Colorado's agricultural sector braces for the impending effects of tariffs on farm operations and consumer prices. Steve Ela of Ela Family Farms highlights the immediate impact of tariffs on essential farm inputs, noting, "If tractor parts and fuel and various other crop inputs are affected, that raises our cost of production." These increased production costs are expected to translate into higher consumer prices.
Farmers exporting goods face potential loss of foreign markets as retaliatory tariffs are imposed on U.S. products. Recently, China levied a 34% tariff on all U.S. goods, affecting exports like soybeans, beef, and apples. This tariff was later increased to 84%, prompting a response from President Donald Trump with a 125% tariff on Chinese goods.
Ela expresses concern over market volatility, stating, "Anytime you have massive market disruptions and you create unsettlement, that makes us all nervous." The uncertainty complicates planning amid existing challenges from nature, labor, and fluctuating costs.
In response to escalating concerns, a 90-day delay was implemented on some reciprocal tariffs, while a 10% universal tariff remains, alongside specific tariffs on China, Canada, and Mexico. Dawn Thilmany from Colorado State University reflects on past disruptions, comparing the current situation to the COVID-19 pandemic on food supply chains.
Thilmany emphasizes the potential for tariffs to affect grocery availability and affordability, particularly for items like coffee, chocolate, avocados, and pineapples. The rapid tariff changes leave producers with limited time to adjust marketing strategies. "Producers don't have time to reconsider what markets they're going to sell to if (they can't) export," Thilmany notes.
Reagan Choi from Ela Family Farms recalls past market challenges where global issues led to domestic market saturation and price drops for apples. As the U.S. enters the growing season, local farmers' markets may offer some reprieve, reminiscent of the 2020 shift during supply chain disruptions.
Thilmany suggests that tariffs could diversify domestic crops, potentially increasing local organic production. Ela echoes this sentiment, advocating for reduced reliance on imports. However, challenges persist, particularly for perishable fruits and vegetables.
Source: CPR News