As of midnight this morning, the trade war between the United states and China is on. With China making stiff tariffs on soybeans, corn and pork which has direct impact on Illinois farmers in all of those areas.
The words 'trade war' sound scary, but were told it may not mean much for your wallet in the short term, unless your a farmer or one of the dozens of professions who help farmers sell their produce.
China is one of the biggest buyers of soybeans and corn, and we talked with a local broker company who says their promise not to buy is bad news not just for the farmers, but for the whole economy.
Bates Commodities in Normal has over 20 years in agriculture and working in the commodities business specializing in grain, livestock, land owners and seed dealers. Pete Manhart is a futures trader, and helps sell farmer's produce on the large scale. He says the impact of these tariffs will have a broad reach across all the sectors of the economy, simply from a big drop of income. Manhart the owner of Bates Commodities, has the experience in agriculture to understand the impacts of a trade war.
"You just don't know what it will do to a grocery store, what it will do here. But usually, in a trade war, which this is the start of, we have been talking about it, usually a trade war hurts everybody," said Manhart.
After speaking with both traders and farmers, who both say this lower sale price could cause farmers to lose hundreds of thousands of dollars in profit, resulting in untold millions of lost revenue towards the economy.
The farmers fields of corn are coming in well this year. In fact, Robert Wieland says, if things go well, it could be a huge year for yield.
"I see on of the best crops we've every had, and that's the bigger issue," Wieland said.
Especially considering China's promise not to buy, while that was directed at soybeans and corn, tariffs mean these green fields will go for less than they would have been before the trade war.
"The less we sell, the more we have, the less people have for income, and that just goes out, every where. Not just corn and beans," Manhart said.
Just because China has promised not to buy from the U.S. doesn't mean they won't get the produce both Manhart and Wieland believe China will just buy from another country, who would act as middle-men. Those countries would see profit in place of local farmers.
"Tariff's are playing in my opinion a small part. China is going to get their grain one way or another. Back door or through other countries or whatever, because they need it to survive for their people. The brunt of this is going to be the farmer," Wieland said.
A brunt that could, literally, buy the farm.