As the tariff war wages on, American soybean farmers continue to feel the consequences of the prolonged tariffs on the product that sustains their livelihood.
According to a press release by the ASA earlier this week, Board Member Ronnie Russell – a soybean farmer from Missouri – traveled to Washington D.C. to testify before the House Financial Services Committee Subcommittee on National Security to discuss the impact of trade and tariffs on soybean producers and the larger agricultural economy. Russell noted that “Older farmers are considering retiring early to protect the equity they’ve built up in their farms, while younger producers are looking at finding other employment. We may also see the shuttering of more businesses in rural communities whose livelihoods depend on the health of the farm economy.” The destruction of multigenerational soybean farming would negatively impact the U.S. economy for years to come if a swift resolution is not met. The aide that the current Administration has provided to farmers is not a sustainable solution in the long-term.
As soybean growers seek stability and predictability, they are not likely to see any positive changes until the Administration concludes their negotiations with China and lifts the soybean tariff. As U.S. wheat, corn and soybean futures continue to fall, many farmers are weighing their options and questioning if it is best to continue planting or to step back and take crop insurance.
Looking back to 2017, China purchased more than $14 billion worth of U.S. soybeans. Following the 25% retaliatory tariff that has since been put on the product, that number has declined dramatically. This has also caused major damage to the price of soybeans by bushell, which has recently fallen by over $2. Despite U.S. soybean farmers efforts to diversify in order to maintain profitability, the loss of China’s market cannot be replaced.
In case you are wondering what China has been doing to fulfill their soybean needs now that they aren’t purchasing from the United States, they have begun importing soybeans from South America, most notably from Brazil. Brazilian soybean farmers are profiting tremendously from the trade war and they are now the largest supplier of soybeans for China.