Farmers already hurt by Trump's trade war prepare for more pain — from the government shutdown

Key Points
  • Some farmers were expecting insurance checks by the end of the month to cover the hit from the trade war, says Tim McGreevy, CEO of USA Dry Pea & Lentil Council.
  • Now that will be delayed thanks to the shutdown, he says.
  • "Farmers are struggling right now," says McGreevy.
Here's how the government shutdown is impacting farmers
Here's how the government shutdown is impacting farmers

American farmers, already hurt by the U.S.-China trade war, are preparing for more pain ahead, thanks to the government shutdown, according to Tim McGreevy, a Washington-based farmer and the CEO of USA Dry Pea & Lentil Council.

Chinese tariffs on U.S. agriculture, imposed in response to U.S. duties on goods from China, have caused crop prices to drop. For pulse crops — dry beans, dry peas, chickpeas and lentils — that means a cut of 30 percent to 60 percent, McGreevy told CNBC on Monday.

However, last spring about 60 percent of pulse farmers took out what's called revenue crop insurance, which protects against price drops like this, he said on "The Exchange."

"We expect to have a fairly significant revenue insurance payment, but we have to have the harvest prices announced," he said.

Arizona farmer Jim Chilton leaves after shaking hands with US President Donald Trump during the annual American Farm Bureau Federation convention in the Ernest N. Morial Convention Center in New Orleans, Louisiana on January 14, 2019.
Mandel Ngan | AFP | Getty Images

Those are supposed to be announced on Friday, resulting in payouts by the end of January. However, the analysts who analyze the data are on furlough. That means a delay for farmers waiting for much-needed funds.

"It's going to be millions of dollars to pulse farmers when these harvest prices actually get announced," McGreevy said.

Now in its 24th day, the shutdown is the longest in U.S. history, and there appears to be no resolution in sight. The sticking point is President Donald Trump's insistence that funding for his border wall be included in the spending package.

On Monday, the president urged farmers to stick with him when he addressed the Farm Bureau at its annual convention in New Orleans.

He also said his policies would help the agriculture industry, even if they caused short-term pain.

However, there are still some longer-term implications caused by the delay, said McGreevy.

"Farmers are struggling right now. All prices are low, and we're trying to cash flow, and we're making spring planting decisions right now," he said. "So it's really important to get these harvest prices announced and get that money in growers' hands."

Last week, the Agriculture Department said it would extend the deadline for farmers hurt by the trade war to apply for aid. The deadline was originally set for Jan. 15 but will now be delayed for the number of days that the department is closed due to the shutdown.

— CNBC's Jacob Pramuk and AJ Vielma; Reuters and AP contributed to this report.