Stand for Something: Farmers Matter More Than Foundries

This content was originally published by the Longmont Observer and is licensed under a Creative Commons license.

A quick note of context for the stories you might be reading in the national news about China and America trading tariffs.

President Donald Trump's rhetoric might make you think that the most important industry in the United States is steel and aluminum manufacturing. This is patently incorrect. As I've previously noted, steel and aluminum are important to the US economy, but they are not the largest contributors. The US Bureau of Economy Analysis (BEA) breaks down contributions to the GDP by industrial sector, and the picture is clear. While overall manufacturing accounts for about 18% of the US GDP, refining and forging of all metals combined amounted to $210 billion in 2016 (last year for which the BEA says high quality data is available). That's a large industry, no doubt. But context matters. Apple, the single largest IT company in a market of giants, made $215 billion in 2016. All the beer sold in the United States combined had revenue of $111 billion in 2016.

Put another way, President Trump's on-going trade war with China, Europe, Canada and Mexico that started with steel and aluminum tariffs is a fight picked over an entire industrial sector that represents just 0.7% of US economic output. There are single companies in the United States that make more money than this entire industrial sector.

This trade war we're in is not a function of these industries being important, nor is it really even a function of President Trump pandering to rust belt voters. It's another sign of President Trump assuming that running an entire nation is the same as running a two-bit real estate branding entity. Others have more intelligently discussed how President Trump's mental bluntness have revealed the extent to which he is out of his depth.

What I want to reiterate is the cost of these amateur hour tactics to the people of Longmont, and Coloradans in general. While agriculture in Boulder County and in Colorado in general are complicated and diverse, I will focus on two agricultural products in particular because China has chosen to focus on them.

Corn and beef account for 18% and 55% of Colorado's agricultural output, respectively (note that the USDA census doesn't explicitly break out corn, but the value of other grains grown in Colorado is small).

You can see the price of corn and beef futures on the NASDAQ drop significantly in March, back when President Trump began this idiotic exercise and China announced its retaliatory tariffs shortly thereafter. Live cattle prices fell 9% in a matter of days, and corn futures are down 25% since the beginning of June.

I'm no agriculture economist, and I've never run a farm, but it doesn't take a scholar to understand that farms -- family farms in particular -- operate on thin margins. Temporarily low corn prices might be good for cattle and hog farmers, but in the long run, a weak market for grain is bad for everyone and farmers know it. President Trump's belligerent trade moves aren't just between us and China. Mexico, Canada and Europe are getting involved and that's hurting all of agriculture.

And, again, the reason doesn't take a genius to understand. Just ask anyone who's ever lived in a small town. Or interacted with people. If you spend enough time trying to pick fights with everyone you know, they're going to gang up on you eventually.

The real question for me is this: Is this all this going to diminish support among farmers for Republican politicians?