A potential trade war with China could negatively impact agtech companies in Iowa if it results in farmers who aren’t profitable.
But it could lead to more innovation.
The United States and China announced tariffs last week on over $100 billion worth of U.S goods that included steel, aluminum, pork, soybeans and beef. Clay & Milk wanted to ask the question, how could that impact Iowa’s technology companies?
Kevin Kimle, director of the Agricultural Entrepreneurship Initiative at Iowa State University, told Clay & Milk the people in the agtech industry worry about the general prosperity of agriculture and that they’ve got plenty to deal with already due to low commodity prices.
“If agriculture gets hit hard it could make it difficult for those creating a technology that you want farmers to buy,” Kimle says. “If farmers aren’t profitable they are going to be much more reluctant to make spending decisions.”
Importing the exports
On Tuesday, Iowa Governor Kim Reynolds said a total of $13.2 billion in Iowa goods were exported in 2017. According to The Des Moines Register, Reynolds said one in three hogs and rows of corn and soybean, are exported.
Kimle said if the proposed tariffs come to fruition and Iowa is impacted, more companies could look at new uses for their product or “hedging” and used the example of fish farming or Nebullam and their high-pressure aeroponics.
Steven Brockshus, the founder of FarmlandFinder.com, said he doesn’t see his company being impacted because they deal mostly with land acquisitions but said there is concern overall.
“There are concerns but we also understand in the ag industry what it means to have fair deals and have things equitable both ways,” Brockshus said. “We need good trade agreements otherwise American agriculture can’t operate as it has been.”
Kimle said another deal to keep an eye on from an ag perspective is the North American Free Trade Agreement with Canada and Mexico.
“Without even thinking about China, let’s get that house in order,” Kimle says. “Then hopefully a deal comes together with China and that ambassador does good work.”
The United States Ambassador to China is the former Governor of Iowa Terry Branstad.
“Let’s hope this is all about getting a better deal,” Kimle says.