Downturn in US farming reminiscent of the 1980s

Some say it’s the worst time for US farmers since the 1980s, when thousands went bankrupt.

Downturn in US farming reminiscent of the 1980s

Some say it’s the worst time for US farmers since the 1980s, when thousands went bankrupt.

The plight of small-scale American dairy farmers recently made front page news in USA Today, the most-circulated newspaper in the US, with sales of 2.3m.

Some dairy farmers, like Sue and Chuck Spaulding of Shell Lake, Wisconsin, have started GoFundMe campaigns to get some help from the public.

Many American farmers, not just milk producers, have been plagued by years of low prices; and the newer problems of Donald Trump’s trade wars with China, Mexico and Canada; and record mid-west rainfall seriously delaying planting much of this year’s soybean and maize crops.

Already, Chapter 12 farm bankruptcies have increased from 1,513 in 2014 to 1,940 last year, according to the Federal Reserve Bank of Kansas City.

Many US farmers have several part-time jobs to supplement their income.

Dairy farmers are not spared in the slump, with Wisconsin, a leading milk production state, losing almost 700 dairy farms in 2018, and 40% of them in 10 years. However, big dairy farms have expanded, resulting in US milk production growing about 1.6% per year since 2009. Significantly, that growth slowed this year, and production last March was 0.3% behind March 2018, the first decrease since December 2013.

Meanwhile, President Donald Trump picks trade wars with countries around the world that threaten the livelihoods of many farmers.

The Trump administration recently announced a $16bn trade aid programme for American farmers hurt by the trade war with China, including cash payments totalling $14.5bn to crop, dairy and pork producers.

Agriculture is unlikely to be a major worry for President Trump, making up less than 1% of US gross domestic product, down from about 8% in the late 1940s.

However, rural voters are a worry, after last week’s Purdue University/CME Group Ag Economy Barometer showed farmer sentiment at its lowest level since October 2016.

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