RITZVILLE – From apples to bank loans to the unloading of grain trucks, representatives from the region’s agricultural sector voiced concerns to Sen. Patty Murray, D-Wash., on Wednesday in a frank discussion on the trade war and its impacts on Washington growers.
Murray said she wanted to come to wheat country to hear straight from those on the front lines about the impacts of the trade war, sparked by President Donald Trump’s decision earlier this year to place tariffs on steel and aluminum. That decision resulted in a series of retaliatory tariffs that have ensnared the full spectrum of Washington’s agricultural industries.
“I want the President and his team to get a good agreement,” Murray said. “But … utilizing tariffs is a very blunt instrument. It’s having a huge impact industry- wide. If people are not planting and we are losing markets and bank loans aren’t coming through, then that’s a huge hole.”
Mike Miller, who said he got off his combine to attend the meeting, said not all the news was bad: the price of wheat has been climbing because of weather impacts in Australia and Russia. But Miller, the chairman of the export market development organization U.S. Wheat Associates, said the price relief will probably only be a short-term reprieve to a much larger problem for Washington farmers, who export about 93 percent of their crop.
Miller described how he attended a meeting last winter in Japan with officials in charge of purchasing wheat shortly after the U.S. pulled out of the Trans-Pacific Partnership.
“They laid out their game plan and it didn’t include the U.S.,” Miller said of the Japanese officials. “When you lose a market, what’s it take to get it back? I think that’s the largest concern around here. Tell us what the rules are and we’ll go out and try to maintain. But we don’t know what the rules are.”
Mark Powers, president of the Northwest Horticulture Council, said the cherry crop just finished, but growers haven’t yet been paid for their crops, so the economic impact of the trade war can’t yet be quantified.
For cherries, “China is the largest export market and we had some significant impacts there,” he said. “The next decision will come from the apple guys. With questions about labor and prices, what varieties do they pick? Do they leave some on the tree?”
Murray asked how the trade war was affecting apples, most of which have yet to be picked.
“The sales are off and pricing is off,” Powers said. With China closed, “some growers are saying they are not making the investments they were planning to make.”
Apple, cherry and pear growers have to spend about $50,000 to replant a single acre. Farmers must plan those decisions years in advance and are limited by what money they have in hand or the ability to secure loans to build their crops, he said.
And fruit growers are not the only ones facing doubts, Miller said.
“You have farmers that are going to lending institutions saying, ‘OK. Here’s where I’m at today. Are you going to stick with me if this is long term?’” he said. “And lending institutions are saying, ‘Wait a minute here. We are just healing up from the last one.’ We have this uncertainty, and banking doesn’t like uncertainty.”
Stacy Kniveton, a former potato farmer who is a member of the Washington State Potato Commission, said other commodities, like hay, have seen a mixed reaction to export markets.
“Timothy (hay) is still going strong even in Japan and Korea, but alfalfa just dropped off,” Kniveton said. “With the last round of tariffs, the Chinese just said ‘No’ and that’s a big chunk of the market.”
“I’ve talked to a lot of growers,” Kniveton said. “Everybody thinks these deals need to be renegotiated. But we need to do it quick.”
Marva Ulleland, the vice president of operations for Northwest Farm Credit Services, said the farming economy can offer challenges in the best of times. Lower prices for growers means less money going to fertilizer companies, truck drivers and local stores.
“It takes just a very delicate imbalance in rural America with the price of a commodity, whether it’s apples in Yakima or wheat here, before you see jobs” lost, she said. “ …The margins are thin. They are very thin.”