[00:00:00] 'em to just say, Hey, the podcast, podcast where we talk about the things that matter to small farms. You know, man, it's been a busy couple weeks. Spring's been, man, it's been coming in with a vengeance. We had nine inches of rain the other day. Well, I'll take it was over three, like a three day period. We got nine inches.

[00:00:15] Man, the bugs have been out. We've been trying to, we've had some weevils, we've had some, looked like a army worm larvae. I'm not sure somebody called him a cut worm. Uh, but we've been trying to get field sprayed and get everything done like that. Just, you know, part of it. But man, a couple weeks ago, my dog, my good working dog, she's here with me every week.

[00:00:34] Um, man, she goes with me everywhere. She was climbing up on a tractor to get with me and I. Got her foot hawk hooked, fell over backwards, broke her leg at the joint and had to have her leg amputated the other day. It was pretty rough. Been helping her get around. She's doing good, actually came back in the field for the first time and worked cattle a little bit.

[00:00:54] Uh, you know, but I spent a lot, a lot of news going on, man. A lot of it, the whole, uh, tariffs and the fear mongering. The stock market has been going crazy, so. Let's get into it. Welcome to just say, Hey, the podcast where we talk about what matters to small farms, whether it's business marketing, agronomy, equipment, livestock.

[00:01:16] If it matters to small farms, we'll probably talk about it here. So let's get into it. Lots of news going on and the stock market, there's a lot of, uh, things going on with tariffs. Uh, tariffs are, are kind of, kind of an interesting thing I think. I think the tariff thing, if you follow what's going on, the tariffs are not as scary as everybody makes them out to be.

[00:01:40] I don't think so anyway, with one exception, maybe two exceptions. You know, you hear the word tariff a lot, and I don't know, I'll explain it really, really quickly. For some of you who don't know what it is, a tariff is tax on an incoming good. So for example, China exports something to the us There's a tariff attacks that gets put on that.

[00:02:01] That product as it's coming into the United States. And that's a wholesale, it's tax on the wholesale. So when we export something and send it to China, China charges a tariff on our goods coming into their country. Right now, the tariffs are at, I think China is charging 125%, and we are up to 145% on Chinese goods.

[00:02:25] I heard somewhere that the, um, they've actually, there's a. Technology, uh, waiver. So tech goods, computers, phones, things like that are gonna be a waiver. So that's, that's good if you buy computers and phones and stuff like that, but if you buy cheap stuff from Temu, probably gonna get more expensive. You know, the, the impact of the tariffs are hotly contested right now.

[00:02:56] If you are a retailer. Or if you are, if you buy things at retail, you know, let's talk about it this way. So if you go to the store and buy a bag of PA plastic plates that were manufactured in China, those plates were charged 145 or will be charged 145% tariff as they're coming into the United States. As those, as that comes in.

[00:03:25] So let's say those, that bag of plates cost the wholesaler a dollar that's now costing $2 and 45 cents. 'cause there's 145% tariff. So where it gets a little funny is typical wholesaler doubles the price to distributor slash retailer. Who then adds their markup. So if they mark up just their original cost and pass the, and just pass the tariffs on through.

[00:03:56] Some people say that tariffs should only impact maybe 20%, 30%, but it could be a lot more. I think there is a bigger thing that we need to be asking ourselves. And this is a big question. Um, I know where I fall on this spectrum. I am, I am pro free trade. I, I am. I wanna compete and I believe that if we allow America to compete, we will win most of the time.

[00:04:35] I think where we lose is when it comes down to a sheer price war. And I, I, I'll say it this way, you can buy cheap stuff that is really expensive and lemme see if I can explain it better. If you go and buy a set of cheap wrenches and they last you through one job, well then you gotta buy another set. As opposed to buying a set of good wrenches that last you for a lifetime.

[00:05:15] Now, which one was, which one was, uh, the cheapest? I think when we think in terms of value, it's a better calculation. So for example, my wife and I years ago bought a set of, bought a washer dryer made in the us. Because it could be repaired, we can get parts. They don't discontinue parts. They are, they've been around for generations.

[00:05:44] I think the, the, the company they're called Speed Queen for, and it was more expensive to buy those, but over the lifetime probably going, going to be cheaper, you know, and, and that idea of looking for value over sheer price. Is, it's the way I think, but I don't think a lot, I don't think most people think that way.

[00:06:10] I'd rather buy something once, maybe pay a little bit more for it, never have to purchase it again, or very rarely have to purchase it again. I think when you buy Shearly on price, I think that you get cost cutting measures all the way down the line from the. Product through BA going backwards towards the wholesaler, towards manufacturing, towards tooling, towards everything that goes into making that, because they're trying to compete on price.

[00:06:43] Quality suffers all the way through when we compete on value, it's different now, I believe personally, from what I've read and have been reading for many, many years. We've been in an economic war with China going back into the, oh, into the nineties at least, as you know, going back to the nineties, maybe even further, when China joined the WTO, the World Trade Organization, it was a big boon for farmers.

[00:07:19] China needed food. Well, when they're in the World Trade Organization, which is supposed to be an organization that. Levels the playing field and allows countries and businesses within countries to trade with one another. With pretty much a level playing field. There are always financial games, uh, monetary, uh, punishments, monetary things that happen that, that have imbalance in trade, but supposed to be something so we can trade freely around the world.

[00:07:48] Well, China has on multiple occasions. Many, many occasions from what I've read, um, 'cause I'm not involved in the WTO, I don't see the things going on every day. I just know what I read in the, the journals and the things China has consistently. Not honored their promises. Well, what happens when your neighbor, when, when you and your neighbor have an agreement and your neighbor doesn't honor that honor the promise?

[00:08:15] Well, a promise is a contract. It's a, Hey, you're gonna do this. I'm gonna do this. We both have to meet our word when one doesn't. It's called a breach of contract, and China has been consistently in breach of contract. See if I can, you know, a good way to explain intellectual property. If you don't know what that is, it's, you know, you're, it's an idea.

[00:08:37] Well, in our world, in our environment, the United States ideas are one of the highest value commodities we have. And having worked in the entertainment industry, I've dealt with a lot of inte, inte intellectual property things, but. When you think about an intellectual property as a product, it becomes a little bit more esoteric.

[00:09:02] However, if we think about it a little differently and you take, so let's say you have an idea, and an idea is for just make something up, a handheld tool that will unwrap a bale of hay and dispose of the net wrap for you in freezing cold weather and do it in under 30 seconds. Man, if you came up with a product like that.

[00:09:26] Every farmer on the planet who feeds cattle and feeds round bas is buying that thing. I know I'd buy four of them, but

[00:09:36] when you go through that process, you have this idea. You go through the process of learning how to take that idea and make it something real. It takes tools and it takes manufacturing, and then you've gotta figure out how to build it better. And then when you get it to be as good as you can, then you start figuring out how you can sell it and market it.

[00:09:56] What China does is they look for good ideas and then they copy them. In Confucian philosophy, mimicry is one of the greatest forms of flattery. However, in our world it's called patent infringement, and we hold these ideas to have value. You can't just steal them, and China does. In our world, that's illegal.

[00:10:28] China does not honor intellectual property law. So if you have an idea, they see it, they copy it. Then through loopholes, they sell it back into the United States. Cheaper than you can manufacture it, because they didn't have to come up with the idea, figure out how to tool it, figure out how to develop it, figure out all of the things that it took to make this thing work.

[00:10:52] They just look at it and copy it and start selling it. You as a company then, or an American company, has no access to Chinese courts. There have been a few, a very few. Companies who have litigated in China and won, but then collecting the the punitive damages is almost impossible, and it's a huge financial burden.

[00:11:21] Most companies, the vast majority cannot afford to go through the process even. They just have to take the loss, have to take the loss and say, you know, Hey, they copied my product that, that, that really sucks. It shouldn't be that way. That's one of the things that I think China should step up to the plate and honor intellectual property, and you can tell they care about it.

[00:11:44] They just don't honor it because they are the largest filer of patents in the world over the past couple of years. Well, a patent is a claim on an intellectual property. Well, if they're going to want us to enforce their patents. They need to step up and start enforcing ours. For example, apple spent who knows how many billions of dollars inventing the iPhone, perfecting the touchscreen, perfecting all of these things, making the operating system so it works, it stolen In China, they're forced to turn over 51% of their intellectual property to China, which by the by is state owned.

[00:12:30] When. A company owns something in China, it is beholden to the state and not just for taxes. The state can come take whatever they want, for example, if they want to use that information for their military. I know it's, we hear all of the talk about the AI race,

[00:12:53] and I've read a lot about it. I use ai. I'm I, I've been learning, I. How important AI is and how important it will be to the future and the success of our country, and when we are allowing China to completely disrespect our rule of law. For example, the stock market Chinese companies list themselves on the stock market.

[00:13:21] They go through the process, and because of American greed. Get allowed to. They get allowed on the list. Americans invest in these companies. The difference is they are not held to the same regulatory standards. They will not share their financials in their books. So nobody knows how much of this company is profitable versus how much of it is state subsidized.

[00:13:49] This is a big deal. This is a big, big deal. Uh, there are a lot of people, myself included, who think that Chinese companies should be delisted from the United States stock markets until they're willing to play by the same rules. I want to compete. I think most American companies want to compete. We have the initiative, we have the, in the innovative mindset to compete.

[00:14:17] However, when we're competing against a, an organization, a country that doesn't uphold the same standards we do, we can't compete in the things that are important, patents, intellectual property. These are big, big deals. Now. How does an idea impact the farmers? 'cause it really in this trade war, and, and you can call it, you know, they, they won't call it a trade war.

[00:14:47] They're just calling it tariffs. But when you have 145% tariff on a good, coming from a country for all, all intent and purposes, it's an embargo. That product is not coming into the country. Nobody's gonna buy it at that kind of a, a price. So how does this impact farmers? And this is a big, big deal because I think farmers more than as much as, or more than any other industry, is gonna take it in the teeth for this.

[00:15:19] And I, for one, I'm will. I'm up for the fight. I think in the long run we will be better off as a country. That's not to say it's gonna be without pain. And I don't sell into the commodity markets, which are going to be the biggest losers in this. When the tariffs are at 145% on goods coming from a, going, going, coming from America, going to China, they're not buying our soybeans.

[00:15:50] They're not gonna buy our corn, they're not gonna buy our wheat, cotton, poultry, pork. Not gonna do it price. It's gonna be priced, prohibitive. So they are going to buy from their partners in Brazil. Well, that's gonna raise the commodity prices here in the United or lower the commodity prices here in the United States because there's gonna be a surplus.

[00:16:16] China is 20% of our agriculture goes to China. Now remember when I said when China joined the WTO was a big boon for farmers. You look at green prices from back in that day, they were pretty nice for the time. They were good. Now take a look at beans and you're on a, you know, you're 10. I've seen days down in the nines

[00:16:42] there's some light. I think there are countries coming to the table right now that I've seen on the list that have. A need, if not does, if not a complete desire, or I should say a desire, if not a complete need. But, uh, for some of our products, I think India could be a big one. I think the EU could be a big one.

[00:17:06] I think there's some hurdles going into the EU that we have to figure out that we're not ready for Australia countries in South America, Africa. I think there are a lot of opportunities. However, they don't happen overnight. They don't happen overnight, but I think in the long run, if we are able to get these countries like China to play by the same rules that we play under, then we can compete.

[00:17:45] It's called free the free market. We can compete on a level playing field. China is horrible abuser of the environment. I think we all know that the, the reports are fairly stacked against them in that, I mean, when you see any report coming out there, you hear numbers like 20, 20 plus percent of all of their arable farmland is contaminated because of lack of industrial controls.

[00:18:11] I think we as a, as a country can compete, but farmers, we're gonna take it in the teeth for a while. It is going to be a, it's gonna be a rocky road. And I think while I am not one for subsidies, I don't like the government giving money because the subsidy is nothing more than tax on everybody else. We need food production.

[00:18:34] In this country for many, many reasons. First, we like to eat second. It's part of national security. We have to have food production in this country, and we have to protect to that industry to some extent. Now we're gonna have to learn some different things, especially if our customers change. That means our products might have to change, for example, they might not want, our customer may not want GMO corn.

[00:18:59] Well then we've gotta figure that out. Um, you know, I, I, I just think there are a lot of unknowns right now, and I wish I could say, well, this is what we need to be doing. This is what we need to be looking at. But I don't, I mean, nobody knows. Nobody has a crystal ball as to what's going on. And as we start to go down the road, a couple of weeks, things will become a little more clear.

[00:19:24] We'll sort of get a handle on what we're in for. Hopefully when I've, uh, heard our, our Secretary of Agriculture, Brooke Rollins, I think her name is, she has talked about working very hard to make deals with other countries to allow our products into their country and to remove trade barriers. I think that's promising.

[00:19:47] I don't know if there's enough that we could, uh, make up the difference of 20%. That's an awful lot of corn and soybeans, so. I think there are, like I said, there's some bright spots, but we need to be looking at how can we do without China? I mean farmers, again, I said, we're gonna take it in the teeth.

[00:20:08] Think about this. Well, if they're not buying our corn, not buying our soybeans, which is our largest export to China, soybean prices are gonna drop. That's gonna hurt. Then when we need to buy parts for our equipment and we need to buy, uh, the goods that we use, many of which, because of a lack of manufacturing here in the United States, are made in China.

[00:20:34] So our, our, our input costs, fuel potash, you know, you name it, is gonna go up. So we need to come up with solutions to either drop our input cost by, you know, the amount that we're losing or. Find another outlet for our goods. So I think we are just in this really odd time right now. I've never seen one like it in my lifetime, where we are just in a wait and see.

[00:21:02] We need to be watching the news. We need to be talking to our elected officials. If we know any, what can you do? What's going on? What is. What is our government doing to try to protect this industry? One of the, one of the most vital industries in our nation, it's agriculture. And I don't, I think the, the big companies, the, the John Deeres of the world, the, the ADMs, they're gonna be fine.

[00:21:30] They have huge cash reserves. They have, they can make it. I'm worried about. The small guy. I'm worried about the, you know, the small row cropper who is gonna get gobbled up if they're, if they are, if they aren't very, uh, don't have very good books right now, man, big farms are gonna buy 'em up. And we're gonna see an even larger consolidation than we saw in the past five years.

[00:21:57] And I don't wanna see that. I don't wanna have people that are farm labor. I wanna have farmers, people who care I. And if you don't own it or have a take ownership in it, why do you care? So I think, I think we're all better off

[00:22:20] if we kind of sit through this thing with China and figure out how to survive. And we all need to be looking out for one another. When you go to buy something, if you don't need it, if it comes from China and you don't need it, don't buy it. Companies like Temu and Shine, S-H-I-N-I, you know, don't buy from 'em.

[00:22:42] They're doing nothing but subverting our financial infrastructure. They're, they're, they're selling cheap, cheap stuff and they're selling stuff that very well could be theft of intellectual property from Americans. I mean, I wish there was a better way to say it. I've seen this IP theft in other industries and.

[00:23:04] See it all the time, and because it is, you can't do anything about it. It's hard. I mean, I've seen interviews where there are people who want 400% tariffs on China, want them completely delisted from the stock market. I think we all need to play from 11 level playing field. I have nothing but respect for the Chinese people.

[00:23:26] I have met several, I have friends who are Chinese, good, good people. The government. Don't have much of a place for 'em. I just don't like their, their, their mindset don't like where they are, don't like much about them. So, you know, as farmers, we're getting kicked in the teeth with this, the, these tariffs and the trade war.

[00:23:51] So I hope, I, I hope something comes of it quickly and I hope the thing that comes of it is China starts to play on a level playing field, starts to become a member of the global community. 'cause we're, we're not in a day where we can be isolationists anymore. We can't, we rely too much on the rest of the world for the things we want and we do.

[00:24:12] And the rest of the world relies on us. And so we're neighbors. We live in a community. But when you have that one person in the community who. Is taking advantage of the system and not paying their fair share and not doing their fair share to help the rest of the community. And sometimes that means we charge a, a lower price or sometimes that means we, we do things extra part of being, part of being a neighbor, part of being in the community.

[00:24:38] But if you're not gonna do that, you need to leave the community. Go, be, go, go, start your own community. And that's not, I don't say that, uh, against the Chinese people. That is not. But I think the, the communist government in China does not value the same things we do With that, have a great day. Have a, a wonderful week.

[00:25:02] A lot going on here on the farm. I'll see you in a couple of weeks. Good luck and god bless and.