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China trade deal poised to bring big profits to Texas farmers

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Posted at 10:11 PM, Jan 15, 2020
and last updated 2020-01-15 23:44:44-05

MCGREGOR, TX — A trade deal signed by President Donald Trump Wednesday with China doesn't exactly end the trade war, but it's an important starting point to thawing relations.

The good news? Central Texas has a strong presence in the areas covered by this agreement, particularly in agriculture.

Farmer Rodney Schmalriede needs his truck running because he's got a lot to get to market.

"For every crop, wheat, oats, maize, corn, even soybeans, was the best production year since I've farmed," he explained.

Now that the U.S. has signed the first of two new trade deals with China, he stands to make more money than ever before.

He says the trade war hit him and other farmers hard.

"I knew it was gonna sting. There was no doubt it was gonna hurt," Schmalriede recalled.

On Wednesday he received relief as President Trump and Chinese leaders signed a deal that includes $200 billion on spending for American products over two years.

"Together we are righting the wrongs of the past and delivering a future of economic justice and security for American workers farmers and families," said President Trump.

And this McGregor farmer likes that the deal calls for China to spend billions on American agriculture.

Schmalreide has about 300 acres of oats planted at his McGregor farm. He hopes the Chinese spend $40 to 50 billion, as the agreement calls for, so he and Texas farmers can capture a good bit of that profit.

Congressman Bill Flores says tough competition from Texas will bring much of that money here.

"Particularly for our Texas farmers, because they struggle not only with weather but with pricing issues, and the tariff's hurt them for awhile, so this is a great victory for them," he said.

A victory, for which Rodney Schalreide and other farmers have waited patiently.

"With the news of them signing this first part of the deal, maybe some of the sting is gonna start goin' away," he said.

The new deal calls for China to spend $40 to 50 billion on agriculture, $75 billion on manufacturing, $50 billion on energy and $40 billion on financial services. Texas has a strong presence in all those areas.

Some estimates put the impact on the GDP, America's total output of goods and services, at 75 basis points. That's almost a one percent bump.