The Journal Gazette
Thursday, January 16, 2020 1:00 am

Hopes get raised at Farm Show

But excitement at new deal with China must be tempered


Wednesday's signing of the first phase of a trade deal between the United States and China eases economic tensions between two of the world's largest economies, a speaker at the 31st annual Fort Wayne Farm Show said.

But Kendell Culp, vice president of the Indiana Farm Bureau, said area farmers should temper their enthusiasm with caution.

Culp delivered the message during a talk, “Corn, Beans and D.C.” that was featured during a lunch meeting attended by about 300 people.  

At present, Culp said, no one knows the particulars of the agreement as it relates to agricultural commodity sales. However, he said, he's seen reports it would boost sales as much as $40 billion to $50 billion between now and the end of 2021.

Press reports Wednesday placed the number at $32 billion.

But any big increase runs the risk of a big drop later on if trade philosophy or political leadership changes, Culp said.

“If you get it too high, it can't sustain itself,” he said of the increase.

He pointed to farm-income increases last year that came about only because they were propped up by federal payments because of the China situation as an example.

Farmers, he said, had averted budget problems, but had better not count on the payments to continue. 

About 40% of net farm income last year came from those payments, he said.

“That is not sustainable,” Culp said. “We've got to figure out how we're going to make that up.”

In an interview after his talk, Culp said farmers' trade with China goes beyond soybeans. Half of all U.S. bean exports had go to China, he said, but China also imports American corn, wheat and even meat.

Lately, he said, China has been aiding U.S. pork producers by buying meat from the United States because its own herd has been decimated by African swine fever.

“One-third of the herd is gone in China,” Culp said, adding the country is the largest pork consumer in the world and U.S. processors are working overtime to supply it with pork products.

For now, he said, farmers' best hope is that phase 1 of the trade agreement turns into phase 2 and beyond that also are favorable for farmers.

Farmers can't take the attitude that they “just want to stay home and farm and be left alone,” said Culp, who farms in Jasper as part of Culp Family Farms. 

“We don't have that luxury these days. We can't just crawl in a cave. We need to be involved.”

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