Executive Intelligence Review


U.S. Farm Sector Was Reeling Long before Trade Uncertainty; Milk Producers in Crisis

May 4, 2018 (EIRNS)—At present U.S. soybeans are in the headlines, because buyers in China, the biggest destination for U.S. soybeans, are holding off from placing any orders, given the uncertainty about whether a 25% import duty might be imposed on incoming soy. Furthermore, mega-soy trader Bunge reports that Chinese customers have cancelled orders for over 60,000 metric tons of U.S. beans, as of April 19. However, long before U.S. President Donald Trump called the question on trade, the question of the rotten state of the U.S. economy was called for farmers of all commodities, and for all other aspects of U.S. real production activity.

Producers of standard crops, such as wheat and corn, are farming at a loss, and their farms are surviving by off-farm income, insurance and debt. Net farm income is down by 50% in the last five years.

Milk producers are especially hard hit by prices too low to maintain dairy farmers’ operations, because they cannot “fallow,” or let-up, in maintaining their milking herds, and they have a perishable product. Facing ruin, many are selling out. Federal emergency action is required, but Washington policy continues to conform to the Wall Street principle of non-intervention. In reality, this is intervention for financial rake-off, and modern-day British East India Company, plantation-style production.

This month, Walmart will open its own massive milk-processing operation in Indiana, intended to process 100 million gallons of milk a year for 600 Walmart stores, and get its raw milk supply at super-low prices from Midwestern, corporate herd operations (plus, who knows, imported milk “constituents”). Walmart’s former supplier, Dean Foods, has terminated contracts with some 100 family dairy farms in eight states—Indiana, Ohio, Pennsylvania, New York, Kentucky, Tennessee, North Carolina and South Carolina. Walmart is a Wall Street success story.

This is an example of the clash between the current destructive system in the U.S., and that of China, where the practice of supporting farmers is actively practiced, which once characterized the U.S. build-up and food security system.

Look at the former top dairy state of Wisconsin. The Milwaukee Journal Sentinel on April 18, ran the story, “Family Farms Decimated by Wisconsin’s Dairy Crisis.” In short,

“Wisconsin lost 500 dairy farms in 2017, and about 150 have quit milking cows so far this year, putting the total number of milk-cow herds at around 7,600—down 20% from five years ago.”

The rate of Chapter 12 (Federal) bankruptcies in the western part of the state was the highest in the nation in 2017. Empty barns are a common sight. Farm suicide rates are rising.