Weighing Hogs and Watching Twitter in Rural Illinois

Illinois farmer Brian Duncan is worried his hog sales along with his soybean, corn and wheat crops will be affected if China slaps tariffs on U.S. agriculture.
( Reuters Brian Duncan hog farmer )

Brian Duncan runs a farm two hours outside Chicago that has been in his family for four generations. Each morning he wakes to attend to his hogs and his crops, but now, more often than not, he also has to pay attention to President Donald Trump’s Twitter feed.

With the threat of a trade war between the United States and China, Duncan is worried his hog sales along with his soybean, corn and wheat crops will be affected if China slaps tariffs on U.S. agriculture.

The hogs market has been volatile, dropping on days when the tensions rise, rising when officials sound more conciliatory. Chicago Mercantile Exchange lean hog futures are down 6 percent since the end of March.

The uncertainty is creating headaches for Duncan.

“It is a difficult environment. I, like most businessmen, would like stability. As we go from one tweet to the next, it creates an unstable environment,” said Duncan from the office of his farm, which covers 4,000 acres in Polo, Illinois. It brings about 70,000 hogs to market annually.

In response to Trump’s initial threats to impose tariffs on up to $60 billion in Chinese goods, China said it would levy an extra 25 percent duty on pork products and other American products.

Trump has said the administration will protect farmers, but has said little in the way of specifics. Some farm-state lawmakers have said the omnibus farm bill, which passes every five years or so, could address the issue, but analysts warned against extensive subsidies that could have wide-ranging effects, causing too much production in an already oversupplied market.

“This could set off a little bit of a roller coaster or a landslide if it were to get too large,” said Ryland Maltsbarger, associate director in pricing and purchasing at IHS Markit.

“If you start subsidizing production, you could get retaliation not just from rival exporters, but also importers.”

Duncan, who is also vice president of the Illinois Farm Bureau, said the inconsistent message keeps him up at night. About 30 percent of his hogs are exported, and China plays a strong role in the global market.

“If we lose the China market or if we cede that market to other countries, it could be a game changer for generations negatively too, because once you lose those markets, they are hard to get back,” he said.

Reporting By Angela Moore; additional reporting by Ayenat Mersie, writing by David Gaffen; Editing by David Gregorio

 

 

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