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Trump trade war causing farm bankruptcies to surge in upper Midwest

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donald trump make farmers great again
US
President Donald Trump participates in a round-table discussion
with business leaders at Northeast Iowa Community College on July
26, 2018 in Peosta, Iowa.

Scott
Olson/Getty Images


  • At least 84 farms in the upper Midwest filed for Chapter 12
    bankruptcy in the year ending in June, according to a new
    Minneapolis Federal Reserve analysis.
  • That’s more than twice the level seen over the same period
    four years ago. 
  • Tariffs have added pressure to already low margins for
    farmers.

As President Donald Trump
maintains protectionist policies with global trading partners, an
increasing number of farms in the Midwest are struggling to stay
afloat.

At least 84 farm operations in
Minnesota, Montana, North and South Dakota, and parts of
northwestern Wisconsin filed for bankruptcy in the 12 months
ending in June, according to a new analysis from the Minneapolis
Federal Reserve, more than twice the level seen over the same
period in 2014.

The strain of low commodity
prices on farmers and ranchers has been compounded by tariffs,
Ron Wirtz, regional director for the central bank, said in the
report. Trump has placed tariffs on more than $300 billion worth
of imports to date and threatened his policies could further
escalate on multiple fronts.

As countries retaliate agains the
Trump administration with duties on American goods, key commodity
prices have fallen sharply.


Soybeans

, for example, have shed nearly a fifth of
their value since April. The New York Times
reported
this month that exports of the legume to China fell
94% through mid-October from a year earlier.

Farming margins have been
“squeezed for some time, so the tariffs are certainly just more
problems on top of a list of continuing problems,” said Kevin
McNew, chief economist at Farmers Business Network.

States in areas where
bankruptcies are on the rise are especially vulnerable to trade
tensions with China, McNew said, which placed retaliatory duties
on American soybeans earlier this year. While growers in other
parts of the country have other foreign markets to turn to, the
upper Midwest is highly dependent on soybean trade with
China.

And in Wisconsin, where about 60%
of all farm bankruptcies were filed, there are more small-sized
farms that tend to be particularly vulnerable to price
changes.

Falling prices have also exerted
pressure on farming finances throughout the rest of the Midwest,
with more than half of respondents in a

Kansas City Federal Reserve

survey

reporting lower farm income than a year
ago

.

Trump is expected to meet with
Chinese President Xi Jinping at the G20 summit in Argentina
starting Friday. But the president and his administration,
asserting tariffs will pressure other countries to change trade
practices seen as unfair, have


cast doubt

on negotiations in recent
days.

Lack of optimism for a resolution
has weighed on farmers’ outlooks for the rest of the year and
beyond. In Missouri and Nebraska, more than 70% of survey
respondents anticipated incomes would continue to fall throughout
the next three months.

“I would say we’re on the start
of something and not the end of something,” McNew said. “There’s
just nothing on the horizon that really suggests things are going
to get better.”

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