Strategic observation

Spotlight: Montana farmers hope to ride out trade tension with China before more damage occurs

2018-07-12 20:19:31 (Beijing Time)         English.news.cn

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by Peter Mertz, Huang Heng

HELENA, the United States, July 11 (Xinhua) -- From the capital of America's fourth-largest state to the vast farmlands rolling up to the Rocky Mountains, Montana farmers were holding their breaths and hoping the trade tension with China would end soon.

"I think that the length of the term of this is going to be the deciding factor," said John Youngberg, executive vice president of the Montana Farm Bureau.

Youngberg talked to Xinhua from the Montana state capitol building Tuesday, where state agricultural leaders met for a legislative session to discuss strategies in the nascent trade tension with China.

Agriculture is Montana's top industry.

"My husband builds farm equipment sprayers, and his supplier of stainless steel pipe fittings has gone up 40 percent," said Lola Raska, executive vice president of the Montana Grain Growers Association.

"He's going to have to pass at least some of that on to the farmers," she told Xinhua.

"Our growers are concerned, I think unsettled probably sums it up best -- and like everyone, are concerned about the short-term repercussions," Raska said.

Raska is most concerned about "what is going to happen to our trade relationships that we worked on for decades and decades to establish, and, what will happen to them in the long run."

Both Raska and Youngberg emphasized that once a commodity market is lost, it may take years to recover, or may be forever lost to global competition.

"People need to plan ahead for what you're going to plant -- they have to have some idea of what crops are going to be on the market," Youngberg said.

Montana is America's third-largest producer of wheat and ranks second in barley, with its 59.8 million acres of farmland (240,000 square km) second only to Texas in land allocated to agricultural production.

The state is also among the top three producers of lentils, flax, hay, alfalfa and canola, generating annual gross revenues of close to 5 billion U.S. dollars.

"We grow a very high-quality, high-protein, hard red spring wheat and hard red winter wheat," Raska said, adding sales of these products have been steadily increasing.

"As the standards of China's consumers go up and their desire for more high-quality pasta and frozen dough increases, we need to meet the demands of these consumers," she said.

"We need to be able to work with them and create markets," she added.

Both Raska and Youngberg said the longer the trade war lasts, the more casualties there will be.

"The fragility of agricultural markets that has been observed in the past few months suggests that even a small negative signal about trade relationships could lead to another large downward price swing," Anton Bekkerman, Montana State University professor, told Xinhua earlier.

After mid-March, "markets have experienced large intraday price swings and increased inter-day price uncertainty," said Bekkerman.

"This kind of volatility makes it more difficult for both buyers and sellers of wheat to make management strategies," he said.

Raska recalled that when the United States and China reached consensus not to launch a trade war against each other on May 19, waves of relief rippled across America's farmland.

"But we have only half-day happy," she said.