Farmers mull tariffs' profit pinch

When Chris Hoffman began raising hogs in McAlisterville in the central part of Pennsylvania 30 years ago, he was going to become part of an American agricultural strategy.

"We have set up our marketing system so that we can feed the world. Now there are tariffs that prevent us from moving the product that we already have on the ground. Tariffs are pricing us out of what other countries can afford," he said.

Hoffman and his fellow hog farmers are facing tariffs from China and Mexico. The dual threat of tariffs come as Hoffman said there are about 3 percent more live hogs on American farms this summer than there was a year ago.

Hoffman said he sells on average about 34,000 hogs a year: "The number doesn't change much year to year."

"You have to have reserves to be able to get through this," he said. "Over a period of time if these trade wars go on too long it just goes in the wrong direction and you can't stay in business anymore."

Hoffman said he has a "rainy day" fund and that "we continue to try to grow our reserves."

China and other top US trade partners like Mexico have focused on American farmers with retaliatory tariffs on soybeans and pork among other products after the US President Donald Trump imposed 25 percent duties on $34 billion worth of Chinese goods as well as tariffs on steel and aluminum from the European Union (EU), Canada and Mexico.

Earlier this month US pork producers were hit with a second batch of Chinese tariffs in response to US tariffs. Hoffman said the pork market has traditionally strengthened for him and other producers as spring turned into summer. But not now.

"Before we were getting about 68 to 70 cents a pound for hogs," Hoffman said. "We have been in the 50 cents-a-pound range so we are not seeing an increase as we move forward. These tariffs are now causing us not to be able to move our products."

William Boyd and Bill Beam are Pennsylvania soybean farmers. Beam farms more than 3,000 acres of corn, soybeans and wheat outside of Philadelphia in southeast Pennsylvania, while Boyd farms more than 500 acres of corn and soybeans near Mertztown, south of Allentown in the state's Lehigh Valley region.

Both said they have seen about a $2-a-bushel drop in soybean prices since April when they planted the crop and when China first threatened tariffs on American exports.

"That means we would have had a little profit under the old price. Now it's just about break even," Boyd said.

"It makes it difficult to make money. I am not looking to go out of business, but it certainly makes it more challenging," said Beam. "The highest price I got this year was about $10.85 a bushel. If I sold it today I would get about $8 a bushel and I am not going to sell my crop at that price."