R.F.D. NEWS & VIEWS: Cuba market, Illinois beef farmers and more

By Tim Alexander for Chronicle Media

Jill Johnson is the new executive vice president of the Springfield-based Illinois Beef Association. (IBA photo)

Fallout from Chinese tariffs on U.S. agriculture products continued this week, with the export tax on U.S. soybeans yet to go into effect. Meanwhile, soybean growers are looking elsewhere to make up potential lost revenue due to China’s impending 25 percent tariff. Also this week: The effect of Chinese tariffs on Illinois’ economy will not be as profound as on some neighboring states, according to an analysis. For these and more news items of interest to farmers and rural dwellers, please read on …

Soy Growers revisit Cuba market

BLOOMINGTON — Facing reduced or nonexistent future sales to China because of the impending 25 percent tariff imposed on U.S. soybean imports, Illinois Soybean Growers are resuming their push to open up trade relations with Cuba. The election of a new Cuban president last week has reignited hopes that soybean growers can expand upon the $50 million of soy exported to Cuba in 2017, said ISG president Lynn Rohrscheib of Fairmount, who has visited Cuba as part of a soy growers delegation seeking to increase reciprocal trade.

“Cuba is a significant market for Illinois soybean farmers like me who rely on export markets for their livelihood,” Rohrscheib stated in an April 17 ISG news release. “We believe with better trade relations and policies, the U.S. should increase its market share.”

ISG members have traveled to Cuba 11 times since 2012, but improved trade relations promoted by the Obama administration were stalled when Donald Trump announced early in his presidency that further negotiations with the island nation would be discontinued. In light of the Chinese soybean tariff and new Cuban leadership, ISG are now asking the Trump administration to revisit the issue. “We are looking forward to working with the new (Cuba) administration to foster relationships that help both our farmers and the Cuban people. We believe that improving trade relations between the U.S. and Cuba is the foundation for future success,” Rohrscheib said.

U of I: Tariffs will produce ‘significant’ cash flow loss

URBANA — The effects of China’s soybean tariff will have a significant impact on the financial position of central Illinois grain farms, according to University of Illinois and Ohio State University economists. “Such a tariff would result in lower soybean prices and have numerous price and cost effects,” reported six agricultural economists cited as contributing the the study, “Impacts of Chinese Soybean Tariffs on Financial Position of Central Illinois Grain Farms,” published by the U of I Department of Agricultural and Consumer Economics farmdoc website on April 17. “Our analysis indicates a 25 percent tariff would result in a serious deterioration of cash flow. An attendant 20 percent farmland price decline would result in more than a $500,000 decline in the farm’s net worth by 2021.”
Cash rents would need to decline to offset some of the anticipated losses, according to the economists. Some farms could be in even worse shape if the soybean tariff takes place. “The 25 percent tariff would have larger negative impacts on farms with higher debt levels and higher amounts of cash rent. The reverse is true as well. Farms with lower debt levels and lower percentages of cash rents would fare better,” they wrote.

Farm operators should be prepared to reduce cash flows and likely restructure debt, the economists advise.

Illinois Farm Fact:

Agriculture contributed $1.4 billion and 3,556 jobs in Tazewell County during 2015. (Ill. Agricultural Economic Contribution Study)


Report: Illinois tariff impacts small, for now

ANDOVER, MA. — The overall impact of Chinese agricultural tariffs on U.S. exports will not be as severe in Illinois as in some other states due to its small share of farm income and large metro areas. This is the conclusion of IHS Markit regional economist Tom Jackson, who said last week that while the 25 percent tariff on pork, enacted April 1, and 10 percent tax on fruits and tree nuts will not be very impactful, the proposed 25 percent tariff on soybeans (pending negotiations) would be more harmful.

States in the country’s midsection — Nebraska, Iowa, South Dakota — would have the most exposure, with farm income accounting for more than three percent of total personal income in the state. “Some states with very large agricultural industries, such as Illinois, have small shares of farm income as a percent of total personal income because of their large metro areas,” Jackson noted. “Outside of the middle of the country, California and Washington will see tariff impacts as they are major producers of fruits and tree nuts that are on the initial tariffs list.

“If the broader set of sanctions on around $50 billion worth of U.S. exports to China goes into effect, however, then the impacts will be more economically significant. In the interim, the policy uncertainty will continue to roil the business plans of manufacturers, farmers, and other capital-intensive industry segments that feature long-term planning horizons.”

Illinois Beef promotes from within

SPRINGFIELD — The former communications manager for the Illinois Beef Association is now the organization’s executive vice president. Jill Johnson, who grew up in Henry County on a cow-calf, feeder and row crop farm, became the IBA communications manager in 2012. Her promotion, effective April 1, means Johnson will lead, manage or support all functions of the IBA.

“This is a great day for the IBA and Illinois’ beef industry,” said Joni Bucher, IBA president. “Jill not only brings a great deal of passion and energy, and a strategic vision to our organization, but also a detail-oriented, hands-on approach to leadership that will ensure our resources are focused on continuing to serve our members and build demand for beef through education, communication and marketing.”

Johnson was active in 4-H and FFA showing cattle and judging livestock. She earned an associate of science degree from Black Hawk College and bachelor’s degree in agricultural communications for the University of Illinois. Congratulations Jill!



–R.F.D. NEWS & VIEWS: Cuba market, Illinois beef farmers and more–