By James Oliphant, Leah Douglas and P.J. Huffstutter
DES MOINES, Iowa (Reuters) - Republican farmers in Iowa say they want Donald Trump as their U.S. president, buoyed by the historic sums of money his administration handed out to farms and despite his talk of trade wars that could tank already stifled U.S. agricultural exports.
Farmers are a politically powerful voting bloc whom Trump has worked to court in the lead-up to Monday's caucuses in Iowa, a top farm state and site of the party's first nominating contest. A Reuters/Ipsos poll showed Trump is the favorite of 49% of Republicans for the party's nomination to run against Democratic President Joe Biden in November.
"Twenty-eight billion for the farmers!" Trump exclaimed at a rally in Clinton, Iowa, on Saturday, referencing federal aid that his administration distributed after trade wars with China, Mexico, and Canada slashed farm exports in 2018 and 2019.
The Trump years indeed brought farmers record cash: about $217 billion in farm payments, including crop support, disaster, and aid programs. That's about $73 billion more than in any prior four-year period since 1933, according to a Reuters examination of U.S. Department of Agriculture (USDA) data.
Adjusted for inflation, the only period with more spending on farmers was 1984 to 1988, when a farm crisis caused by land and commodity price bubbles battered rural America.
The American farm economy is in a precarious state as the 2024 campaign picks up pace.
High production and labor costs, rising interest rates, falling commodity prices and smaller direct government supports contributed to a 20% drop in net farm incomes in 2023, according to the latest USDA forecast.
Trump, who easily defeated Biden in Iowa in the 2020 presidential election, has signaled that his second four-year term would bring more trade conflict with China and other partners, including the possibility of a 10% universal baseline tariff for most imported goods.
China did not meet its obligations for agricultural purchases under a 2020 trade deal signed with Trump, according to data from the U.S. Census Bureau.
But the prospect of another trade war doesn't concern supportive Iowa farmers interviewed by Reuters.
"People didn't love the results of Trump's trade war, but we knew it had to happen," said state Representative Bobby Kaufmann, who runs a family farm in Muscatine, Iowa, and advises the Trump campaign on farm issues. "You had trade deals that were lopsided. For decades, American presidents were taken advantage of."
A survey commissioned by trade publication Agri-Pulse released on Wednesday showed some 39% of 605 farmers said they would vote for Trump, compared with 19% for Republican challenger Ron DeSantis and 8% for Biden.
Derek Wulf, a fifth-generation cattle rancher from Hudson (NYSE:HUD), Iowa, sees the former president as a strong advocate despite the trade conflict.
"He stood up for us. He stood up for agriculture," said Wulf, who also serves in the state legislature. "We were more than willing to endure that pain (from the trade wars)."
Chicago Board of Trade corn futures ended 2023 with the biggest yearly drop in a decade. Grain exports are lagging as record harvests abroad depress demand for U.S. corn and soybeans, raising the stakes of potential trade conflicts.
TRADE AID, AND THEN SOME
Farm income was already down in 2018 when Trump's trade wars began. By the end of that year, soybean exports to China - which imposed tariffs up to 25% on the grain in response to Trump's tariffs on Chinese goods - had fallen by 74%, according to USDA data.
To offset the blow, the Trump administration distributed about $23 billion to farmers in 2018 and 2019, according to a 2022 report by the Government Accountability Office.
Iowa got the second most money after Illinois, over $2.4 billion, and each farm in the Midwestern state got an average of $42,477, the report showed.
More federal dollars bought commodities from farmers for emergency food programs.
All that cash made farmers whole - and then some. A 2021 study by the University of California-Davis found that soybean farmers received about $5.4 billion more in aid than they lost in price impact.
For some, Trump's approach does have a cost. Some farmers are turning to other candidates, put off by the prospect of more trade upheaval.
"None of us wants a government check," said Lance Lillibridge, a farmer in Vinton, Iowa and former president of the Iowa Corn Growers Association who supports DeSantis and chairs his farmers' coalition.