WASHINGTON -- Donald Trump is boasting that he's made farmers "really happy." He's not wrong, but it's not just the trade deal that's left farmers optimistic for 2020.
Analysts are saying the accord signed this week mostly just takes trade back to normal for American agriculture. China has committed to $32 billion in additional purchases over two years, but that buying will be market dependent and retaliatory tariffs are still in place. Even the status quo is still a welcome relief after more than a year of escalating tensions.
The thing that's really moved the needle for farmers is Trump's $28 billion farm bailout. The trade aid meant incomes rose in a year when they were widely expected to fall.
Even better news: U.S. Agriculture Secretary Sonny Perdue just confirmed he's expecting the administration will make the third and final payment for the aid package, even with the China deal. Perdue said those checks should be coming "imminently." That extra income boost underscores why farmers are feeling good in places like Iowa's Sioux County, the top agricultural producer in a state that's No. 1 for corn and hogs.
"I'm really optimistic," said Chris Ten Napel, who farms 2,500 acres (1,012 hectares) and raises 15,000 hogs a year in a family operation with his father and brother in Sioux County. "Things are looking up, you might say."
In a growing season marked by unrelenting rains, record-late planting and depressed prices, farmers like Ten Napel still managed to come out ahead thanks to hard work, some luck, and especially that Trump bailout.
In fact, the U.S. Department of Agriculture projects national net farm income for 2019 will be up more than 10% to the highest since 2013, with the bailout payments accounting for the increase.
There are other signs of shored up finances: Farmers became less reliant on loans at the end of 2019, with lending activity declining for a second straight quarter, the Kansas City Federal Reserve said Thursday. Meanwhile, rural economic sentiment began the year positive, reaching the highest point in 18 months, according to a Creighton University survey.
"Without the trade aid, almost no one would have made money," said Eric Walhof, president of Northwest Bank in Sioux Center, Iowa. About half the bank's farm borrowers turned a profit last year, and the rest had what he called "manageable" losses.
Just a few months ago, that would've seemed nearly impossible. Ten Napel remembers one 48-hour stretch that summed the whole dreadful thing up. He spent it on his tractor, catching one measly hour-long nap in the cab, as he raced through a rare dry spell to plant soybeans he figured might never fetch much of a profit.