The U.S.-China trade war has taken its toll on everything from cattle to citrus to manufacturing.
But two other commodities in Arizona are suffering economic hits of their own: cotton and pecans. The former represents about $105 million in export value for Arizona, and is on the state seal. The latter, while not necessarily a traditional major player in trade with other countries, has seen a higher demand from China. The country has increased its demand for large in-shell pecans, which has spurred on production in multiple states in the U.S., including here in Arizona where an estimated 26,000 acres of pecans are in production.
Pecan and cotton farmers in Arizona have started to suffer as a result of the constant back and forth of the trade war with China. Prices on these crops have fallen the past few months as a result with no end in sight. Now, farmers and organizations, like the Arizona Farm Bureau, are speaking out.
“Arizona exports 70 percent of its cotton, of that, 20 percent is sent to China. With these statistics, it is easily said that the current trade war with China is greatly affecting our agriculture producers,” said Tyler Davis, Government Relations Manager for the Arizona Farm Bureau Federation. “In an already unstable market, farmers and ranchers are seeing the lowest incomes in recent history. This poor market coupled with the trade war is making for an unpredictable and struggling year.”
Back in June, prices for cotton were seeing an average of about 95 cents per pound. Since then, the prices have plummeted to a meager 62 cents per pound.
Before the trade war began, farmers in Arizona were exporting more than 20 percent of their crops to China.
For pecan farmers, they’ve seen a mirrored issue in the price for their crops, bearing witness to a major roller coaster drop from $3 a pound to under $2 a pound.
After retaliatory tariffs were put into place last year, there was an immediate dip in pecan prices of nearly 40 percent. Revenue losses reflected anywhere between $900,000 to $1.6 million, a major hit for medium-sized farmers. Before the trade war started, Chinese importers were flooding their storage rooms with about 100 million pounds of pecans. Now, they see about nine million pounds.
Much like importers who began purchasing items like bell peppers and cucumbers here in Arizona instead of tomatoes during the controversial end to the Tomato Suspension Agreement, Chinese importers have either been buying less pecans or opting for substitutes.
The Trump administration is still in negotiations with their Chinese counterparts and recent threats of tariffs have been pulled back or limited. Some economists say that all China has to do is wait it out, the ball essentially being in their court instead of the United States’. And while China waits, pecan farmers and cotton farmers are seeing their fields and their pocketbooks dry up.
And while a $12 billion aid package from the Trump administration to farmers across the country has put a bandage on the bleeding, Davis sides with the farming community in arguing that they would much rather be in a market-driven landscape.
“A mutually beneficial agreement needs to be struck between the two countries and the tariffs need to be relinquished. The United States and China have the largest economies in the world. It is in the interest of both countries to find common ground where each country wins,” said Davis.
This story was originally published at Chamber Business News.