The floods that hit the Midwestern United States in March flooded nearly 40 percent of the grain, corn, and soybean crops. The damage exceeded three billion dollars.
Farmers are in a panic: quite a bit - and resolving the trade conflict with China would pull the industry out of a deep crisis. Whether the American agricultural market will recover after such a blow is in the material of RIA Novosti.
The US agricultural sector is experiencing the worst recession in thirty years. Last year, 84 farms filed for bankruptcy in the Midwestern states alone. This is the maximum since 2007.
The main reason for the total ruin is the deepest debt hole since the agrarian crisis of the 1980s, which hit most farmers. Many work at a loss and have no chance of paying off debts this season. Only a few sometimes go to zero or receive scanty profits.
There have been signs of overproduction on the market for a long time, preventing farmers from raising product prices.
The trade war with China unleashed by Trump sharply exacerbated the situation. The retaliatory duties imposed by Beijing on agricultural products particularly affected soybeans and corn producers, who for decades sent crops to the Chinese market. In particular, soybean supplies have virtually ceased.
Holding their breath, the farmers watched the negotiations with China, in which there was a fragile truce.
The end of the trade war would mean the return of American soybeans, corn, pork, dairy products to the boundless Chinese market. This means that the long-awaited income and in fact the only chance for most farmers to pay off debts.
Farmers' debts reached $ 409 billion, an increase of $ 24 billion over the year, Agriculture Minister Sunny Pardue told Congress.
In anticipation of a new trade agreement, farmers filled last year's harvest with storage. And almost everything turned out to be washed away when the powerful rivers - the Mississippi, Tennessee and Missouri - overflowed in mid-March and began the largest flood in the history of the country.
Billions under water
Spring floods caused by melting record volumes of snow combined with heavy rains swept the entire so-called US grain belt - from Nebraska to Iowa.
Streams of water destroyed hundreds of thousands of storage tanks.
In Iowa, Nebraska, South Dakota, the total damage from lost crops and dead livestock is estimated at three billion dollars.
“Blocks of ice the size of cars crashed into sheds and houses. The calves were carried away into the icy water, dotting them with carcasses of the banks of the spilled rivers. Farm fields have turned into lakes, ”The New York Times describes the situation.
In Nebraska alone, more than a million calves died from the floods, the state governor said last week. According to John Hansen, president of the Nebraska Farmers Union, the water came so fast that they simply did not manage to transport livestock and save the contents of the granaries.
Moreover, according to the forecasts of meteorologists, floods will continue in April due to the expected abnormally heavy rains.
According to estimates by Archer-Daniels-Midland, one of the largest grain trading companies in the world, floods will cost US $ 50-60 million in operating profit in the first quarter.
As noted by NYT, the impact of the elements is able to finally finish off the farm, already experiencing the worst of times in thirty years. The matter is complicated by the fact that the flood, which washed away the crops and stocks, severely damaged the infrastructure - rural roads, bridges, railway lines.
As a result, the agricultural sector lost the ability to deliver products from farms to processing plants and to end consumers. As well as getting seeds for sowing, as well as animal feed.
For example, to feed the surviving cattle in Colfax County, Nebraska, farmers were dumped hay from military helicopters. As the U.S. Department of Defense clarified, previously this had to be done only once - in 1949.
“It's probably over for us now,” said The New York Times Anthony Ruzicka, the owner of a family farm in Nebraska. “Financially, we just won’t survive this.”
“We did not earn anything on grain due to trade problems and low prices, switching to livestock, and now what should we do? We have nothing to feed the animals, ”adds Tom Geisler, another farmer in the affected state.
Do not sell, but destroy
According to Iowa farmers, floods destroyed up to 80 percent of the crop. Tons of unsold grain remain in flooded storage facilities. Meanwhile, experts have already said: it’s not worth trying to sell corn and other flooded grains that have lost their presentation.
In accordance with the policy of the American Food and Drug Administration, water-soaked grain is unsuitable for sale - it will have to be destroyed.
Soaked grain is considered falsified, Iowa State University officials recalled. Farmers were also advised not to try to mix contaminated grain with good grain.
U.S. officials promised to tighten checks on all agricultural products to prevent spoiled grain from entering the market that is unsafe for the health of consumers (including because floods left drainage fields polluted with chemicals and numerous farms from the banks).
“This is the most bitter pill that we find it very difficult to swallow,” said Jeff Jorgenson, a spokesman for the Iowa Regional Soybean Producers Association.
Farmers warn the authorities that they will certainly need urgent financial assistance from the federal budget. But, even if it arrives, it will take years to fully restore agricultural production.