It would be reasonable to assume that bankruptcies would surge after Trump's trade war closed off access to the largest consumer market in the world (China) for American farmers but, according to this report, bankruptcies more than doubled before Trump took a giant shit on their business.
According to analysis from the Federal Reserve Bank of Minneapolis, the number of farms declaring bankruptcy more than doubled during the first half of 2018 and that's just in the Upper Midwest.
From the Associated Press:
The analysis found that 84 farms filed for bankruptcy in Wisconsin, Minnesota, North Dakota, South Dakota and Montana in the 12 months that ended in June. That’s more than double the number over the same period in 2013 and 2014.
“Current price levels and the trajectory of the current trends suggest that this trend has not yet seen a peak,” said Ron Wirtz, an analyst at the Minneapolis Fed. [...]
“Dairy farmers are having the most problems right now,” said Mark Miedtke, the president of Citizens State Bank in Hayfield. “Grain farmers have had low prices for the past three years but high yields have helped them through. We’re just waiting for a turnaround. We’re waiting for the tariff problem to go away.”
There's a lot going on here, but if bankruptcies surged during the first half of the year because of low prices (Trump's trade war wasn't on the books yet), I can scarcely imagine how many bankruptcies we'll see during the second half of the year and next year.
Trump's trade war hasn't just closed off access to the Chinese market, it has also depressed prices for almost every agricultural product from soybeans to pork butts because farmers have more supply than they can sell. There are billions of pounds of all manner of crops and meats sitting in storage across the country. It's why you've likely seen firesale prices and Buy One Get One deals at your local grocery.
There's a considerable amount of lag time between what's happening in the economy right now and when it shows up in official figures so it could be a year or more until we know the full extent of the damage done by Trump's trade war. There's what we can easily see in jobs reports and prices, but there's more that we can't easily see like the number of farms declaring bankruptcy.
In related news, some farmers who took the risk of storing their crops instead of selling them at lower prices are now watching their crops rot.
In Louisiana, up to 15 percent of the oilseed crop is being plowed under or is too damaged to market, according to data analyzed by Louisiana State University staff. Crops are going to waste in parts of Mississippi and Arkansas. Grain piles, dusted by snow, sit on the ground in North and South Dakota. And in Illinois and Indiana, some farmers are struggling to protect silo bags stuffed with crops from animals.
U.S. farmers planted 89.1 million acres of soybeans this year, the second most ever, expecting China’s rising demand to give them better returns than other bulk crops.
But Beijing slapped a 25 percent tariff on U.S. soybeans in retaliation for duties imposed by Washington on Chinese exports. That effectively shut down U.S. soybean exports to China, worth around $12 billion last year. China typically takes around 60 percent of U.S. supplies.