Agricultural Policy Review home

APR: Spring 2018 Articles

Download PDF for Spring 2018

Lessons from Previous U.S.-China Trade Disputes

Minghao Li (minghao@iastate.edu), Wendong Zhang (wdzhang@iastate.edu), and Chad Hart (chart@iastate.edu)
Trade issues have recently erupted between the United States and China and the battle over newly announced tariffs has escalated quickly. At the beginning of 2018, the United States imposed tariffs on imported solar panels and washing machines, and China responded by initiating an anti-dumping investigation into US sorghum. In early March, President Trump announced steel and aluminum tariffs with China being one of the primary targets. Within two weeks, China responded by announcing a list of 128 US products that are the targets of retaliatory tariffs effective on April 2, 2018. The list included pork products and ethanol, which are of critical importance to the US Midwest. As those tariffs went into effect, the US Trade Representative announced 25 percent tariffs on $50 billion worth of Chinese imports, along with investment restrictions, and the submission of a case to the World Trade Organization over China’s trade practices. The Chinese government responded immediately with its own tariff package, targeting roughly $50 billion of US imports, including the largest agricultural import, soybeans. For both the United States and China, the $50 billion tariffs are scheduled to take effect in a couple of months. The volleying may continue as President Trump has mentioned the possibility of another round of proposed tariffs on a list of Chinese imports with $100 billion in value.

Environmental Regulation of Hog Feeding Operations

Chen-Ti Chen (ctc@iastate.edu) and Gabriel E. Lade (gelade@iastate.edu)
The US livestock industry has experienced drastic structural changes over the last two decades. The industry has shifted towards greater specialization across production phases, increased reliance on off-farm inputs such as feed, and increased use of production contracts. One trend that is particularly relevant to Iowa policymakers, farmers, and rural Iowans is the increased prevalence, size, and regional intensity of large, enclosed hog feeding operations. Where many of the largest hog-producing states have seen modest increases or even declines in total hog inventories over time, Iowa has seen a steady increase in inventories since 1982. Within Iowa, production concentrates in north-central and northwestern counties.

Current Situation for Iowa’s Major Ag Commodities

Lee Schulz (lschulz@iastate.edu) and Chad Hart (chart@iastate.edu)
There is a lot of uncertainty in agriculture right now, from the delayed onset of spring and the delayed planting that goes with it, to the ongoing trade disputes and trade agreement renegotiations, agricultural producers are adjusting production plans to deal with the uncertainty. This article contains a quick summary of the current situation for Iowa’s major agricultural commodities, based on the latest reports and surveys from USDA. The majority of the information for the USDA reports was gathered before the latest rounds in the US-China trade dispute. However, the outlook highlights the importance of trade in agriculture and shows the avenues where trade will influence production and consumption decisions.

Does Rural Entrepreneurship Pay?

Li Yu and Georgeanne Artz (gartz@iastate.edu)
Rural entrepreneurship can help stimulate local economies by creating local jobs and providing goods and services that improve the quality of life of nearby residents. However, as Reynolds et al. note, rural entrepreneurs can face difficulties through lack of sufficient capital, infrastructure, and access to educated labor. These hardships often result in lower firm entry rates when compared to urban areas and businesses characterized as low-income and low-growth. This leads to the common notion that rural entrepreneurship is necessity driven—entrepreneurs create rural businesses in order to remain in, or relocate to, a rural location.

Do Cover Crops Pay? Net Returns to Corn/Soybean Farmers in Iowa

Alejandro Plastina (plastina@iastate.edu)
Cover crops, which are planted on approximately 700,000 of Iowa’s 30 million acres of farmland, have been found to have varying net returns based on several factors—cover crop species, planting technique, termination method, tillage practices, following cash crop, and the farmer’s years of experience with cover crops. Farmers that don’t use cover crops for grazing livestock or forage tended to consistently derive negative returns. Farmers that used cover crops for grazing livestock or forage and received cost-share payments tended to see positive net returns.