This year's corn crop has been absolutely decimated by constant rain and unseasonably cold weather. Trade wars have collapsed American exports of soybeans to China, as foreclosures and bankruptcies are now rippling through the Midwest's agricultural sector at disturbing speeds.
The US farm lobby said Tuesday that a third farm bailout would be needed if Washington grinds to a halt during the 2020 US election cycle limits President Trump from closing trade deals and reopening top export markets, reported Reuters.
American Farm Bureau Federation President Zippy Duvall said if Congress fails to approve the United States-Mexico-Canada Agreement (USMCA), then other trade deals between the European Union and Japan could remain unresolved.
Farmers have already felt a tremendous loss of momentum in exports to China. They're now hoping countries like Europe and Mexico can purchase additional agriculture products.
"The deeper we get into this campaign season, the more difficult it might become" to get USMCA ratified or any trade deals done, Duvall said in an interview.
"Not because of the treaty itself, not because of the need itself, but just because of the rhetoric around the election," Duvall said.
Democratic lawmakers seized the House of Representatives during the 2018 midterm election - as they have routinely demanded changes to the USMCA trade deal.
Duvall said the Farm Bureau has indicated that key export markets have been disrupted at a time when low spot prices, high inventory levels, slowing economic outlook, and damaging weather across the Midwest, could culminate into a full-blown farm crisis on par to the 1980s.
President Trump has promised about $28 billion in farm bailouts in two separate rounds to farmers, who many are his base, to compensate for the loss of sales.
"If we're not going to get USMCA finished, if we're not going to get the solution to our problems in China or Japan, then we need to be talking about another payment to try to hold farmers over until that gets done," Duvall said.
The bailouts came from the Commodity Credit Corporation (CCC), established in the Great Depression, was created to compensate farmers during periods of economic stress.
President Trump's command and control economic style of overseeing the economy has resulted in a trade war where the government picks winners and losers. As a result of government intervention, there is always an unintended consequence, and that one for the trade war happens to be the downfall of American farmers. So it's very likely a third bailout to farmers will be issued as the trade war shows no signs of abating.