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The Journal Gazette

Sunday, April 15, 2018 1:00 am

Editorial

Amid tariffs, Indiana faces a season of uncertainty

Some in Indiana welcomed President Donald Trump's imposition of tariffs on steel and aluminum imports. But China's decision to target agricultural imports in response provoked alarm. Pork, corn and soybeans are particularly vulnerable in the trade disputes with China; Indiana is among the top five states for production of all three. Lives may not be directly at stake in this international game of brinksmanship, but livelihoods certainly are.

Within the past week, the crisis showed signs of easing. But Hoosiers who stand to be affected by the moves and countermoves between Washington and Beijing are entering an already weather-delayed planting season without knowing for sure where some of their products are going, or how much they will be worth.

“Every day, it's kind of a game of wait-and-see to see what the markets are going to do in response to what China is saying,” said Elaine Gillis, who raises corn, soybeans and wheat with her husband, Craig, at a fourth-generation farm in Dunkirk, about an hour south of Fort Wayne.

“We are very concerned about the potential impact of what we're reading about and hearing about,” said Mark Wicker-sham, director of Huntington County Economic Development. The trade disputes may create some winners as well as losers here, he pointed out. Huntington Aluminum and Steel Dynamics, for instance, may benefit from the metal tariffs Trump has imposed, while some builders may be hurt by higher metals prices.

It's harder to find the upside, though, for Indiana farmers. Already behind because of the poor weather this spring, farmers could see demand and prices drop before their crops are even ready for market.

In an email, Jeanette Merritt, director of check-off programs for Indiana Pork, said her organization doesn't have a position on the tariff disputes. But, she noted, “exports are critical to U.S. pork producers.” Last year, Merritt wrote, the pork industry nationally sold $1.1 billion worth of pork to China.

“Indiana is a major agricultural state,” said Melanie Fitzpatrick of the Indiana Soybean Alliance. “Local communities will be affected as well. If farmers aren't making a profit, they can't purchase new equipment, seeds; they can't contribute to their community.”

It's not possible to determine exactly how much of Indiana's soybean crop goes to China, she said. But “more than half the U.S. soybean crop gets exported ... and China is our largest trading partner for soybeans.”

“The volatility is going to continue – that's a given,” said Ed Farris, agriculture and natural resources coordinator for Purdue Extension in Huntington County. If farmers can't sell pork to China and have to market pork products to other countries, for instance, pork prices could go down, Farris said. That in turn could lower prices for soybeans and corn products that are used to feed hogs.

“It really puts a strain on our abilities to have the operating decisions we need to have,” said Gillis, who chairs the state soybean group's marketing and communications committee. “We've had a relationship with China for 35-plus years now on the soybean side. They've been an excellent trade partner, and we don't want trade issues to impact that relationship, and we might be headed down that road right now.

“This business is our livelihood. It's what we know, it's what we've grown up doing, and we want to be able to do it for many generations to come,” Gillis said.

“Without the export opportunities, it really limits our ability to stay in business. ... We have to be able to work through a trade agreement that is good for everybody and that is fair for everybody.”