Vicious cycle of the trade war
A northwest Minnesota farmer describes a vicious cycle brought on by the trade war.
Tim Dufault, who grows soybeans and wheat near Crookston, testified before the House Ways and Means Committee Wednesday.
“The cycle starts with low commodity prices that we’ve seen over the last two-plus years. So when prices are low and only going lower, a farmer is left with two bad choices: lose money by selling low, or hold onto the crop he has in hopes the price will improve.”
He says in either instance, profits have suffered, resulting in less working capital.
“And in farming, since you need to invest constantly in seed, fertilizer, fuel, repair bills, land taxes and such, you have to invest in these expenses six to seven months before you have a crop to sell or seeing any return. So this means increased borrowing.”
Dufault says lenders are placing tighter terms on loans, and farmers are making fewer longer-term investments. He added that repercussions of the trade war are being felt all across rural America.