BLAIR, NEBRASKA (2024 December 10, Tuesday)
Don Harrold, Writer / Editor
blairtoday@mail.com – Facebook
For Washington County farmers watching grain prices at the Cargill elevator in Blair or shipping cattle to market, proposed tariffs under a second Trump administration could have significant local impact. We spoke with Jordan Dux, Senior Director of National Affairs with the Nebraska Farm Bureau, and K.C. Belitz, Director of the Nebraska Department of Economic Development, and they explained what Blair area producers might expect.
Understanding What’s at Stake
“About a third of what is produced in the state of Nebraska alone is exported,” Dux explains, a reality familiar to Blair area farmers shipping corn and soybeans through local facilities. “We produce commodities that are easily exported, corn, soybeans, livestock products, beef, pork. And we, on the livestock side, we also process those in Nebraska. So the value of international trade to Nebraska can’t be understated.”
For Washington County producers, the stakes are particularly high. As Mark McHargue, Nebraska Farm Bureau President, told Fox Nebraska, “We export 30 percent of all our products, we export $10 billion of the 30 billion we produce so you start disrupting trade it’s going to have an outside effect on Nebraska.”
How Tariffs Work
Dux breaks down the mechanics of tariffs for local producers: “Tariffs can be used for a couple of different things. Trying to understand where the president wants to go, I think, is the name of the game here. I think the president has said, and he has actively used tariffs in the past to try and get a certain policy outcome from another country.”
Drawing from recent history, he provides an example that Blair manufacturers will recognize: “The president used tariffs, 232 tariffs, to protect the United States steel industry. So we put a tariff on Chinese steel, and that made, essentially, that tax made Chinese steel more expensive, and thus it made U.S. Steel prices have become more price competitive.”
Local Impact of Global Trade Disputes
For Blair area farmers, past trade disputes offer important lessons. “What we saw for six plus years ago, eight years ago when the president came in, is that he was not afraid to enact policy changes from other countries by threatening and utilizing tariffs,” Dux recalls. “When he actually enacted the tariffs, other countries reacted and we saw a market impact, especially on China.”
This matters particularly to local commodity producers, as Dux explains: “The real impact, why you saw shifts in prices to producers, direct impact to producers, is because we are shipping raw corn overseas. We are shipping raw soybeans overseas. And so because you are taking a bulk commodity like that, a disruption in trade directly impacts a commodity that is publicly traded like that.”
“Will there be an impact to consumers? Absolutely… Again, I would say the President would argue there is a larger goal in mind. It’s not just to raise prices. There’s a policy reason for that. But I’ll let him talk about what those policy reasons are.”
Breaking Down the Numbers
Just how much could these tariffs affect Blair area farmers? Dr. John Beghin, Professor of Agricultural Economics at the University of Nebraska, Lincoln, provides specific scenarios.
“The impact on Nebraska of a Mexican retaliatory tariff would depend on the size of the retaliation tariff,” Beghin explains. “If just 10% on our exports of corn to Mexico, the impact would be muted because Mexico would still import mostly from the US (no source is as cheap) because of our advantage on transportation cost.”
In this moderate scenario, Beghin calculates a relatively small impact: “A 5 percent decrease of US corn exports to Mexico would be about a million metric ton (39 million bushels). That would have a small impact on US farm prices because total use of corn is around 350 million MT in the US. That would move corn prices by a few cents/bushel.”
However, he warns of more serious scenarios: “If the tariff becomes prohibitive say 60% then Mexico would import from other sources and the US would have to find new markets for the 16-18 million MT sent to Mexico in recent years. That would have an impact on US corn producers while these markets are developed.”
The greatest risk, according to Beghin, comes from multiple countries retaliating simultaneously: “The danger is to have many countries retaliating on the US that would compromise other export markets like China. Then the shock could become more significant on the cornbelt and Nebraska farmers in particular via lower prices for their output.”
Current Challenges Affecting Local Markets
Washington County farmers are already dealing with trade-related challenges. Dux points to specific issues: “There’s some policy changes as it relates outside just border policy. There’s some things happening that we passed the U.S.-Mexico-Canada Agreement, the replacement for NAFTA.”
Of particular concern to local corn producers, “Mexico has recently proposed to ban genetically modified white corn coming into Mexico. That is in clear violation of the USMCA agreement. And we need to address that.”
What Blair Farmers Should Watch For
Looking ahead, Dux identifies key areas of concern: “China is a big one. And that’s going to be the big one to brace for… You’re probably going to see tariffs issued. You’re probably going to see retaliation to agricultural products and other goods. You’re probably going to see some market impacts.”
For local consumers and producers alike, Dux offers perspective on price impacts: “On imported goods from countries that the president places a tariff on, the cost of those goods will go up. I mean, ultimately they will. By how much? I don’t know. It depends on what the president wants to do.”
Support Mechanisms
Blair area farmers should note potential mitigation strategies. “The president is going to be pushing some things and making sure that China agrees to things that they had agreed to prior,” Dux explains. “The President said very clearly that he was not going to – this is a larger conversation than just agriculture, but farmers and ranchers in our state were impacted negatively impacted by the actions of other countries retaliating against us. And so he provided some additional payments to producers.”
State’s Economic Development Perspective
The Nebraska Department of Economic Development is also watching these trade developments closely. K.C. Belitz, Director of the Nebraska Department of Economic Development, emphasizes the need for balanced trade relationships while acknowledging tariffs’ role.
“It’s important for the U.S. to insist on a level playing field with countries like China, who have engaged in unfair trade practices. Tariffs can be one tool to restore competitive balance. Communities in Nebraska should watch closely as the incoming federal administration makes decisions on tariffs in 2025,” Belitz says.
He points to previous successes while highlighting ongoing state efforts to expand markets: “During the first Trump Administration, the U.S. negotiated significant trade agreements with Japan and South Korea, broadening market access to key allies to offset a tougher stance toward China. As evidenced by our recent trade mission to central Europe, the State is committed to increasing export opportunities for Nebraska’s farmers, ranchers, and manufacturers. No matter the direction of federal trade policy, we’ll actively promote Nebraska-made products to international customers.”
Looking Forward
For Blair and Washington County producers weighing their options, Dux emphasizes the need to prepare while maintaining perspective: “Farmers would rather get their income from the marketplace, but there are larger issues here and farmers kind of hold on and we’ll see what happens. That’s kind of the name of the game there.”
His final message to local producers balances concern with context: “Will there be an impact to consumers? Absolutely… Again, I would say the President would argue there is a larger goal in mind. It’s not just to raise prices. There’s a policy reason for that. But I’ll let him talk about what those policy reasons are.”
