By JAMIE SEARS RAWLINGS

Kentucky Correspondent

WASHINGTON, D.C. — With agriculture in the crosshairs of the U.S. trade war with China, leaders in affected crops are looking anxiously into the future as prices fall and doubts rise.

The latest are alfalfa hay producers, who exported 210,721 metric tons (MT) of their crop in August, according to the USDA’s Foreign Agricultural Service (FAS). The largest recipient of those exports, say industry officials, was China.

“It is too early to estimate how much impact the tariffs will have on forage exports,” said Sue Arnold, executive director of the National Hay Assoc. (NHA). “But we know that impact will be negative.”

The NHA and its sub-group, the U.S. Forage Export Council, are watching the talks closely, while the effects start trickling in to its members.

“With already tight margins, the Chinese market can't bear the costs of this new tariff,” Arnold said. “Contracts for new orders are down and there has been a delay on some orders that were already signed.”

The FAS confirmed the decline, saying that year-to-date alfalfa hay exports through August totaled 1,686,761 MT, a 9 percent decline from the same period in 2017.

Arnold said her organizations are working proactively to slow the impacts by establishing new markets and reaffirming existing relationships with Chinese customers.

“The United States is the largest producer and exporter of grass hay, the foundation of the diet for grazing animals such as cattle,” she explained. “Even so, only 5 percent of U.S. grass hay is exported, with the rest used domestically. Forage products are exported primarily off of the West Coast because the moisture content of the hay there is low enough that it can be loaded in a container and shipped across the ocean successfully.”

Because of this, Arnold and other regional hay experts are optimistic that central U.S. producers will be shielded somewhat by their low export rates. “This region will only be affected if some of the hay that was meant for export enters the domestic market. It is too early to know if that will happen.”

Tom Keene, agronomy specialist with the University of Kentucky’s Department of Agriculture, agreed that supply and demand will be the key factor in determining if, or how much, regional producers will feel a pinch from the tariffs – though he pointed to an increase in price and not a decrease in production as the most likely possible outcome.

Though Keene said his state has more cash hay producers now than it has in the past, even those producers are only exporting state-to-state. Speaking regularly with growers in Kentucky, he believes they will be able to take care of their own on-farm requirements for the crop.

“We had very little carryover from last year’s crop because of the winter we had and the cold spring,” he noted.

“The first cutting in Kentucky was light in terms of what we’d normally expect, but because of the wet season we’ve had, most of the farmers I’ve talked to have said that those rains have allowed them to catch up on their production in subsequent cuttings, so at this point in time, I feel like we’re going to have plenty of hay to fill our needs on-farm.”

Protected or not, Wallace Tyner, a professor in the Purdue University Department of Agricultural Economics, said nearly everyone continues to lose as long as the trade war continues.

“Our estimate is that the U.S. and China each lose $2.6 billion a year just because of the agricultural tariffs,” he said. “In the U.S., the $2.6 billion is focused on ag producers, specifically soybean producers. In China, it’s spread all over the economy.

“But the bottom line is that it’s lose-lose. For the U.S. and for China, each of us loses if this continues.”