“Keep on the sunny side, always on the sunny side,
Keep on the sunny side of life
It will help us every day, it will brighten all the way,
If we keep on the sunny side of life…”
In 1928 The Carter Family recorded a version of the song Keep on the Sunny Side during one of their famous recording sessions in Bristol TN, and it helped cement country music’s arrival. If there’s a sunny side to the developing trade war with China it’s the reminder of our agricultural dominance. You may not agree with the scale or methods used, but America, and American farmers are incredible at producing food. Never in the history of mankind has any nation been as blessed by so much arable land, abundant ranges, fertile soil, skilled farmers, and technological innovation.
USDA data from 2017 illustrates how good we are at producing food. In 2017 the US agriculture exports totaled $140.5B, with a trade surplus of $21.3B. Our number one importer was China, buying $22B, followed by Canada with $20.4B, Mexico with $18.6B, Japan at $11.8B, and the EU with $11.6B. We exported $24B of soybeans, $9.7B of corn, $8.1B of tree nuts, $7.1B of beef, $6.4B of pork, $6.2B of wheat, $5.3B dairy, $4.7B in fresh fruit. For more than 50 consecutive years America has posted agricultural trade surpluses. While much of the world may be able to attain an unfair pricing edge through governments subsidies, questionable labor practices, or destructive environmental practices, the United States is the reigning champion when it comes to agricultural exports. We produce food at the lowest cost, and on an unrivalled scale.
When the current administration announced tariffs on Chinese steel and aluminum, the Chinese responded with a 15% tariff on fruits and nuts, and a 25% tariff on pork. Their response clearly targeted agriculture. This serves as both a wake up and a reminder of our Nations agricultural strength. Of how critical farming is to vast areas of America, how well we produce food, and how strategically important farming is. It’s easy to undervalue something that has been with us, since we stopped hunting and gathering settled down and became us. Digital is exciting, dirt isn’t, but we still need to eat every day. Until a cloud based, AI, block chain starts making sandwiches we still need farms.
These developments are terrible for American farmers. Tariffs will result in higher prices in China, and higher prices will hurt sales. As less product ships overseas, domestic supplies will build, and put downward pressure on prices. Commodity based farmers, who have already suffered a nearly 50% drop in income from market highs less than 5 years ago, will come under increased pressure at a time when they can ill afford it. What has been a struggle, will only become more of a struggle, a crying shame as American farmers are the best there has ever been. The opening volleys of the trade war that the current administration is starting with China will hurt part of its most loyal base, rural American farmers. When it comes to farming no one needs to make America great again. Make American farms financially sustainable again, yes. Make agriculture environmentally responsible again, yes. Make the food system healthy again, yes. But on the sunny side when it comes to productivity and price, we’re not only great, we’re the greatest of all times.