers will begin harvesting in September and October, weeks before midterm elections that will surely be seen as a political referendum on the President.
“This isn’t just numbers on a sheet or percentage of trade or dollar value,” said Michael Petefish, a 33-year old Trump supporter and fifth generation farmer in southern Minnesota.
Standing on the farm he will likely run for the next 40 years, he added, “This is multi-generational American families, your base, that you are now squarely putting into financial peril.”
Petefish is one of the thousands of farmers who have seen the price of their crops tank in the face of escalating trade rhetoric between the United States and China. Growers in the area talk of their farms losing over $200,000 in value as commodity prices slump, all while the back and forth between the two countries has played out like a game of chicken, with each side trying to one up each other by raising the size of tariffs they plan to implement on each other.
After Trump announced that he planned to implement tariffs on $50 billion in Chinese goods last week, the Chinese Commerce Ministry accused the United States of starting a trade war and said it will retaliate. Trump and his top aides have said they are implementing the tariffs to protect American intellectual property, but farmers like those here in southern Minnesota who are now under the threat of Chinese tariffs feel like collateral damage in a fight full of unintended consequences.
“I cringe,” Dale Stevermer, a soybean farmer and pork producer, said when asked about President Donald Trump’s tit-for-tat trade spat with China. “When a tariff even gets talked about, it makes both the buyers and the sellers jumpy. It’s going to impact my bottom line, it’s going to impact my business livelihood, and, to an extent, it becomes a mental outlook.”
Standing on the Easton, Minnesota farm he was raised on, near the apple tree where he met his wife and the fields where he made a living for himself, Stevermer took a long pause.
“It’s hard not to have some down days,” he said, looking out on his 200 acres of soybeans.
Dale Stevermer wouldn’t say who he voted for in 2016, but his wife, Lori, said she voted Republican.
The political irony for people like Petefish and others in southern Minnesota is that they helped propel Trump to the White House, backing the businessman-turned-politician because, in part, they felt he understood their needs better than Hillary Clinton. Trump only lost Minnesota by 2% in 2016, coming close to becoming the first Republican to win it since Richard Nixon.
Farmers in the area are not ready to say they regret their vote for Trump but are closely watching how they will fare in the intensifying trade fight as they consider whether to break with the Republican Party in November.
“We have got about a month and a half where we can play with this thing and then after that, these prices have to be corrected, so we urge the administration to do what it has to do and do it quickly,” said Tom Slunecka, the CEO of the Minnesota Soybean Association. “If we get into harvest with prices like they are, it will decimate much of farm country.”
And it is not just Minnesota that will be impacted. States like Iowa and Illinois, both of which feature top House races this November, produce millions of bushels every year.
“Right now, people are overcome with risk,” said Dan Feehan, the Democrat vying to represent southern Minnesota in Congress come November. “Those who chose to vote for the President two years ago did so because they felt anxiety about what their future and have seen things get worse.”
Soybeans, whose prices hit a nine-year low amid trade fears with China this week, are critical to the economy of bucolic southern Minnesota and the biggest export for the entire state. Driving down the backroads leading to Petefish’s farm in Claremont, row upon row of growing soybeans can be seen for miles.
It feels a world away from China, but the ties run as deep as the rich soil. According to the Minnesota Soybean Growers Association, every third row of soybeans in the area ends up in China, feeding a market hungry for American soybeans.
Petefish is considered a young farmer and he hopes one day to pass his farm onto his children, much like he father is doing right now with him.
Right now, though, Petefish says the slim margins in farming make it hard to convince young people that farming is a profession worth their time. Every morning he wakes up and checks two things: The weather and the price of soybeans. Over the last two weeks, as soybeans tanked, he said his farm value has lost around $250,000.
It’s often tough to accept.
“Ever lost $100 at the casino? How does that make you feel? Ever lost $500 at the casino? You go home and say, damn, I shouldn’t have done that,” he said with a laugh. “A quarter of a million dollars in the last two weeks, somehow you have to find a way to sleep at night.”
Petefish, like many of his neighbors, voted for the President in 2016 but also voted for Tim Walz, the Democratic incumbent congressman who won narrowly even when Trump won the district by 15%. Walz is now running for governor, opening up the seat for an expected race between Feehan and Republican Jim Hagedorn, a former Republican aide in Washington whose father, Thomas Hagedorn, represented part of Minnesota for almost ten years in Congress.
Hagedorn has acknowledged the issues troubling soybean farmers but has sought to use the issue as a way demonstrate his trust in the President and accuse Democrats of seizing on the issue for political reasons.
“The Democrats are stepping up in a short-term way and trying to use the issue,” Hagedorn said. “The President campaigned on these issues, he has a negotiated in ways that no one else understands and he is going to do what he thinks is best.”
He added: “Hopefully he (Trump) understands in the end that we are all taken care of, not just one industry over another, but all of them.”
Trump’s tariffs have split Minnesota between the steel industry favored by the tariffs and farmers who feel like the victims of unintended consequences.
“Soybean famers feel as though they are carrying the brunt of these negotiations,” said Slunecka, the head of the state’s soybean trade association. “Come this fall, if prices remain low, I can only imagine it will create a large amount of pressure on the Republican Party.”
While Trump will tout his tariffs on Wednesday as the best way to protect miners in northern Minnesota, those farmers will be taking stock of their homesteads.
The White House, through trade policy aide Peter Navarro, has pledged to take care of farmers like the Stevermer and Petefish.
“President Trump will have the backs of all Americans who may be targeted by Chinese factions,” Navarro said, adding that Agriculture Secretary Sonny Perdue and his team “have been working on measures that will have the backs of farmers.”
Navarro wouldn’t reveal details to reporters, leaving Petefish feeling like a pawn in a game he never wanted to play.
“They are playing a chess game,” he said. “I don’t feel bad when I lose a pawn in chess if it helps me get check mate. I’ll sacrifice pawns all day long. So if you think something is a pawn, it is a willing sacrifice you will make. But if you are the pawn, that really sucks.”