U.S. soy and wheat growers say they may stand to lose the most in President Trump’s tariff feud with China. On Monday, Trump announced that $200 billion in additional Chinese goods will be hit with a 10 percent tariff, deepening the likely free fall in prices that producers of soy and soy products are feeling directly in their wallets and threatening the level playing field for wheat.
“Soybean prices are declining as a direct result of this trade feud,” said John Heisdorffer, Iowa soybean grower and president of American Soybean Association (ASA). “Prices are down almost a dollar and a half per bushel since the end of May – and continue to plummet. That represents a loss of more than $6.0 billion on the 2018 soybean crop in less than a month. We have approached the Trump Administration repeatedly and implored them to hear our side of this story.”
ASA is disappointed and highly concerned that trade tensions continue to ratchet up rather than deescalate between the two countries and that its repeated requests to the Administration for a non-tariff solution that does not threaten the market stability and livelihoods of soy growers has not been put forward.
In 2017, China imported 60 percent of total U.S. soybean exports, representing nearly 1 in 3 rows of harvested soybeans, with a value of $14 billion.
The National Association of Wheat Growers and the U.S. Wheat Associates said no one in China will be hurt if the retaliatory U.S. wheat tariff is implemented. In a joint statement the organizations said:
“China has huge amounts of stored wheat and they can purchase what they need from Australia, Canada or even Kazakhstan, although Chinese consumers will miss the opportunity to experience higher quality products made from U.S. wheat. Instead, the outcome is likely to further erode the incomes of farm families who strongly support addressing the real concerns about China’s trade policies.
“According to the USDA, net cash wheat farm income is projected to be down more than 21 percent this year compared to last. U.S. wheat growers are not in the business of ceding a market like China that wants to buy their crop and could buy so much more of it. That is why in 2016, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) called for World Trade Organization (WTO) cases intended to push China to meet its WTO commitments on domestic support and tariff rate quota management. We are happy that the Trump Administration supports and is pursuing those cases.
“USW and NAWG know that farmers still want our organizations to keep fighting for fair opportunities to compete in China and other countries. They would prefer, however, to see our government do that first within the processes already in place. Instead, the Administration is doubling down on a tactical policy that makes an already risky business of agriculture even more volatile. Policies like the ones being proposed will only make times harder for farmers, and the Administration’s vague promises of protection for the farmers we represent offers little consolation.”