Midwest Farmers May Benefit From China’s Chaos
Not long ago it seemed like farmers in the American Midwest were in trouble. Excessive rain had delayed crop growing season, and tariffs from the Trump – China trade war made it harder for agricultural goods to be sold overseas. In 2020 however, the situation has reversed course.
In late December of 2019, right when coincidentally the Coronavirus (AKA COVID-19) first appeared, it was announced that many American goods would have their tariff reduced. This included foodstuffs like avocados, which saw their tariff reduced from 30% all the way to 7%, while the tariff on frozen pork was reduced from 12% to 8%. At the time China lost over half of its pigs to African swine fever, and was facing an overall economic slowdown.
Then COVID-19 started to be noticed. Chinese officials locked down hundreds of millions in cities, and forced work closures. The virus has paralyzed the Chinese economy and caused shockwaves in the global economy. As it stands, employers in China are have trouble bringing back migrant employees. One factory reported that only 1/3 of its workforce reported in when the factory reopened due to the lockdowns. It is fair to assume that China’s domestic agricultural sector is also hurting due to the lockdowns.
If that were not enough, yet another virus is sweeping China, and this time it is coming for the chickens. The virus known as H5N1 is sweeping through the Rural Chinese country side and killing all of the chickens. As reported by the South China morning post, one farm in huangqing district of Shaoyang city started with 7,850 chickens. After the outbreak, 4,500 of the chickens have died from the infection.
Chinese farmers were hit by a swine flu, then by COVID-19, then by H5N1, and now a plague of locusts are on the way to kick them while they are down. The swarm of locusts are traveling north, having already devoured the farmland in Africa and the middle east. The locust cloud is currently being held at bay by China’s geopolitical enemy India, but they may not hold. If India lets the hoard pass, it might be the finisher for the farmers in China.
Without the farms in China the Chinese people, who still need to eat, will have to turn to one of the largest exporters of food in the world: the United States of America. Even if the Chinese government refuses to buy American agriculture and buys elsewhere, that just means a vacuum has been left open will open for Midwest farmers to fill.
The crisis in China is the Midwest farmer’s gain. As supply is China falls, the more opportunities that are presented to Midwest farms. In fact, the pending collapse of China’s domestic agricultural sector may have further ramifications. American farm produce is charged at a higher than normal price because of tariffs. If China is forced to import American farm goods, China may be forced to capitulate in the trade war just to keep food prices reasonable. Only time will tell what happens next.