Map shows how the U.S.-China trade dispute is hurting American farmers

American farmers are expected to traverse a rocky financial road in the coming months.

  • American farmers are seeing economic losses as a result from the U.S.-China trade dispute.
  • Farmers of soybeans, which is the most imported U.S. crop in China, have been hit especially hard.
  • All agricultural commodities are at risk.

American farmers are suffering economic losses from a U.S.-China trade dispute that shows no signs of slowing down.

On Monday, the Trump administration announced plans for the U.S. to impose a 10-percent tariff starting Sept. 24 on $200 billion worth of Chinese goods, increasing to 25 percent on Jan. 1. The Chinese government responded a day later by announcing new tariffs on U.S. goods worth $60 billion.

Losses across the country

A new map from the U.S. Department of Agriculture's Economic Research Service, which shows year-over-year changes in net cash farm income, illustrates how farmers in all regions of the U.S. are, in part, already losing money from the tit-for-tat retaliatory measures.

Each region of the country specializes in certain crops, for example:

  • Basin and Range: beef and wheat
  • Heartland: soybeans and corn
  • Northern Crescent: dairy
  • Northern Great Plains: wheat, corn, soybeans
  • Prairie Gateway: wheat, corn, soybeans
  • Fruitful Rim: fruits, citrus fruits, vegetables
  • Mississippi Portal: cotton, soybeans, corn
  • Southern Seaboard: cotton, peanuts, rice

"All of these commodity prices are linked together," Gary Schnitkey, Professor in Farm Management at the University of Illinois, told Yahoo Finance. "If soybean prices fall, so do corn and wheat."

American growers of soybean, which is the most-imported U.S. commodity in China, are expected to be hit hardest by the trade dispute. In 2017, China imported from the U.S. about 33 million tons of soybeans, which are used to feed livestock and make cooking oil. If China can find another source for its soybeans, such as Brazil, the U.S. could see economic losses in the billions.

"On the U.S. side, farmers will suffer the most from the imposition of Chinese tariffs on U.S. soybeans," Loren Puette, director of Taiwan-based research firm ChinaAg, told DW. "To have the Chinese market shut down for these farmers would be a major financial blow," Puette says.

Still, China would likely suffer in the transition, too.

"The annual loss in U.S. economic well-being would range between $1.7 billion and $3.3 billion," said Wally Tyner, an agricultural economist at Purdue University. "Chinese economic well-being also falls if they impose a tariff, in some cases as much or more than for the U.S. The reason for that is that soybean imports are very important to their domestic economy."

Some have suggested an additional reason why China is targeting soybeans: to turn soybean farmers, many of whom are based in red states, against President Donald Trump ahead of the midterm elections.

"With the midterm elections only a few months away, we would expect China to keep the pressure turned up," John LaForge, head of real asset strategy at the Wells Fargo Investments Institute, wrote in a note to clients. "But soon thereafter… we would expect to see some relief for U.S. soy prices and U.S. soy exporters."

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Researchers at the University of Colorado Boulder found that the fatty 10(Z)-hexadecenoic acid from the soil-residing bacterium Mycobacterium vaccae aids immune cells in blocking pathways that increase inflammation and the ability to combat stress.

The study's senior author and Integrative Physiology Professor Christopher Lowry described this fat as "one of the main ingredients" in the "special sauce" that causes the beneficial effects of the bacterium.

The finding goes hand in hand with the "hygiene hypothesis," initially proposed in 1989 by the British scientist David Strachan. He maintained that our generally sterile modern world prevents children from being exposed to certain microorganisms, resulting in compromised immune systems and greater incidences of asthma and allergies.

Contemporary research fine-tuned the hypothesis, finding that not interacting with so-called "old friends" or helpful microbes in the soil and the environment, rather than the ones that cause illnesses, is what's detrimental. In particular, our mental health could be at stake.

"The idea is that as humans have moved away from farms and an agricultural or hunter-gatherer existence into cities, we have lost contact with organisms that served to regulate our immune system and suppress inappropriate inflammation," explained Lowry. "That has put us at higher risk for inflammatory disease and stress-related psychiatric disorders."

University of Colorado Boulder

Christopher Lowry

This is not the first study on the subject from Lowry, who published previous work showing the connection between being exposed to healthy bacteria and mental health. He found that being raised with animals and dust in a rural environment helps children develop more stress-proof immune systems. Such kids were also likely to be less at risk for mental illnesses than people living in the city without pets.

Lowry's other work also pointed out that the soil-based bacterium Mycobacterium vaccae acts like an antidepressant when injected into rodents. It alters their behavior and has lasting anti-inflammatory effects on the brain, according to the press release from the University of Colorado Boulder. Prolonged inflammation can lead to such stress-related disorders as PTSD.

The new study from Lowry and his team identified why that worked by pinpointing the specific fatty acid responsible. They showed that when the 10(Z)-hexadecenoic acid gets into cells, it works like a lock, attaching itself to the peroxisome proliferator-activated receptor (PPAR). This allows it to block a number of key pathways responsible for inflammation. Pre-treating the cells with the acid (or lipid) made them withstand inflammation better.

Lowry thinks this understanding can lead to creating a "stress vaccine" that can be given to people in high-stress jobs, like first responders or soldiers. The vaccine can prevent the psychological effects of stress.

What's more, this friendly bacterium is not the only potentially helpful organism we can find in soil.

"This is just one strain of one species of one type of bacterium that is found in the soil but there are millions of other strains in soils," said Lowry. "We are just beginning to see the tip of the iceberg in terms of identifying the mechanisms through which they have evolved to keep us healthy. It should inspire awe in all of us."

Check out the study published in the journal Psychopharmacology.