Latest / Trumponomics / Is Trump About to Lose America’s Farmers?

Transcript

Is Trump About to Lose America’s Farmers? · Trumponomics

0:02
Speaker 1: Bloomberg Audio Studios.
0:04
Speaker 2: Podcasts. Radio. News.
0:08
Speaker 3: If you look at a Senate map of America, Democrats
0:12
Speaker 3: have none of these interior states. No seats. These states
0:17
Speaker 3: have been completely red for the past decade, and you're
0:21
Speaker 3: starting to see these cracks, and that could portend some
0:24
Speaker 3: really big changes to America in politics, how the economy works,
0:30
Speaker 3: health care, lots of things in a few years.
0:41
Speaker 4: I'm Stephanie Flanders, head of government and economics at Bloomberg,
0:44
Speaker 4: and this is Trumponomics, the podcast that looks at everything
0:48
Speaker 4: in the economic world of Donald Trump. This week we ask,
0:53
Speaker 4: what's the matter with Kansas? That was the title of
0:56
Speaker 4: a best-selling book more than 20 years ago, which zeroed
0:59
Speaker 4: in on how Republicans had cemented their political support in
1:03
Speaker 4: America's heartland, even among working class voters whose economic interests
1:07
Speaker 4: supposedly the Democrats had championed. But recently, it's the Republicans
1:11
Speaker 4: who've been asking what on earth is happening, with state
1:15
Speaker 4: polls showing that a Democratic challenger might win a Senate
1:18
Speaker 4: seat in Kansas for the first time since the early 1930s. Now,
1:23
Speaker 4: On Trumponomics, we're not usually so focused on the polls
1:26
Speaker 4: and the individual races, but one month away from the
1:29
Speaker 4: midterm elections, it's hard to miss that significant chunks of
1:33
Speaker 4: rural America seem to be, at least for the moment,
1:37
Speaker 4: in play for Democrats for the first time in a
1:40
Speaker 4: very long time. And economics does appear to be a
1:44
Speaker 4: large part of the answer. Farmers and rural workers are
1:48
Speaker 4: often as reliably Republican as they come, but the negative
1:51
Speaker 4: hit from trade wars and federal spending cuts, and above all,
1:55
Speaker 4: recently soaring diesel prices as a result of the Iran
1:59
Speaker 4: war in Donald Trump's second term, all appear to have
2:03
Speaker 4: led at least some of those voters to think again.
2:06
Speaker 4: So what exactly is the matter with farmers and farming communities?
2:11
Speaker 1: And is it temporary? Or are we going to see.
2:14
Speaker 4: More lasting cracks in that coalition that's elected Republicans in
2:18
Speaker 4: the prairies for so many decades? I thought that was
2:21
Speaker 4: worth getting into. I've been meaning to talk about farmers
2:24
Speaker 4: for a while on this program. I'm going to be
2:26
Speaker 4: helped today by Stephen Dennis, Congressional Reporter for Bloomberg, and
2:30
Speaker 4: one of my colleagues who was involved in a recent
2:33
Speaker 4: fascinating on-the-ground piece from Kansas.
2:35
Speaker 1: Steve, thank you very much for doing this.
2:37
Speaker 3: It's great to be here.
2:39
Speaker 1: And Joe Glauber, who's a.
2:40
Speaker 4: Senior Research Fellow now at the International Food Policy Research
2:43
Speaker 4: Institute and Visiting Scholar at.
2:45
Speaker 1: The American Enterprise Institute.
2:47
Speaker 4: And perhaps most importantly, he was previously chief economist at
2:50
Speaker 4: the Department of Agriculture, where he worked for many years.
2:53
Speaker 1: Joe, thank you very much for coming on Trumpanomics.
2:56
Speaker 2: Thank you.
3:01
Speaker 4: So, Stephen, just remind us, why have people been talking
3:05
Speaker 4: a lot, I would say, in the last week or
3:07
Speaker 4: so about some of these prairie states where previously you
3:12
Speaker 4: wouldn't have thought they'd be very interesting, even in a
3:14
Speaker 4: year like this where you think that maybe things are
3:17
Speaker 4: not going to be very easy for the president?
3:20
Speaker 3: Yeah, so if you think about these states, and I
3:23
Speaker 3: would throw Nebraska and Iowa into this mix of unusual
3:28
Speaker 3: battlegrounds this year. states where Democrats haven't competed well in
3:33
Speaker 3: a long time, a lot of Trump policies, economic policies,
3:39
Speaker 3: are hurting these states more than other states. These states
3:44
Speaker 3: rely much more on diesel. People are more likely to
3:46
Speaker 3: drive trucks. They're more likely to have farm equipment that
3:50
Speaker 3: needs diesel. When diesel's at record prices, as it has
3:54
Speaker 3: been the last few weeks, the pain in these areas
3:57
Speaker 3: is higher. You also have the trade wars that affect
4:01
Speaker 3: farmers and farm states more than other places. They have
4:06
Speaker 3: a lot of imported fertilizer that those prices have been
4:09
Speaker 3: going up. So their input costs are going up. Their
4:12
Speaker 3: markets are stressed because of retaliatory tariffs or retaliatory actions
4:18
Speaker 3: by other countries. You also have a lot of sort
4:21
Speaker 3: of lower middle class, working class folks for whom gas prices,
4:27
Speaker 3: diesel prices, are very important and hurt them particularly high.
4:34
Speaker 3: So there's sort of like a quadruple whammy that's hitting
4:39
Speaker 3: these states and hitting Republicans in these states who are
4:43
Speaker 3: extremely strong Trump supporters in Washington at a time when
4:47
Speaker 3: Trump's approval ratings have plummeted. So it's really hard for
4:50
Speaker 3: them to have a lot of distance from the president,
4:53
Speaker 3: even when they might want to. So basically in Kansas,
4:58
Speaker 3: you have Roger Marshall, just a first term Senator. He's
5:02
Speaker 3: turned out to be a pretty weak campaigner. There are
5:05
Speaker 3: a lot of issues that have hurt him politically. And
5:09
Speaker 3: then the Democrats have recruited much better candidates than they
5:13
Speaker 3: have in the past. It's not like the democratic brand
5:16
Speaker 3: has seen some great Renaissance. They are running more independent
5:21
Speaker 3: minded candidates and they really got a star recruit in Kansas.
5:25
Speaker 3: They have this pastor, Adam Hamilton, who is preaching exactly that.
5:31
Speaker 3: His first ad was standing in a Kansas farm field
5:34
Speaker 3: and saying, we're not like the West Coast, we're not
5:36
Speaker 3: like the East Coast, we need to bring people together
5:38
Speaker 3: and be in the middle. And he doesn't talk about
5:42
Speaker 3: being a Democrat in his ads, and that's worked for him.
5:46
Speaker 3: If you think about Kansas, it's got about 25% of
5:49
Speaker 3: the electorate is Democrats, so that's very low, about double
5:53
Speaker 3: that of Republicans, but there are a lot of independents.
5:56
Speaker 3: And he's cleaning up among these independents, and he's even
5:59
Speaker 3: winning some Republican voters who are disaffected with Trump. So amazingly,
6:05
Speaker 3: he's been winning in some of these polls. This is
6:08
Speaker 3: probably not the tipping point state. This state is not
6:11
Speaker 3: going to determine who wins the Senate majority in all likelihood.
6:15
Speaker 3: The Democrats need to win four states. If they win Kansas,
6:18
Speaker 3: they've probably picked up four somewhere else. But it really
6:22
Speaker 3: does have a huge impact down the line, especially if
6:25
Speaker 3: Democrats take power in 2028. Suddenly the aperture for what
6:30
Speaker 3: a Democratic president and a Democratic trifecta could do on taxes,
6:34
Speaker 3: on spending, on health care, gets a lot wider. So
6:38
Speaker 3: this fight is a really important fight for the direction
6:42
Speaker 3: of America. And you're starting to see money starting to
6:46
Speaker 3: flow into Kansas, $ 10 million over the weekend from the Republicans.
6:50
Speaker 3: starting to see some Democratic money flow in as well.
6:54
Speaker 3: And so it's really interesting. If you look at a
6:57
Speaker 3: Senate map of America, Democrats have none of these interior states,
7:03
Speaker 3: no seats. These states have been completely red for the
7:08
Speaker 3: past decade, and you're starting to see these cracks, and
7:12
Speaker 3: that could portend some really big changes to America and politics,
7:18
Speaker 3: how the economy works, health care, lots of things in
7:20
Speaker 3: a few years.
7:22
Speaker 4: I want to sort of rewind a bit on the economics.
7:24
Speaker 4: And I guess also, since we don't talk about it
7:27
Speaker 4: that much on this program, just spend a little bit
7:30
Speaker 4: of time thinking about the economic life of a farmer
7:36
Speaker 4: and the farming communities, because it can definitely be very
7:41
Speaker 4: different and affected by very different factors than... the kind
7:45
Speaker 4: of urban America that we spend most of our time
7:47
Speaker 4: talking about. So Joe, I know you've spent your life
7:50
Speaker 4: thinking about this and I know you also spend a
7:52
Speaker 4: lot of time thinking about agricultural issues as they affect
7:55
Speaker 4: developing countries and particularly the impact of the Iran crisis
8:01
Speaker 4: on farmers around the world. But just thinking about the
8:05
Speaker 4: US and thinking about for the last 18 months, so
8:09
Speaker 4: not just since the Iran crisis, what are the forces
8:12
Speaker 4: that have most affected agriculture agricultural incomes and revenues over
8:18
Speaker 4: the last year and a half?
8:19
Speaker 1: How have they been doing?
8:20
Speaker 2: It's interesting. Agriculture, you tend to treat it as monolithic
8:24
Speaker 2: or here's what the agricultural sector is doing. It really
8:28
Speaker 2: has been a two tails in the sense of the
8:30
Speaker 2: livestock sector has done pretty well. Animal agriculture, beef prices
8:35
Speaker 2: have been at record highs. They're doing pretty well. But
8:38
Speaker 2: the crop side has been struggling and been struggling on
8:42
Speaker 2: the cash side at least. Revenues have been down. They've
8:45
Speaker 2: fallen a lot since 2022 when they were hit record highs, right?
8:50
Speaker 2: As we were coming out of COVID and the Russian
8:53
Speaker 2: invasion of Ukraine, we saw grain prices go to record highs.
8:57
Speaker 2: Farmers were doing really well despite high energy and high
9:01
Speaker 2: fertilizer prices. What happened over the next four years is
9:05
Speaker 2: that prices for those grains really plummeted. And largely because
9:10
Speaker 2: the world responded to high prices by planting more crops.
9:13
Speaker 2: And we had good crops and prices came down. Fertilizer
9:17
Speaker 2: prices came down as well. Energy prices came down, but
9:20
Speaker 2: not as much. And as a consequence, those margins between
9:24
Speaker 2: what they get in terms of cash receipts from selling
9:27
Speaker 2: their products and what they're paying in terms of energy
9:30
Speaker 2: costs and fertilizer costs, those margins have shrunk. And, you know,
9:36
Speaker 2: if you were just looking at cash profits, that is
9:38
Speaker 2: the receipts they get for selling it and what they
9:41
Speaker 2: pay for it, they have been quite low. What has happened, though,
9:45
Speaker 2: is the government's come back in and supplemented those cash
9:49
Speaker 2: receipts with large government payments. And we're having, I think,
9:53
Speaker 2: what will probably be record high payments this year from
9:56
Speaker 2: the government, accounting for almost 30%, 33%. of net farm
10:01
Speaker 2: income coming from government payments.
10:03
Speaker 4: Just on that, we had a quick look at the
10:05
Speaker 4: numbers with the US economists. That's about double what the
10:08
Speaker 4: normal share would be.
10:09
Speaker 1: Is that right?
10:09
Speaker 2: That's right. They're typically in the 10% range, but just
10:13
Speaker 2: with the standard safety net programs, the price and income
10:16
Speaker 2: support programs that have been around The temporary programs that
10:20
Speaker 2: were passed back in the 1930s that are still with
10:23
Speaker 2: us today. But on top of that, there's been a
10:26
Speaker 2: lot of supplemental payments, in part due to the trade wars,
10:29
Speaker 2: in part due to these poor margins that both the
10:32
Speaker 2: administration has provided and now also Congress has come back in.
10:36
Speaker 2: So look at the overall health of the economy. All
10:39
Speaker 2: the aggregate indicators say pretty good. But farmers, on the
10:42
Speaker 2: other hand, are looking at what they were receiving in
10:44
Speaker 2: the market, and that's not looking good. And I think
10:47
Speaker 2: that their concern is looking, they got a lot of
10:51
Speaker 2: money from the government this year and last year, but
10:54
Speaker 2: will that money be there in the future at a
10:56
Speaker 2: time when they're looking at, again, continued high price. And
11:00
Speaker 2: this recent bout with diesel prices, as Stephen mentioned, I
11:04
Speaker 2: think is exactly that. It really hits them very hard.
11:08
Speaker 2: And fertilizer prices as well have been at very elevated levels.
11:13
Speaker 1: And- You mentioned about the tariffs.
11:16
Speaker 4: There's a complicated, because as you said, in the livestock area,
11:19
Speaker 4: that's actually pushed up prices in part because of higher
11:24
Speaker 4: barriers now with Mexico and other places. But you've also
11:28
Speaker 4: had the cost of imports increase dramatically, imported equipment that
11:33
Speaker 4: we don't make in America anymore. And I guess there
11:37
Speaker 4: was also the retaliation by other countries to the trade
11:40
Speaker 4: war sometimes hit the agricultural sector.
11:43
Speaker 2: Both of those things. The liberation date tariffs is originally configured,
11:48
Speaker 2: hit a lot of inputs. And so particularly for countries
11:51
Speaker 2: like Switzerland, who actually we import a lot of pesticides
11:55
Speaker 2: and other things from countries, all those prices were high.
11:59
Speaker 2: The administration came back in late 2025 and early 2026
12:04
Speaker 2: and gave some tariff relief on some of those imported inputs.
12:08
Speaker 2: But that has been one segment of it. The other
12:10
Speaker 2: thing has been, again, the counter retaliation, particularly China, which
12:14
Speaker 2: has been one of our top three markets and at
12:16
Speaker 2: times number one market for the last 15 years. They
12:21
Speaker 2: really just cut back on buying anything. And so for
12:24
Speaker 2: some of our commodities, like soybeans in particular, that's 50%
12:29
Speaker 2: of what we export, almost one out of every acre
12:31
Speaker 2: that's planted in the U.S., that crop goes to China.
12:35
Speaker 2: Last year, exports were cut in half. This year, they're
12:38
Speaker 2: back because of this deal that the administration has worked
12:42
Speaker 2: out with China. But they're nowhere near where we were
12:45
Speaker 2: exporting just three or four years ago. So farmers are
12:48
Speaker 2: looking at that. There's been a lot of talk about
12:51
Speaker 2: all these new trade agreements, but I don't think there's
12:53
Speaker 2: been any gains seen from any of that yet. And
12:56
Speaker 2: I think that's also laying on these guys. And then
12:59
Speaker 2: the last thing is immigration, which farm labor is also
13:02
Speaker 2: a very important component, particularly less so in Kansas, maybe.
13:07
Speaker 2: But if you're talking about a dairy farm or a
13:09
Speaker 2: large dairy farm, which relies heavily on immigrant labor or
13:13
Speaker 2: fruits and vegetable industries or meat processing, those areas, these
13:17
Speaker 2: immigration policies have had some impacts. And so there's a
13:21
Speaker 2: lot of concerns, I think, out there in farm country
13:24
Speaker 2: about these policies.
13:38
Speaker 4: Stephen, there's been quite a big offset in terms of
13:41
Speaker 4: increased subsidies and payments to farmers. You're often sitting in
13:46
Speaker 4: Congress and you're watching what people are talking about in Congress.
13:49
Speaker 4: How much has it been discussed in Congress over the
13:52
Speaker 4: last year? I mean, there's been so much to keep
13:54
Speaker 4: track of. But is it just recently that they're kind
13:58
Speaker 4: of waking up to how difficult it's been? Or actually,
14:01
Speaker 4: would you say there has been a sort of steady
14:03
Speaker 4: drumbeat and that's actually why you've had all these payments?
14:06
Speaker 3: No, I've seen a lot of almost panic from farm
14:10
Speaker 3: state Republicans starting last year. Chuck Grassley, the senior senator
14:15
Speaker 3: from Iowa at one point last year, was worried that
14:19
Speaker 3: we would see a rash of suicides happening. Because input
14:24
Speaker 3: costs were going up, he was worried that there would
14:26
Speaker 3: be a rash of bankruptcies in Iowa. He was like,
14:30
Speaker 3: I hope we act before it's too late. He remembers
14:35
Speaker 3: the 80s where there were a lot of suicides and
14:37
Speaker 3: a lot of farmer bankruptcies then. And he was like,
14:41
Speaker 3: we've got to do something. I also talked to John Bozeman,
14:45
Speaker 3: who chairs the Ag Committee. For months, he and other
14:49
Speaker 3: Republican senators wanted to have an extra $ 20 billion, maybe
14:52
Speaker 3: $ 15 billion bailout package for farmers. It's been hard for Republicans, though,
14:58
Speaker 3: to do anything in Congress. They don't agree amongst themselves.
15:02
Speaker 3: They have very narrow majorities. There are a lot of
15:05
Speaker 3: Republicans who don't want to spend more money. And so
15:08
Speaker 3: a lot of things end up being in Trump's executive
15:11
Speaker 3: order pen, is how a lot of things happen in
15:13
Speaker 3: Washington these days. I've asked John Thune, the Republican leader,
15:18
Speaker 3: many times over the past six months, are you going
15:20
Speaker 3: to do anything on affordability? Are you going to do
15:22
Speaker 3: anything to get the farm bill done? Are you going
15:24
Speaker 3: to get these farm bailout money that a lot of
15:28
Speaker 3: the farm state senators want? And he's talked about pushing
15:32
Speaker 3: these things, but as far as getting a lot of
15:34
Speaker 3: these things to the floor and passed... I think that's
15:37
Speaker 3: one of the stories of if the Republicans lose Congress
15:41
Speaker 3: is they literally ran out of gas. They just couldn't
15:43
Speaker 3: pass bills. They couldn't agree amongst themselves on what to
15:46
Speaker 3: do on affordability, what to do for farm country. Think
15:51
Speaker 3: about E15. This is ethanol, 15% in your fuel tank
15:56
Speaker 3: when you gas up your car. That's a very hot issue.
15:59
Speaker 3: And it divides Republicans between farm state Republicans like Kansas
16:06
Speaker 3: the Dakotas, Iowa.
16:08
Speaker 4: Sorry, can you just explain for people who ethanol is
16:10
Speaker 4: one of those things that you only hear about in America?
16:13
Speaker 3: Yeah, so ethanol is a lot of the corn crop
16:16
Speaker 3: in America is converted into ethanol. And then it's sent
16:21
Speaker 3: to refineries where they add it to gasoline. And so
16:25
Speaker 3: if you go to a typical American fuel pump, it'll
16:28
Speaker 3: say 10% ethanol. Most of the fuel pumps I go
16:31
Speaker 3: to say, 10% ethanol. And there's been a huge push
16:35
Speaker 3: for years to increase that 10% to 15% and make
16:40
Speaker 3: it national. And this has been resisted by the oil companies.
16:44
Speaker 4: Is that entirely to support the agricultural community? Is there
16:49
Speaker 4: any sort of scientific reason why you would want to
16:51
Speaker 4: do that, or efficiency reason?
16:54
Speaker 3: The argument by people like Chuck Grassley and other farm
16:58
Speaker 3: state senators is that this is a national security thing.
17:02
Speaker 3: We have homegrown fuel, we become more energy independent, and
17:08
Speaker 3: that's good for America. That's been their argument all along.
17:12
Speaker 3: It's also good for farm country by creating more demand
17:15
Speaker 3: for corn. And there's a lot of farmers who grow
17:18
Speaker 3: a lot of corn, including Chuck Grassley. But you have
17:20
Speaker 3: Texas senators like Ted Cruz, who is representing the oil patch,
17:25
Speaker 3: and they don't like E15 because that raises their costs
17:30
Speaker 3: and means they sell less oil. At any rate, this
17:34
Speaker 3: has been a long-running fight over many years. The Senate
17:39
Speaker 3: Farm Bill includes E15. I believe the House Farm Bill
17:42
Speaker 3: did not after a big fight, so they didn't get
17:45
Speaker 3: it done. But then the president is trying to get
17:48
Speaker 3: it done via executive order to try to appeal to
17:51
Speaker 3: these farmers. that they're going to be able to sell
17:53
Speaker 3: more of their crops. So these are like, there are
17:57
Speaker 3: many of these smaller fights or in these states, they're
18:01
Speaker 3: not that small. We have another fight about mandatory country
18:05
Speaker 3: of origin labeling. When you go to the supermarket, is
18:09
Speaker 3: the ground beef going to say where it was made?
18:13
Speaker 3: And so there's a big fight in the Senate over this.
18:17
Speaker 3: And Roger Marshall cast a vote in committee very recently.
18:22
Speaker 3: against requiring this label, which is opposed by meatpackers and
18:27
Speaker 3: a lot of the big industrial beef operations, which include
18:31
Speaker 3: a lot of operations in Kansas.
18:33
Speaker 1: And Marshall's the incumbent.
18:35
Speaker 3: And Marshall's the incumbent. He's under pressure. And he basically
18:41
Speaker 3: sided with the sort of the big beef industry, which
18:44
Speaker 3: doesn't like the fact that they'd have to do a
18:47
Speaker 3: lot of and it would be expensive in their eyes
18:51
Speaker 3: to comply with the regulations over sort of the smaller
18:56
Speaker 3: beef operators who want to have that differentiator and say, look,
18:59
Speaker 3: this is American beef. Consumers might buy it more often
19:03
Speaker 3: at the supermarket if they saw that label. So this
19:06
Speaker 3: was a fight that has upset some of the farmers
19:09
Speaker 3: in Kansas who spoke to our reporters there and said, hey,
19:13
Speaker 3: this is a reason why I'm considering not voting for
19:15
Speaker 3: this guy.
19:27
Speaker 4: Stepping back again, Joe, you said at the start, we
19:31
Speaker 4: obviously have seen it in the numbers as well, that
19:33
Speaker 4: that share of farmers' incomes that was due to government
19:37
Speaker 4: subsidies had gone up significantly. Has that offset the hit
19:43
Speaker 4: from tariffs and from other things? Has it done anything
19:46
Speaker 4: to ease the pressure on the diesel or the impact
19:49
Speaker 4: of the higher costs of diesel?
19:50
Speaker 1: I mean, that's been so dramatic.
19:51
Speaker 4: I think it's up, what, 70% since the Iran war started.
19:56
Speaker 2: Certainly, if you listen to the rhetoric of farm groups, no.
20:01
Speaker 2: But I think with any sort of the measures that
20:04
Speaker 2: we're looking at, aggregate measures, the U.S. Department of Agriculture
20:09
Speaker 2: culture puts out on farm income. Again, you can't treat
20:14
Speaker 2: the sector as monolithic, but the aggregate measures are all up.
20:18
Speaker 2: And you would think if farmers were really hurting that
20:21
Speaker 2: we would see this big decline in land prices. They haven't.
20:24
Speaker 2: They aren't increasing at 5% like they were a few
20:27
Speaker 2: years ago annually, but they're still increasing. The other thing
20:31
Speaker 2: is that bankruptcies are a bad statistic to look at
20:35
Speaker 2: just because farmers don't use the bankruptcy code when they're
20:39
Speaker 2: in trouble. The problem is foreclosures. And if you look
20:42
Speaker 2: at the number of loans that are non-performing, they have
20:46
Speaker 2: gone up, but they're still at such low levels compared
20:49
Speaker 2: to even 2020, and particularly compared to what they were
20:52
Speaker 2: in the 1980s when Chuck Grassley was so worried. But
20:57
Speaker 2: in all fairness to farmers, again, they're looking at their
20:59
Speaker 2: cash flows and saying, we're losing money on the cash
21:04
Speaker 2: side of this. But for these government payments, we would
21:11
Speaker 2: be really struggling. And so I'm sympathetic to it because
21:15
Speaker 2: a lot of this money that's come in has been
21:17
Speaker 2: ad hoc supplemental payments that you're getting it this year.
21:21
Speaker 2: There's no guarantee you're going to get it next year.
21:24
Speaker 2: But as Stephen knows, it's hard to bet against that
21:26
Speaker 2: logic when you see it. support come in almost every
21:29
Speaker 2: other year for it seems like so.
21:31
Speaker 1: So you draw the line between the livestock and crops
21:34
Speaker 1: but steven made that sort of mention that there was
21:37
Speaker 1: that dynamic in kansas i wonder whether the difference between
21:41
Speaker 1: the small farmers and the really the sort of the
21:43
Speaker 1: big industrial farmers is probably a much bigger distinction in
21:47
Speaker 1: these kind of contexts have the small farmers done much
21:50
Speaker 1: worse out of the last year and a.
21:52
Speaker 2: Half the hard thing about all this is that The
21:56
Speaker 2: agricultural sector is highly skewed, right? So you have 15
21:59
Speaker 2: some odd percent of the farms accounting for 85% of
22:04
Speaker 2: the production. So if you look at the 85% that
22:08
Speaker 2: aren't producing very much, most of those guys are either retired,
22:14
Speaker 2: so they have retirement income, or they have off-farm income.
22:17
Speaker 2: large off-farm income. So it's more of a resident lifestyle
22:21
Speaker 2: type decision. I don't want to be so blanket on
22:25
Speaker 2: that because obviously you're going to find some.
22:27
Speaker 1: Is that the Chuck Grassington or Scott Besson? Scott Besson
22:30
Speaker 1: also always claims to be a farmer.
22:32
Speaker 2: Yeah. Yeah, exactly. Okay. For those who... where agriculture is
22:38
Speaker 2: their main occupation, yeah, I think that it's just hard
22:42
Speaker 2: to make money if you're really small. It's hard to
22:45
Speaker 2: make money if you're a grain farmer, if you're growing
22:47
Speaker 2: wheat or growing corn or growing soybeans. To make money,
22:51
Speaker 2: you need to have a lot of land. And if
22:54
Speaker 2: you're growing fruits and vegetables, that's a different story. If
22:56
Speaker 2: you have an orchard, that's a different story. The profit
22:59
Speaker 2: margins per acre are much, much higher. Again, Very diverse.
23:04
Speaker 2: But yeah, generally, the larger farmers are the ones who
23:07
Speaker 2: are accounting for the largest share of government payments. Why?
23:10
Speaker 2: Because payments are largely based on land and it's almost tautological.
23:15
Speaker 4: So we have now given people, I think, a fascinating
23:18
Speaker 4: window into the economics and some of the sort of
23:22
Speaker 4: day-to-day challenges of farmers and rural communities. Stephen, I might
23:26
Speaker 4: give the last word to you because you've been so
23:28
Speaker 4: focused on some of these I can't help remembering in
23:32
Speaker 4: some of my history lessons around sort of the 1890s
23:36
Speaker 4: populism in the US, and it was William Jennings Bryan
23:38
Speaker 4: who was in Kansas, and there was a sort of
23:40
Speaker 4: moment where the rural workers were kind of on the
23:45
Speaker 4: same side as the sort of new industrial working class workers.
23:49
Speaker 4: That was clearly something that's long gone, and Democrats have
23:53
Speaker 4: definitely not.
23:54
Speaker 1: Been felt to have been on the side of the
23:56
Speaker 1: rural community for a long time.
23:58
Speaker 4: Do you think any of what we've discussed poses a
24:02
Speaker 4: lasting challenge to that sort of Republican support in these
24:06
Speaker 4: prairie states? Or are we just looking at what really
24:09
Speaker 4: is just a peculiarly toxic combination of policies the last
24:13
Speaker 4: year and a half?
24:15
Speaker 3: Yeah, I think it's like the unanswered question. The Democrats
24:19
Speaker 3: first have to win these races for people to remember
24:22
Speaker 3: this cycle. Beyond now, Josh Turek, who is running, the
24:27
Speaker 3: Democrat running in Iowa against Ashley Hinson in neighboring Iowa,
24:31
Speaker 3: that's a very close race as well. Probably $ 200 million
24:35
Speaker 3: will be spent in that race. Josh Turek is talking
24:39
Speaker 3: about a revival of prairie populism, and I think there's
24:43
Speaker 3: a real chance of that. The Democrats, in order for
24:46
Speaker 3: them to be a real governing party again and having
24:50
Speaker 3: a national impact and not just being a coastal party,
24:53
Speaker 3: which they kind of are now, they need to figure
24:57
Speaker 3: this out. They need to figure out how to win
25:00
Speaker 3: among these rural voters who are under stress now, but
25:03
Speaker 3: sometimes they're not. And, you know, if you look about
25:07
Speaker 3: how people like Adam Hamilton are running, They're doing something
25:12
Speaker 3: different than the National Democrats.
25:15
Speaker 4: And they're running, as you pointed out, they're actually not really,
25:18
Speaker 4: I mean, he considered being an independent candidate. They're staying
25:20
Speaker 4: well clear of the Democrat brand name.
25:23
Speaker 1: Yeah.
25:23
Speaker 3: And instead, they're staying away from some of the social
25:26
Speaker 3: issues that have gotten Democrats in more trouble. They're emphasizing
25:31
Speaker 3: economic issues. And they're also, you know, in Adam Hamilton's case,
25:35
Speaker 3: doing something Democrats haven't done in a long time, which
25:38
Speaker 3: is talk about religion. talk about morality, talk about ethics,
25:42
Speaker 3: talk about Jesus on the campaign trail. That's not really
25:46
Speaker 3: been something that Democrats have done. And Hamilton is talking
25:50
Speaker 3: about those issues when it comes to things like food stamps,
25:54
Speaker 3: talking about that when it comes to things like rural
25:56
Speaker 3: health care. And rural health care is a big problem
25:59
Speaker 3: in America. And so he's saying, hey, maybe we should
26:03
Speaker 3: do something about that. And the other guy just voted
26:07
Speaker 3: to cut health care. and give tax cuts to the wealthy.
26:11
Speaker 3: I mean, that's the kind of argument. If you poll people,
26:14
Speaker 3: should there be tax cuts for the wealthy or cuts
26:17
Speaker 3: in healthcare? Both of those things are unpopular. And that's
26:21
Speaker 3: when you talked at the beginning about that book, What's
26:24
Speaker 3: the Matter with Kansas? It was sort of like, why
26:27
Speaker 3: aren't these people voting the way they think on things
26:30
Speaker 3: like tax cuts for the wealthy and healthcare for rural voters.
26:33
Speaker 1: In a typical kind of patronizing Democrat way.
26:36
Speaker 3: Oh, yes. But there's a potentially fertile ground in states
26:41
Speaker 3: like Kansas for a revival of that prairie populism that
26:46
Speaker 3: the Democrats in the FDR revolution did win a lot
26:51
Speaker 3: of these seats. And frankly, they won a lot of
26:53
Speaker 3: these heartland seats as recently as 15, 20 years ago.
26:56
Speaker 3: And If there's ever a moment where they're going to
27:02
Speaker 3: win them, it's going to be right now when these
27:04
Speaker 3: states are under stress, when farmers are going out to harvest,
27:09
Speaker 3: having to finally buy that big diesel purchase. Some of
27:14
Speaker 3: them have been putting off their diesel purchases in hopes
27:16
Speaker 3: that the prices would come down. They now have to
27:19
Speaker 3: go buy it at $ 6 a gallon. That's going to
27:22
Speaker 3: be what they're thinking about as early voting starts. That's
27:25
Speaker 3: not a position that the Republicans want to be in.
27:29
Speaker 4: As the granddaughter of someone born in a small town
27:32
Speaker 4: in Iowa, not only about a few years after William
27:36
Speaker 4: Jennings Bryan ran for president, I will be particularly interested
27:40
Speaker 4: in what happens in these states in a month's time.
27:42
Speaker 4: But Joe Galbraith, Stephen Dennis, you both really know your stuff.
27:46
Speaker 1: Thanks very much.
27:47
Speaker 3: It's great to be here. Thank you.
27:49
Speaker 2: Thanks a lot. Thank you.
28:01
Speaker 4: Thanks for listening to Trumponomics from Bloomberg. It was hosted
28:04
Speaker 4: by me, Stephanie Flanders, and I was joined this week
28:06
Speaker 4: by Stephen Dennis and Joe Glauber. Trumponomics was produced by
28:10
Speaker 4: Sam Asadi and Moses Ander, with editorial guidance from Megan
28:14
Speaker 4: O'Neill in Bloomberg Economics. Sound design was by Blake Maples
28:18
Speaker 4: and Kelly Gary. Amy Keene is the executive producer of
28:21
Speaker 4: Talk Podcasts, and Cheryl Brumley is head of podcasts at Bloomberg.
28:26
Speaker 4: And to help others find and enjoy Trumponomics, rate and
28:30
Speaker 4: review us highly wherever you listen.