Trump tariffs, shipping fees could take a big bite out of Colorado’s wheat and potatoes industry
Colorado wheat farmers face new worries as the Trump administration plans to impose $1 million+ fees on Chinese-built cargo ships. The move aims to boost U.S. shipbuilding but could raise export costs, making Colorado wheat less competitive globally. Farmers fear price drops and financial strain as half of Colorado’s winter wheat is sold overseas.
Colorado farmers and ranchers may have breathed a bit easier when tariffs were delayed. But a new Trump administration plan to slap steep fees on Chinese-made cargo ships used to carry their goods to market is a new sense of worry.
The administration in February announced it planned to charge $1 million or more in fees on Chinese ship companies or Chinese-built vessels, some of which are used to transport Colorado wheat to foreign markets.
The fees are part of a Trump administration effort to revive shipbuilding in the U.S. and it has strong bipartisan support in the U.S.
But some grain exporters are concerned that it would take years of work to build more U.S. ships and currently, there are only 14 U.S.-flagged bulk ships for moving corn, soybeans or other commodities.
Brad Erker, executive director of the Colorado Wheat Growers Association, said the plan would impose a fee on “any vessels that are not U.S. built or U.S. flagged docking in U.S. ports,” and that would not only raise the shipping cost of getting Colorado wheat to Japan, Africa and the Philippines, but also make Colorado wheat too expensive for those markets.
Erker said half of Colorado’s winter wheat crop gets exported.
So the people who will feel the impact of the new fees the most are farmers, he added. “I mean, usually the costs all get passed on back to the farmer, because it all gets reflected in what the farmers are paid for the grain. And so, you know, usually, if the middlemen don’t absorb the cost, then it gets passed back to the farmer.”
Even though none of these changes have “hit yet,” Erker said farmers are concerned, because the price of wheat has been low for a while. “So it’s already kind of very break even, or small profit margin, or negative profit margin. So any hits to the price would really make it tough. And the crops are already in the ground. You know, we plant our winter wheat in the fall.”
If places like the Philippines stop buying Colorado wheat, he said, it would create a surplus, making the price of wheat drop even further.
Erker said the wheat growers association is in favor of trying to do something to stimulate the shipbuilding industry in the U.S., because “it’s not good that it’s currently all built in Asia and all goods are transported on Chinese ships.”
But he says they don’t think “this is the right way to do it if it shuts down our exports,” because “we’re really export dependent” with one half of the wheat crop, “and we’re consuming all the wheat in the U.S. that we need to consume already.”
To read more about Wheat News continue reading Agriinsite.com
Source : Colorado Sun
