JEFFERSON CITY, Mo. — For every 10-cent drop in soybean prices, the Show-Me State loses more than $36 million in economic activity, a new analysis from Missouri’s Commercial Agriculture Program shows. Prices for the row crop have dropped roughly $2 per bushel.
The 20 percent drop in soybean prices is worsening an already-tough market for farmers and setting Missouri up for an economic hit. A significant portion of the drop can be attributed to the ongoing trade dispute with China.
“We’ve put developing our international markets and export relationships as a high priority for many years,” said C. Brooks Hurst, a northwestern Missouri farmer and president of the Missouri Soybean Association. “Our farmers are counting on having access to those markets and the demand they create for U.S. soy. What we’re seeing now is a direct hit to not only farmers, but to our rural communities and all of Missouri.”
A $2 drop in soybean bushel prices points to more than $212 million in lost earnings for workers and business owners, and 3,000 fewer jobs. A $2 drop in soybean prices also makes for more than $21 million fewer tax dollars collected by the state and local communities, and a $726.6 million reduction in economic activity.
Each 10-cent drop in prices is also equivalent to a decrease of $24.7 million in cash receipts for farmers for the marketing year, meaning that the $2 decrease costs Missouri farmers nearly a half billion dollars.
Typically, more than half of Missouri’s annual soybean crop is exported, with nearly 1 in every 3 rows of soybean destined for China. Missouri soybean farmers have raised an annual average of 247 million bushels over the past three years, according to the USDA.
The economic analysis was completed by the Commercial Agriculture Program within the University of Missouri’s Cooperative Extension Service this month, at the request of the Missouri Soybean Association, and includes direct, indirect and induced economic effects. A copy of the report is available by clicking here.
The majority of the economic loss the report calculated can be attributed to the ongoing trade dispute with China and other countries. President Donald Trump’s administration did release a plan this week to help farmers through the sting of retaliatory tariffs.
On Tuesday, Agriculture Secretary Sonny Perdue unveiled a three-part, $12 billion plan to help U.S. farmers through a mix of payments, purchases, and trade promotion efforts. It is unclear whether the aid will cover many of the price losses that various agriculture sectors are experiencing because of the escalating trade dispute.
In the first part of the aid plan, the government will provide direct payments to growers and producers of soybeans, sorghum, corn, wheat, cotton, pork and dairy.
The second part, a “food purchase and distribution program,” would use authority under USDA’s Agricultural Marketing Service to purchase fruit, nuts, rice, beef, pork and dairy products from U.S. producers for redistribution to federal nutrition assistance programs.
The plan’s third element would put resources toward finding new markets for U.S. farmers to sell their products abroad.
“The $12 billion trade aid package announced yesterday is positive news to farmers facing low prices and loans coming due,” said Blake Hurst, president of the Missouri Farm Bureau. “That being said, it is no substitute for a successful settlement to our ongoing trade disputes with several of our most important agricultural trading partners. Missouri farmers are struggling with low prices and a catastrophic drought and need to see progress in this ongoing tariff war.”
Alisha Shurr was a reporter for the Missouri Times and 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.