By Jacob Bunge
About two months into the Trump presidency, Ron Prestage
clutched a shovel and grinned at a photographer on an Iowa
cornfield. He had $309 million riding on 160 acres near the town of
Eagle Grove, the site of a future pork plant that would help his
family's company, Prestage Farms Inc., tap surging U.S.
Just weeks after bulldozers began rolling, though, President
Trump came within a pen stroke of upending Mr. Prestage's plans,
preparing to announce the termination of the North American Free
Trade Agreement. Trade battles with Mexico, Canada and China that
followed cut into pork-producer profits in a three-year
roller-coaster ride that threatened the Prestage family's
"He's made things more volatile, with the saber-rattling," said
Mr. Prestage, 65. "It does create a lot of angst and concern about,
'Oh my God, what is he doing?' "
Yet Mr. Prestage plans to vote for Mr. Trump, as he did in 2016.
He and many other farmers say they believe a Biden presidency would
bring stricter environmental regulations and higher taxes, among
other concerns. Many are in competitive Midwestern states that
might tip the election.
A September poll by agricultural publication Farm Futures found
75% of farmers surveyed in July planned to vote for Mr. Trump,
compared with 72.6% ahead of the 2016 election.
Broader rural communities, too, lean toward Mr. Trump: A
September poll of rural voters by Zogby Analytics and
agriculture-industry publication Progressive Farmer found 49.5%
backed Mr. Trump and 32% backed former Vice President Joe Biden;
about 29% of respondents were farmers.
Mr. Trump's tenure has been a conundrum for farmers. His trade
moves have opened doors for more of their exports -- but have at
times sent U.S. agricultural markets swooning and provided openings
for rival food-producing countries. His environmental deregulation
soothed farmer fears of government overreach -- but his harder line
on immigration has made it tougher for some dairies and meatpacking
plants to staff jobs.
U.S. net farm income this year is on track to be $102.7 billion,
65% higher than 2016, according to the U.S. Agriculture Department.
But government payments have come to make up more than one-third of
that, versus 21% four years ago. To soften the impact of the
pandemic and trade wars, Mr. Trump's USDA projects it will pay a
record $37.2 billion this year to farmers and ranchers, with the
administration in mid-September pledging an additional $14 billion
Some farmers say Mr. Biden would be a welcome change, including
Chris Petersen, 65, who raises hogs near Clear Lake, Iowa. Mr.
Trump's trade moves, he said, will drive importers like China
toward producers such as Brazil or Ukraine. He feels USDA Secretary
Sonny Perdue caters more to big farming operations over small
Under a Biden administration, Mr. Petersen said, farmers would
have a better shot at fair treatment by big agribusinesses, and
rural America would have better access to health care. As for Mr.
Trump, he said, "The farmers have gotten taken to the cleaners by
His fellow Midwest farmers mostly side with Mr. Trump. About 82%
of Iowa farmers in a September poll by agriculture-industry
publisher Farm Journal Inc. said they intended to vote for Mr.
Trump and 12% for Mr. Biden; in a 2016 Farm Journal poll, 84%
planned to vote for Mr. Trump, 6% for Hillary Clinton.
In Minnesota, 87% of farmers polled by the Farm Journal in
September backed Mr. Trump. A Marquette University poll of
Wisconsin farmers over the past year found 55% support Mr. Trump
versus 36% for Mr. Biden.
Four years ago, Midwest farmers faced sagging crop prices after
years of bumper crops. Cheap grain encouraged farmers to build more
poultry and hog barns, reducing livestock prices. Many farmers
looked to exports while taking on more debt and looking to cut
Mr. Prestage, who said he had voted for Republicans and
Democrats, hadn't immediately gravitated to Mr. Trump. The
candidate had pledged to pull out of a Pacific-region trade deal
Mr. Prestage had spent years pushing in Washington.
By November 2016, though, Mrs. Clinton had also become critical
of that deal. A Clinton administration, Mr. Prestage feared, would
empower the Environmental Protection Agency, translating to
regulations like the 2015 Waters of the U.S. rule that aimed to
expand Clean Water Act protections into more waterways. The rule --
some states sued, and it wasn't implemented nationwide -- raised
alarm in farm country that drainage ditches and rain-formed ponds
on fields could become federally regulated.
Prestage Farms, based in Clinton, N.C., is among America's
biggest hog and turkey producers, operating farms and facilities in
the Carolinas, Oklahoma, Iowa and Mississippi. It employs around
3,000, and its turkeys become Kraft Heinz Co.'s Oscar Mayer lunch
meat and its hogs, Smithfield Foods Inc. bacon.
Mr. Trump took office in 2017 as the $23.4 billion U.S. pork
industry was primed for growth. Profits were strong and exports
were rising, especially to burgeoning markets like China.
Mr. Trump began easing farmers' concerns. In February 2017, he
ordered the EPA to replace the water rule. For Prestage's pig
farms, which market around 3.8 million hogs annually, that reduced
potential liabilities when spreading hog manure on fields.
Mr. Trump continued vowing to terminate or replace Nafta, which
underpinned $38 billion in U.S. agricultural exports annually.
Though Prestage sold hams and turkey to Mexican buyers, Mr.
Prestage said, aspects of Nafta convinced him it left the U.S. at
an overall disadvantage.
Mr. Trump closed 2017 by signing a tax overhaul he said would
ease burdens on U.S. workers and family farms and which a USDA
analysis projected would reduce hog farmers' average tax rate to
16.3% from nearly 20%.
In March 2018, he levied tariffs on foreign-made steel and
aluminum. By July, Mexico fired back with tariffs of as much as 20%
on U.S. pork products. China added new tariffs amounting to 50% on
U.S. pork, on top of existing duties. With U.S. pork made pricier
by tariffs, German and Spanish pork companies raced to export more
of theirs, particularly to China.
The tariffs hit as low crop prices and expanding livestock
production had U.S. farm incomes on track to hit their lowest in
over a decade, according to the USDA. A strengthening U.S. dollar
made American farm goods more expensive on global markets. Mr.
Prestage said he complained to the USDA's Mr. Perdue: "Don't forget
who your friends are." Mr. Perdue assured him that the
administration trade team understood farmers' plight and that Mr.
Trump loved farmers, Mr. Prestage said.
Mr. Perdue in an interview acknowledged the trade tumult farmers
faced, saying Mr. Trump's approach has corrected unfair practices
and positioned the farm sector to do more business abroad. Federal
aid payments are made based on farms' production, though payments
are capped for the biggest farms, he said, and "Every farmer, large
or small, is treated the same."
The USDA in July 2018 outlined a $12 billion program to backstop
trade-hit farmers, including $559 million in government-funded pork
purchases to prop up prices.
Mr. Prestage dealt with bouts of insomnia, he said, over the
gamble of opening the new Iowa plant during a trade war. He and his
family decided to press on.
U.S. pork exports to China fell nearly one-third that year.
Farmers' per-pig returns dropped about $40 from July to August
2018, according to Iowa State University estimates, and producers
ended the year losing about $10 a hog. That negated any benefit
from Mr. Trump's tax overhaul, Mr. Prestage said.
At the American Farm Bureau Federation's January 2019
convention, Zippy Duvall -- the group's president and a Georgia
chicken and cattle producer -- acknowledged hardships farmers faced
but said: "As bad as 2018 was on the farm, 2018 will go down in
American Farm Bureau history as one of the most productive
agricultural-policy years in our history." He noted the Trump
administration's push to expand corn-based ethanol use, ease
environmental regulations and exempt cattle ranchers from having to
use electronic logging devices.
"The runway for our patience is going to be determined by the
financial situations on our farms," Mr. Duvall said at the
convention, referring to Mr. Trump's trade battle with China,
adding, "We're gonna hang with him."
When Mr. Trump took the stage a day later, he emphasized the
billions of dollars the USDA had directed to farmers. He talked of
his administration's moves to cut estate taxes and expand rural
broadband access, pledging to roll back more regulations. Mr.
Trump, the first president since George H.W. Bush to attend, has
spoken at the annual event for the last three years.
The Farm Bureau doesn't endorse political candidates, a
spokeswoman said. Mr. Duvall said in a statement Sunday that the
group "works with administrations on both sides of the aisle to
improve the lives of farmers."
With government payments rising to their highest in 12 years,
overall farm income in 2018 increased about 8%. Crop prices
remained low and tariffs weighed on prices for goods like meat and
milk. Farm bankruptcies in regions covering major farm states
climbed in 2018 to the highest level in at least a decade, federal
Prestage's prospects began looking better in Iowa. China's
deepening need for pork, exacerbated by a disease the USDA
estimated wiped out more than 40% of the country's own hogs,
brought Chinese buyers looking to order pork when Prestage's plant
could supply it. With Mr. Trump's late-2018 signing of the
U.S.-Mexico-Canada trade agreement, inquiries came from Mexican
buyers and U.S. retailers.
In November 2019, after Mr. Trump called a trade truce with
China, pork exports boomed. Prestage's Iowa plant turned its first
monthly profit, ahead of expectations.
Then in February, Mr. Prestage said, Chinese buyers called: The
coronavirus outbreak was cutting into Chinese meat consumption, and
they planned no further orders from Prestage until the disease came
under control. As Covid-19 spread in meat plants, Prestage spent
heavily on safety gear, sick pay and testing employees. Hog futures
fell more than one-third over the first half of 2020, then surged
back, rising 36% in September.
Prestage's hog business is on track to lose money for a third
straight year, Mr. Prestage said.
Platforms in 2020
Mr. Trump, if re-elected, would push for increased farm exports
to China and improved trade terms with partners like the United
Kingdom and the European Union, a Trump-campaign official said. He
would work with Congress to overhaul immigration and make it easier
for U.S. farmers to hire immigrant workers, she said.
The USDA's Mr. Perdue said that farm income has grown despite
trade battles and that farmers backed Mr. Trump's efforts to push
for better terms.
"The president's style is probably not the style of many
people," he said, "but the fact is he gets stuff done."
Mr. Biden has said he would scale back Mr. Trump's trade wars
and enlist allied countries in a front against China's practices.
He has said he would double government-loan sizes for beginning
farmers and develop regionalized supply deals between farmers and
schools, hospitals and other government institutions, providing
farmers new markets for crops, produce and meat.
He has outlined a plan to pay farmers for sequestering carbon in
soil, and like Mr. Trump, has pledged to expand ethanol and rural
"What's envisioned is creating additional market opportunities,"
said Tom Vilsack, USDA secretary under the Obama administration,
who helped craft Mr. Biden's rural plan. Even a modest number of
farmers and other rural voters backing Mr. Biden could be
meaningful in swing states, he said.
Howard Hill, 76, who raises hogs, cattle and crops near
Cambridge, Iowa, said Mr. Trump's trade fights were necessary to
ensure fair play, and he praised the administration's moves to roll
back environmental regulations. "Overall," he said, "I'd say ag is
probably in better shape today than it was."
If Mr. Biden is elected, Mr. Hill said, he worries about higher
Biden aides have said he would support returning to the
estate-tax structure in place in 2009 before changes to the law.
That would lower the exemption and raise the rate. Mr. Biden also
has proposed changing capital-gains rules in ways that could
require tax payments on appreciated assets upon death, instead of
the income-tax-free inheritance that happens now.
Mr. Prestage worries Mr. Biden would give priority to
environmentalism over agriculture and business. On social issues
and law enforcement, he said, he worries Mr. Biden may follow
more-liberal Democrats, whom he sees drifting further from his
views on personal accountability.
"You're entitled to have what you earn," he said, "but not
entitled to take it from your neighbor who worked harder than
Mr. Biden has pledged not to raise direct taxes on people making
less than $400,000 a year, a campaign spokesman said, and his
policies on climate change would help protect farmers' crops from
In speeches, Mr. Biden has distinguished between protesting and
rioting, and said looters should be prosecuted.
The Trump administration will likely pay $45 billion directly to
farmers this year, according to University of Missouri agricultural
economists. But Mr. Prestage said government payment caps meant
little of his losses would be covered.
In August, he was reviewing plans to build a turkey plant in
South Carolina -- a safer gamble than pork, he said, because turkey
is less export-reliant.
And Mr. Trump remains the safer 2020 bet, he said: "I'll take
the good with the bad."
--Richard Rubin contributed to this article.
Write to Jacob Bunge at email@example.com
(END) Dow Jones Newswires
October 19, 2020 12:04 ET (16:04 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.