Trade war bruises family farms in Trump country

DODGE, Wis. — Ken Jereczek had one more thing to tell me. Ken and his son Paul had just finished giving me a tour of their 180-head dairy farm near the town of Dodge, Wis., a few miles east of the Mississippi River. They showed me the waterbed mattresses where the cows sleep, the Fitbit-like ankle monitors that signal when the cows are in heat, and the temperature-controlled sprinkler system that keeps them comfortable in hot weather. “An uncomfortable cow is an unprofitable cow,” Paul explained.

Then the Jereczeks talked about the economic forces conspiring to endanger their farm’s survival, the most recent of which are the tariffs imposed by Mexico and China on nearly $1 billion of American dairy exports.

But as I was about to leave, Ken suddenly became silent. He looked down and momentarily began to weep. “This is the first time in my life time I really don’t know what to do,” he said through tears.

Ken said that owning and growing the farm had been the fulfillment of a childhood dream. He hoped to pass the farm on to Paul, but Trump’s trade skirmishes are making that less likely now. “I’m 35,” Paul said. “I have no realistic chance of buying this place from my dad.”

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The last few decades have seen the demise of thousands of small family farms across America. Dairy farms have been particularly hard-hit as U.S. consumers look to dairy alternatives (almond milk, coconut butter, etc.), lowering demand even as supply has remained steady. To stay profitable, farms must produce more milk, increasing supply and further depressing prices.

Many small family-run farms have been forced to sell out to large and more financially secure corporate operations. According to data from the Department of Agriculture, the number of dairy farms declined from 3.5 million in 1950 to just 58,000 in 2012.

Ken estimates that there were 40 dairy farms in Dodge when he began farming 40 years ago. They’re the only ones left now.

The Jereczeks have stayed in business by keeping costs low. Ken doesn’t take a wage from the farm, and they save money on feed by growing their own crops. Still, they’re barely scraping by.

“When things break we can’t replace them,” Ken says, gesturing toward a 1990s-era pick-up truck in the driveway. “We’re not being extravagant. We don’t own a boat. We don’t own a snowmobile.”

“We don’t even own a four-wheeler!” Paul adds.

China and Mexico’s tariffs were a tit-for-tat retaliation to tariffs imposed by the Trump administration starting in June. The countermeasures sent some dairy prices to their lowest levels in nearly a decade.

How far prices drop, and for how long, is anyone’s guess. They are questions that weigh on the Jereczeks from the moment they rise at 3:45 each morning.

“It’s scary. It’s scary,” Ken says. “You don’t get along with your friends all the time, you don’t agree with them all the time, but you work it out.”

Other Wisconsin farmers are less troubled by Trump’s protectionist moves. I met Henry and Noel Filla at their family farm near Osseo, an hour’s drive northeast of Dodge. The Fillas grow conventional and organic crops, including soybeans, corn, hay, and oats. They also own a buffalo farm and a dairy farm that they rent out.

Corn and soybean prices have declined roughly 20 percent since China imposed steep tariffs on those and other crops. Soybeans were the U.S.’ top agricultural export to China in 2017.

Sitting on the Filla’s front porch on a sweltering July afternoon, Henry said he was “maybe a little bit” worried about how the tariffs would impact his bottom line. But he said that he’s glad an American president is finally standing up to China’s unfair market practices, which include currency manipulation, tariffs on protected industries and theft of intellectual property. Henry is willing to bear a little hardship in the short-run because he thinks “the end result will be good.”

“With farming, if you jumped every time something happened, you’d always jump the wrong way,” Henry reasoned. “I can see Trump’s plan to straighten things out. Well, there are going to be some things along the way that make it difficult. People are gonna get mad, people are gonna jump ship. And the media are gonna play it up to get people against it. But the real die-hard farmers, we’re kind of in it for the long haul.”

I asked Henry, who voted for Trump in 2016, if that meant he was also in for Trump for the long haul. “Yeah, in a way,” he said. “You’re gonna buy a Ford car and two weeks later say it’s a piece of junk, and then change to a Kia and drive that for three weeks and then say it’s junk? You can’t just keep jumping ships and then find out the only thing wrong with it is they had the sticker on wrong.”

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The Filla’s patience is born of their respect for the president’s business acumen and the goodwill with farmers they believe Trump has cultivated from the early days of his campaign. “I definitely feel like he made the rural people feel that they were being listened to and that they were important,” Noel said.

“He acknowledges that we’re here,” Henry said of Trump. “He said, ‘We love our farmers.’ He understands that farms are businesses. And that’s why farmers voted for him. He thinks a little bit like we do. [But] there’s going to be some toes stepped on before we can go on.”

A nurse who twice voted for President Barack Obama, Noel supported Trump in 2016 because of his stances on immigration and healthcare. Henry’s support had more to do with what he perceives as Trump’s pro-active approach to problem solving. Henry used the term “doer” to describe Trump at least four times in our conversation.

“I liked him because he’s a little like me,” Henry said. “He’s a doer and a lot of people in rural areas are doers. I’m pretty straightforward. I say it like it is, and I like to do things. I don’t like to talk about it. ‘Oh, we should change the light bulb on the street corner’ and then we talk about it for six weeks.”

The conventional wisdom holds that plunging crop and dairy prices may prompt the Midwest farmers who were crucial to Trump’s 2016 victory to abandon the president and his party in this year’s midterm elections and in 2020.

The White House seems nervous enough about that prospect that it sent Vice President Mike Pence on a three-day swing through the region last week to reassure farmers that any pain would be temporary. And the Department of Agriculture is reportedly devising a plan to assist farmers.

Polls show most Americans disapprove of Trump’s protectionist moves, believing they will hobble the economy. But Trump’s overall approval rating hasn’t been affected, at least not yet.

A Washington Post-Schar School poll conducted in late June and early July put Trump’s approval rating at 57 percent in the 15 states most affected by the tariffs. That’s 5 points higher than on Election Day 2016. Those states include Wisconsin, where rural voters helped Trump become the first Republican to win the state in 32 years.

Trump is buoyed by a strong economy, and the low priority most voters place on trade. Only 4 percent of registered voters felt trade is the most important issue heading into the midterm elections, according to the Post poll. Nearly a quarter named the economy and jobs.

Paul Jereczek thinks Trump and Republicans will lose the support of farmers if the depressed prices continue through the midterm elections, when farmers begin to sign price contracts for 2019. “They’ll turn coat if it hits their pocket books,” he said. “That is what it’s going to take.”

But as Ken’s tears suggested, the Jereczeks’ concerns are more immediate. “It’s an emotional time for us,” Paul said. “The tariffs are just sucking the money out of us. My dad works way more than he should to keep this place going. It’s pretty tough. But I guess we won’t go down without a fight. It’s going to be a fight, whatever happens, to stay viable.”

Daniel Allott (@DanielAllott) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the author of Trump’s America and former deputy commentary editor at the Washington Examiner.

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