On Dave and Becky Struthers’ farmstead near this central Iowa town, an unusually high level of attention is being paid to two subjects that may seem far removed from the daily concerns of Story County: the steel industry and the poultry-eating habits of Russians.
For the last three months, after the slaughter price of their hogs abruptly fell with little explanation, those two issues have come up again and again as the Struthers family and pork producers across the country search for reasons why raising pigs has again become a losing proposition.
“It totally caught us off-guard when things started to sink,” said Dave Struthers, 34, who raises pigs and grows corn on his family’s farm, about 30 miles northeast of Des Moines. “It really gets you worried thinking how bad it could get. And then the bills start to pile up.”
Sagging hog prices, which have caused many farmers to lose up to $30 on each animal sent to market, drew the attention of President Bush last week when he toured the World Pork Expo in Iowa. Leaders of the pork industry say their financial pain is caused, in part, by fallout from the administration’s March decision to impose higher tariffs on imported steel.
The White House, courting voters in the nation’s steel belt, unwittingly agitated another voting bloc: hog and cattle farmers.
“It wasn’t his intent to have something come back and bite us, but that was the effect,” said Dave Roper, an Idaho pig farmer who is the president of the National Pork Producers Council. “We can’t be the pawn. We can’t be the whipping boy for other trade issues.”
`Political decision’ alleged
Added Iowa Agriculture Secretary Patty Judge: “It was a political decision that definitely did affect prices for pork producers and it has adversely affected the market place.”
In April, hog prices hit their lowest level since 1999, when thousands of pork producers nationwide left the business. Agricultural economists this year had predicted the market for pork would be strong through spring and summer, so many farmers drew their financial plans around anticipated hog profits.
But after the steel tariff decision came a Russian poultry ban; the U.S. meat supply soared and prices plummeted.
Russian officials have never acknowledged their poultry ban was directly linked to Bush’s decision to impose tariffs of up to 30 percent on imported steel, which could mean losses of $1.5 billion for the Russian steel industry. However, U.S. economists see Moscow’s bitter and quick response, in which Russian officials suddenly said they didn’t believe American poultry was safe, as a sign of retaliation.
“It’s more than a coincidence. We think the Russians did some retaliatory actions against the steel industry,” said Dave Miller, a commodities expert at the Iowa Farm Bureau Federation. “Pork producers have been caught in the downdraft.”
The United States exported 1.1 million metric tons of poultry, worth $630 million, to Russia last year. The ban on U.S. poultry was officially lifted after a month, but Russian officials have placed new restrictions on chicken meat, so there has been little progress in reducing the glut of poultry that flooded cold-storage space in the U.S.
“Our largest poultry export market just shut off like a spigot,” said John Lawrence, an extension livestock economist at Iowa State University.
American-raised chicken gained popularity in Russia during the first Bush administration, when the president sent food aid to the struggling country in the early 1990s. The dark meat, which accounted for nearly all of the Russian imports, is widely known as “Bush legs.”
The Bush administration announced last week that it would grant Russia the status of a “market economy,” which is a step to full membership in the World Trade Organization. But the president remains unable to promise Russia full trading authority, in part because members of Congress from poultry-producing states have refused to approve that legislation until the poultry issue is resolved.
Caught in the middle of this dispute are pork producers in Iowa, the nation’s largest pork-producing state, and across the country. The Nebraska Corn Board filed a complaint with the Russian Embassy last month, calling for a resumption of normal trading conditions.
“There was an immediate ripple effect on the entire meat chain that ultimately may have a disastrous impact on corn and soybean demand as well,” said Mark Jagels, a farmer in Davenport, Neb., who is a representative on the U.S. Meat Export Federation.
Bush skips topic in Iowa
During a visit to Iowa on Friday, the president talked extensively about the recent farm bill he signed into law, which includes record subsidies for grain producers and other farmers, though pork producers do not directly receive subsidies under the legislation. Bush did not address the issue of pork prices or acknowledge a link between his decision to prop up the U.S. steel industry and the Russian poultry ban.
“It’s time to quit playing politics with trade promotion,” Bush said. “We’re not going to treat agriculture as some second-class citizen when it comes to international trade agreements.”
But the administration’s courtship of steel-producing states could be critical to his re-election. During the 2000 election, political analysts say, running mate Dick Cheney’s support for steel subsidies during a campaign swing through West Virginia was a key factor in winning that state and enough electoral votes for Bush to claim the presidency. It marked only the fourth time since the Depression that a Republican presidential candidate carried the state.
The White House faces a challenging balancing act, though, as it curries favor in politically important states.
“It’s just blatant vote-getting,” Dave Struthers said one morning last week, before tending to his hog chores. “I had no idea that steel would impact us. And never to this extent have I seen poultry affect pork.”
