Missouri farmers saw the value of soybeans drop roughly $20 per acre when futures declined in response to the second round of tariffs in the escalating trade war between the U.S. and China.
On Monday, President Donald Trump’s Administration announced the second round of tariffs increased on goods imported from China. The preliminary list of 1,300 Chinese goods will be subject to 25 percent tariff and take effect in 60 days.
In response, China proposed tariffs on numerous U.S. goods including soybeans, cotton, corn, wheat, sorghum, and beef. American pork and other agricultural products such as fruit were subject to $3 billion in tariffs after Trump subjected Chinese steel and aluminum to tariffs.
“If fully implemented, these actions spell trouble for Missouri agriculture producers,” Missouri Farm Bureau President Blake Hurst said in a statement. “China is by far the leading destination for U.S. soybeans, with the country buying nearly two-thirds of all U.S. soybeans exported, and one-fourth of our total crop. A recent analysis by agricultural economists at Purdue estimated that a tariff regime similar to the one proposed by China would see an overall drop in U.S. soybean exports of 40%, with economic losses to the U.S. economy of over three billion dollars. That figure doesn’t include the economic costs of lost sales of pork, corn, cotton, and beef, all important products for Missouri agriculture.”
The Chinese Commerce Department’s proposal to roughly triple tariffs on U.S. soybean is a substantial threat to Missouri soybean farmers’ bottom line in a time of already tight farm margins, according to the president of the Missouri Soybean Association, C. Brooks Hurst. Soybean futures were down nearly 40 cents per bushel. At a projected 2018 crop of 4.3 billion bushels, U.S. soybean farmers lost $1.72 billion in value Thursday. For Missouri farmers, that works out to a loss of roughly $20 per acre.
“Farm prices are dropping in response to the announced actions at a time when prices are already at break-even or below, and farm income is forecast to be lower than at any time in the last twelve years,” Blake Hurst said.
Crop prices are down 40 percent in the last five years, and farm income is down 50 percent compared to 2013, notes C. Brooks Hurst.
Soybeans are Missouri’s top agricultural export. In the state, the cash crop contributes $7.7 billion in total output, $3.2 billion in added value, $1.4 billion in labor income to the economy, and supports more than 20,700 jobs.
China is one of the biggest trading partners for soybeans. In 2017, China imported $13.9 billion of U.S. soybean. 60 percent of the total U.S. soybean exports are to China.
“It is important to remember that the actions announced by both China and the U.S. don’t take effect immediately,” Blake Hurst said. “There is time for an agreement that can both satisfy U.S. farmers and protect U.S. companies and employees who have suffered because of past Chinese actions.”
The public has until May 11, 2018, to submit comments to the U.S. government on the proposed tariffs and a public hearing is scheduled for May 15.
“The 30-day comment period for President Trump’s corresponding proposal to increase tariffs on imports from China presents an important opportunity for farmers across Missouri to remind the President and his staff, as well as the Legislative Branch, of the importance of soybean and agriculture,” writes C. Brooks Hurst. “Farmers have invested significantly in developing their international markets for soybean, including China, and should not bear the brunt of discord on China’s policies on intellectual property and information technology.”
Blake Hurst calls China a bad actor in international trade and states that they have a total disregard of U.S. intellectual property rights and their habitual disrespect for the accepted norms of international trade must be addressed.
“The Trump administration has entered into a high-risk policy, one that can bring great benefits to our citizens, but one that is fraught with danger for farmers and the U.S. economy. The costs of failure will cripple agriculture for a generation,” said Blake Hurst. “There is one thing for certain: Round after round of increasing import taxes between our two countries will make everyone poorer. There is no winner in a trade war without a negotiated peace.”
Alisha Shurr was a reporter for The Missouri Times and The Missouri Times Magazine. She joined The Missouri Times in January 2018 after working as a copy editor for her hometown newspaper in Southern Oregon. Alisha is a graduate of Kansas State University.
