Tough trade talk could have dramatic consequences
as President Trump's moves on China escalate.
But Iowa's farm economy could be caught in the
crosshairs.
We sit down with the Iowa Farm Bureau's Craig Hill
and pork producer John Weber on this edition of
Iowa Press.
Funding for Iowa Press was provided by Friends, the
Iowa Public Television Foundation.
The Associated General Contractors of Iowa, the
public's partner in building Iowa's highway,
bridge and municipal utility infrastructure.
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For decades Press has brought you
politicians and newsmakers from across Iowa and
beyond.
Now celebrating more than 40 years of broadcast
excellence on statewide Iowa Public Television,
this is the Friday, April 6 edition of Iowa Press.
Here is David Yepsen.
Yepsen: Throughout a nearly two year campaign
for the White House, Donald Trump railed
against China as a trade partner in need of tough
negotiations.
But now 14 months into his presidency the talk has
become trade policy with tariffs against China
beginning to spiral towards a trade war.
Reciprocal tariffs from the crucial Chinese market
for Iowa pork, soybeans and more could have
devastating consequences on Iowa farmers and our
state's economy.
To check the pulse of the farm sector, we're joined
by Iowa Farm Bureau President Craig Hill and
John Weber, past President of the Iowa Pork Producers
Association and the National Pork Producers
Council.
Gentlemen, welcome to Iowa Press.
It's good to have you with us today.
Weber: Thank you, glad to be here.
Hill: Glad to be here.
Yepsen: Across the table, Erin Murphy is Des Moines
Bureau Chief for Lee Enterprises and Kay
Henderson is News Director for Radio Iowa.
Henderson: Gentlemen, you're both active
farmers.
Craig, what was your first reaction when you heard
that the tariffs were going on?
Hill: Well, there's been many, many proposals that
have gone on this past week and I tell you, I
woke up Wednesday morning to a 50 cent loss in
soybeans, a 17 cent loss in corn, that's 5% of the
market.
And agriculture is very vulnerable today.
We're at a very fragile place.
I don't want to say we're unstable.
We are not.
But we've had four years of declining farm income,
twelve year record low farm income.
The pork producers have done pretty well but corn
and soybeans have not done so well.
We have grown our way out of this, our economy is
fragile and then this proposal comes along and
wipes out what would be any potential for profit
for the year.
So it's very alerting and a very scary proposition.
Henderson: John?
Weber: Yeah, I was listening to a radio
program on the way down that said this was the
longest, it seemed like the longest week and I
feel a little bit that way in what has happened here
in our business.
But pork was one of the first sectors to have the
tariff announced early last week.
And by the way, the pork tariff is implemented, it
is added to what we're already paying going into
China.
And so as you commented earlier we have been
anticipating this possibility of happening
for almost two years, a year and a half to two
years now, with the tough trade rhetoric that went
on through the campaign.
So it was a day of reckoning.
It just shows how critical, and vulnerable
as Craig said, we are in agriculture to these type
of events.
Henderson: Craig, you have people from the Trump
administration saying ho, ho, ho, we're just
negotiating, this $100 billion that we just
slapped on, talked about on Thursday night, is not
actually implemented yet, we're just in the
negotiating phase.
Does that make you feel better?
Hill: The cavalier comments that came from
Wilbur Ross, our Secretary of Commerce, when he said
even shooting wars end in negotiation, well shooting
wars don't end in negotiation, shooting wars
end in casualties and collateral damage.
Whether it's a victory or a defeat or some
settlement we are in a trade war and trade wars
don't end well, they're unpredictable.
History doesn't show a very good light on
positive outcomes from trade wars.
It led into World War II, the Smoot-Hawley Act,
Depression, the embargo by Jimmy Carter in 1980 led
to the farm depression.
This is not a very good place to be in a trade
war.
They're unpredictable, the duration, the impact.
So I'm a little taken back by this attitude that has
come from the White House.
This is a very serious matter and Iowa is going
to be the first casualty, agriculture, Iowa,
soybeans, pork.
This is what is going to hit the hardest.
And so the target is on farmers' back and it's a
very bad place to be.
Henderson: John, you keep nodding your head.
Weber: Yeah, well the impact is very real.
Markets do not like uncertainty and that's the
period we're in.
We're in a very uncertain period as to the future of
exports.
Are these tariffs going to be implemented or are they
not?
And that is the price we have to pay to get through
this period until negotiations are held or
until we find out what is going to happen and
certainly hope for the best case scenario.
Murphy: So you talk about that impact.
What is that?
What is going to happen?
What are Iowa farmers worried about?
Maybe especially the younger farmers who are
just getting in and don't have their operation built
up as some of the larger operations.
What are the tangible effects of this?
Weber: I think those folks are the most vulnerable.
Obviously we have encouraged our producers
to be prepared for the possibility of this
happening but you can only prepare so much.
And the thing I think we often forget is these
types of negotiations are long-term.
They're not something that happens in a week or a day
or a short period of time.
It will take a long time to recover from the
tariffs that have already been implemented, they're
already talked about, and these negotiations are
long and tough and difficult and we are
entirely dependent on trade in the state of Iowa
and as pork producers in particular.
Murphy: Yeah Craig, you're a farmer yourself, you
talk to farmers all the time obviously.
What are they saying?
What are the concerns out there?
Hill: It's very concerning.
They're very anxious, very apprehensive.
There was a sliver of a prospect for hope of
profit this year and that has been dashed away,
particularly for pork producers.
And I'm a pork producer, we lost $20 a
hundredweight pretty rapidly after the 23rd of
March and the future looks very glim.
These trade relationships are built over time,
decades, rules are drafted, we have the WTO,
we have agreements, free trade agreements all
around the country.
We have disposed of TPP, set that aside.
NAFTA negotiations going on, KORUS, Korean, that
was not signed by the President after it was
finally negotiated.
So we're in limbo.
This is a very bad time for agriculture.
Yepsen: Mr. Weber, explain to a lay audience, a
non-farm audience, what it means to a young pork
producer.
What is the value of a hog?
What has happened to the value of a hog?
Are they making any money?
Explain how this works.
Weber: Okay, well I can kind of summarize a couple
of things.
The pork industry has come through a period of
relatively good, stable profitability since 2014
after the feed prices declined and we got
through the episode of PED-V.
We have come through a rather long period of
profitability in the pork industry, one of the
sectors in agriculture that has continued to do
well despite some really marginal returns in the
row crop sector.
All through that same time period our organization
and our industry, we focus on export markets, that's
our job.
Free trade agreements we have worked diligently on
and I've often said that we're building up a little
enthusiasm here in our industry and then suddenly
starting 18 months ago we had the new investment in
the processing side of our industry with the five new
packing plants being announced, a couple of
them here in the state of Iowa.
And so there was this hidden enthusiasm for
producers to keep going.
And if you looked at the most recent hogs and pigs
report this industry is still in a growth mode in
preparation for that.
There was a lot of enthusiasm and
anticipation about participating in a whole
new marketplace with TPP.
Obviously that was done away with or bowed out of
and we invested a lot of time and resources into
TPP so it kind of dashed the hopes of a lot of
producers.
And now the continued rhetoric on trying to
rebalance existing free trade agreements, as Craig
mentioned we got through renegotiation of the KORUS
agreement, we're still very uncertain as to what
is going to happen with NAFTA.
If we have difficulty in NAFTA it would be
catastrophic for U.S.
agriculture.
Yepsen: You mentioned three different trade
agreements that have been scuttled or are being
reconsidered by the Trump administration.
Mr. Hill, I want to ask you a hard question here.
Rural America voted for Donald Trump.
Did you make a mistake?
Hill: Oh I wouldn't say we made a mistake.
I would say that we will see what the outcomes are
and I think if producers are damaged to the extent
that I think there could be there will be some
minds changed.
Currently I don't see a ground swell of
anti-support for the Trump administration.
But I will tell you if what I think could happen
does happen it will not play very well at all.
Yepsen: John, same question to you.
Weber: I would have to say the same thing.
I don't think producers are willing to give up on
the Trump administration.
I visited with my neighbors and friends and
neighbors all the time and think there's a lot of
positive things that this administration is doing
and certainly has done for agriculture, especially on
the regulatory side, has done a lot for us.
And it takes tough negotiations.
I think agriculture is willing to do its part in
the near-term but when you're the pawn that is
being played with or moved it becomes very, very
serious.
Murphy: Well, and Craig you mentioned Iowa could
be one of the first to be impacted by this.
These tariffs also include cranberries, which will
hit Wisconsin, auto making which will hit Michigan.
It sounds to me like China is reading an electoral
map.
Hill: About $19 billion goes to China from the
U.S.
in terms of ag commodities and $12 billion, $12 to
$14 billion of that is soybeans.
We're the number one, or number two, soybean
producer, we volley back and forth with Illinois.
Pork we export 25%, 27% of our pork.
Corn, China just took on an ambition to have 10%
ethanol blend in all of their fleet vehicles by
2020.
That's going to take a billion bushels of corn,
which they don't have.
So all of these things come right down to center
in honing in on Iowa and Iowa's farmers worse than
any other part of the country.
Murphy: And I ask because if you add those other
states you're talking about states that the
President won in this last election and in some cases
flipped.
Is China playing a political game here?
Are they playing a game of 3D chess to the
administration's checkers?
Hill: Oh sure, and we had initially $3 billion in
tariffs and $50 billion tit for tat another $50
billion, $100 billion announced Friday, April
6th and there's not $100 billion to put a tariff on
or a tax on, on goods coming into the U.S.
So what will China do?
You can't, this cascade of events may get completely
out of control.
Henderson: The President -- Weber: One thing I
would say that would hold the glue together for this
administration would be to get some positive news for
producers and for farmers on trade.
We need to begin negotiations on bilateral,
he stressed throughout his campaign the importance of
bilateral free trade agreements, negotiating
one-on-one for good trade deals with other countries
and we would really support that, we would
really get behind that, we will be there to help
negotiate new free trade agreements.
But it's time, it's time to get these started.
Henderson: The President said he had directed Sonny
Perdue to come up with a shield for farmers.
Does that mean crop insurance is going to
apply to manmade disasters, Craig?
Hill: Well, I don't know how you indemnify
producers.
We're not one dimensional farmers.
Different farmers are going to be impacted in
different ways.
The Farm Bill is yet to be drafted.
There's no money, Congress doesn't have the money to
fix this.
So there's a lot of problems.
I don't know how you make farmers feel better with a
promise of some reward from government and it
will be years before that happens.
Murphy: So the flip side of this all is, when you
talk to leaders here in the state, is that they
acknowledge there is an issue with some of the
trade relationship with the U.S.
and China, intellectual property, so there are
steps that need to be taken.
They just don't, as you mentioned John, they just
don't want ag to be held as a bargaining chip in
that.
So what is the administration to do?
How do you tackle some of those things without
disrupting the Midwest ag economy?
Weber: Well, you often think that there should be
other avenues or political means of solving these
issues whether it's the WTO, trade disputes, those
kinds of things.
All of those take a significant amount of
time.
It seems to have been the practice of this
administration to call people out on the table up
front and negotiate later.
Maybe that tactic will work but believe me it's a
very uncomfortable time for those of us that are
involved.
Yepsen: Mr. Hill, what is an American President
supposed to do?
The Chinese have been stealing intellectual
property from this country for years, there's no
arguing about that.
What other things could a President do?
Hill: I think there's lots of options other than a
trade war.
Yepsen: Give me some examples.
Hill: To give an example direct to trade, the
reason you negotiate over years and come to
agreement on a trade agreement is so you have
dispute resolution, you have rules to the game,
you have standards of which everybody abides to
with penalties.
The WTO, NAFTA, there are dispute settlement
mechanisms there if you have grievances or
problems.
And so you don't blow it up and renege on your
agreement to create a new one, actually you go back
to the original agreement and go through the
process.
Weber: And I really think a little bit of a mistake
that may have been made, agriculture has been the
number one sector of this economy that has helped
offset the trade deficit and yet we become an easy
target.
Yepsen: Talk about the ripple effects of this.
Mr. Hill, the old saying is if the farmers don't
make it in Iowa nobody does.
Is that still true?
What is the effect on rural communities out
there that are already struggling?
Is there a future for young people in farming?
Big questions.
Hill: It is said that about 10% of Iowa's jobs
are export related in terms of agriculture, but
it grows to 20%, it's hard to put a fence around what
is agriculture in Iowa, financial services and a
whole host of other industries, manufacturing,
so it may be 20% of our workforce is dedicated to
an export proposition of some fashion.
And so yeah, it affects Iowa greatly in all of our
communities, all ages, all investment.
It affects our bankers.
How timid will they be now to make investment and to
allow young producers to borrow money?
Weber: The ripple effect to me is huge.
It's also almost more than individual farmers.
And one other thing I think we need to remember
and remind producers of that I think is going to
actually have more of a financial impact on
producers is the cost of the tariffs that were
implemented or will be implemented on steel and
aluminum.
Some of the stories I'm already hearing from
Midwest suppliers of ag equipment, grain bins,
buildings for pork producers are just
escalating rapidly.
And I think that is going to have a huge impact on
future plans, future growth of the industry.
That impact may very well have more of an impact
than a country imposing tariffs on our product.
Henderson: Craig, speaking of growth, farmers
probably aren't going to be planting in the snow.
But will they change and plant corn instead of
soybeans?
Hill: I don't know if we're going to shift any
planting decisions in Iowa.
We may, on the margins of the country there may be
some shifting of acres.
But most of our planting intentions are made and
until we get after the 1st or 5th or maybe even 10th
of May there won't be probably a whole lot of
shifting.
Henderson: Will pig numbers drop?
Weber: We're certainly not in that mode today and we
don't want to be in that mode.
It is our goal to negotiate free trade
agreements.
The growth of our industry is entirely dependent on
future export markets.
We are already exporting 26% and we need, if we're
going to grow our industry, keep it stable,
we need to have access to these countries.
Henderson: Real quickly, we have been focusing on
China, but you mentioned NAFTA and pork, boy.
Weber: NAFTA makes this discussion seem minute.
Hill: 50% of all of our pork goes to either the
NAFTA countries or Korea, South Korea, so those
three countries are 50% of our pork exports.
Henderson: Gentlemen, Craig, if we could shift
just quickly.
There was action at the legislature this week
where the Governor has signed a bill that will
let Farm Bureau sell a Wellmark product called a
health benefit plan.
Will farmers, independent farmers out there be able
to buy this if they have diabetes or --
Hill: Well, so the Iowa Farm Bureau has provided
benefits to members for 100 years.
We're a century old organization as of this
year.
But for nearly 50 years we have been a partner with
Wellmark.
We have provided health insurance to our members.
In 2014 when the Affordable Care Act took
effect we were disqualified from offering
that benefit to our members.
What we're doing is restoring that opportunity
for us to work with our members and work with
Wellmark, to partner with Wellmark --
Henderson: Do you know what you're going to
sell to people now?
Hill: This is the individual marketplace.
Employer plans, we're probably not going to have
people coming from an employer plan.
The subsidized Affordable Care Act guaranteed issue
contracts.
We're not going to be bringing those people
over.
It's going to be that farmer, that self-employed
individual, that small business owner with an
individual policy that is looking to save what we
hope to be maybe half of their premium in another
product.
Murphy: Is there a danger that you'll be siphoning
healthy people out of the individual marketplace and
causing -- Hill: This just provides another option.
Every individual can look at their choices and they
can make a decision.
We think that we can provide a benefit to our
membership and that is what we're pursuing.
It has been done in Tennessee, the Tennessee
Farm Bureau currently does this.
There's maybe other models but that is the one that
we looked at primarily.
Yepsen: I've got to leave it at that.
We're out of time.
Thank you both for taking time to be with us today,
appreciate it.
Weber: Good.
Hill: You bet.
Yepsen: Before we go, Iowa Public Television lost a
leader this past month with the passing of former
colleague, friend and General Manager Dan
Miller.
Dan spent 37 years at this network in roles including
Executive Producer of Public Affairs,
Programming Director and General Manager.
And as we look back at his life and career, it's
clear his lasting legacy continues.
♪♪
♪♪
David Yepsen: Iowa Public
Television would not be today what it is had it
not been for Dan Miller.
Dean Borg: When I think of Dan Miller I think of a
person who walked the line of integrity and enforced
that on those with whom he was leading.
Paula Kerger: When you work in an organization
like public broadcasting you have pressures that
come from many different places and so your compass
has to be set very carefully and you need to
follow it and that is what Dan did.
Molly Phillips: I don't know where Iowa Public
Television would be.
It wouldn't be the powerhouse that it is now.
There's no debate about that.
It would be a very, very different network if it
wasn't for Dan Miller.
Let me play devil's advocate for a moment.
♪♪
I'm going to turn to another member of our
convention coverage team, Dan Miller, who was up
very late last night covering a district
caucus.
Borg: Dan Miller was extremely proud of Iowa
Public Television and the influence.
He saw potential.
A couple of weeks ago you told our network that you
believe that, your words, public service is the
place that you thought you should make your
contribution.
What is it that Bob Ray wants to be remembered
for?
Borg: Dan Miller was an intellectual --
How do you go about convincing the public that has always
treated its prisons as out of sight and out of mind
that they need to think about it a little bit
more?
Borg: He was extremely defensive of the
independence of Iowa Public Television.
Is that fair?
Is that a fair thing to say?
Yes it is a fair thing to say.
Yepsen: He also understood that the function of
journalism is to serve the community and in the case
of Iowa and Iowa Public Television it was making
this state a better place to live in everything that
is done, the arts, cultural things, politics,
trying to inform people and move this state
forward.
Borg: Many times after a program I would either
seek Dan out or call him on the telephone
afterwards and ask him about his evaluation of
that program and he was never bashful about
critiquing when I sought it and sometimes when I
didn't seek it.
Yepsen: He wanted the Iowa Press show to move along
and what will stand out in my mind is if we weren't
being sharp enough, we weren't being point
enough, he was in this little earpiece snoring,
wake me up when it's over, letting us know that we
needed to step up our game out there.
I'll always remember getting that little wake
up call.
♪♪
♪♪
Hello, I'm Dan Miller, Director of
Programming for Iowa Public Television.
Beginning March 3rd this stage will be alive with
the sights and sounds of Festival, Iowa Public
Television's two week programming spectacular
showcasing the very finest of what this network has
to offer.
As Program Director, Dan Miller assumed many
duties, including hosting efforts during annual PBS
pledge drives.
His colleagues would later surprise him in studio
with one of his favorite IPTV guests and Dan's
mother.
And here comes the two-legged dog Rusty, the
two-legged dog that Dan is --
My goodness.
They did on Living in Iowa this incredible two-legged
dog.
It is a dog that the show has received more comments
than anything they've done and we knew this was his
birthday and Danny just loves this dog.
Danny was always the perfect child.
Perfect.
He was the youngest and perfect, absolutely.
We expected him on St. Patrick's Day but as
always two days late.
He's been that way ever since.
I thought I better tell it tonight.
♪♪
Phillips: He really put Iowa Public
Television on the map nationally I would say
with PBS, CPB, APTS.
People really started talking about Iowa Public
Television when he became GM.
Kerger: I was always struck by his intellect,
by his, frankly his intellectual curiosity but
also his kind and beautiful heart.
He really touched so many people in our industry and
there are many of us who are always beholden to his
great joy in life.
♪♪
Yepsen: A very colorful guy, quite
profane although very careful about not doing it
around all these microphones.
♪♪
Phillips: Dan meant the world to me.
I would say that he was almost like another father
to me but he would be so mad if I said that because
he's not that much older than me.
So I would say he's like a big brother.
Borg: Would Iowa Public Television have been
without Dan Miller I don't think as effective, nearly
as effective as it is today in tying Iowans
together and letting them know the various things
that are going on in this state and instilling a lot
of pride in Iowans.
♪♪
♪♪
♪♪
Funding for Iowa Press was
provided by Friends, the Iowa Public Television
Foundation.
The Associated General Contractors of Iowa, the
public's partner in building Iowa's highway,
bridge and municipal utility infrastructure.
I'm a dad.
I am a mom.
I'm a kid.
I'm a kid at heart.
I'm a banker.
I'm an Iowa banker.
No matter who you are there is an Iowa banker
who is ready to help you get where you want to go.
Iowa Bankers, allowing you to discover the genuine
difference of Iowa banks.
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