Tariffs pose yet another challenge to U.S. farmers

U.S. farmers caught in crossfire of trade dispute with China
(Source: Jeff Ferrell/KSLA)
(Source: Jeff Ferrell/KSLA)

SHREVEPORT, LA (KSLA) - The price of soybeans was dropping even before the trade dispute between the U.S. and China.

Now, with China imposing retaliatory tariffs, the situation has gone from bad to worse for U.S. farmers, especially those with soybean crops.

Ryan Kirby said he first thought upon hearing about the impending tariffs on soybeans was: "Oh no, what is that going to do to soybean demand?"

The Belcher farmer's fears soon were borne out.

Soybean prices have dropped by $2 per bushel, cutting into already tight margins for farmers, many of whom are just trying to squeak out a living.

"Even the prices, back in the spring when they were higher, there just wasn't that much money in row crop agriculture."

The price for soybeans now stands at about $8.30 a bushel, almost half of where it was in 2012.

The "price of soybeans has got to be north of $10 before we can make any money as much as it costs to grow it," Kirby explained.

Many say President Trump's $12 billion plan to help farmers in the short term will allow many of them to stay solvent.

The big concerns are what happens in the long-run and whether markets still will be there when this dispute is over.

"Once we lose some of that export demand and it goes elsewhere, it'd be hard to get it back," Kirby noted.

Reports indicate China already is turning to Brazil for more soybeans.

But Kirby said there is a silver lining.

While China imports 100 million metric tons of soybeans a year, Brazil exports only 72 million annually.

That means China cannot quit U.S. soybean imports altogether, Kirby said.

As for the loss of markets, he concluded: "Hopefully, we'll be able to replace that lost market with other markets that Brazil was supplying."

Some agricultural experts fear the trade dispute with China also will speed up the eventual consolidation of more U.S. and further hurt small towns with aging and dwindling farming populations that already are struggling to survive.

Analysts say if you're looking for any long-term predictions when it comes to a trade dispute like this, you need look no further than 1973 with President Richard Nixon and 1980 with President Jimmy Carter.

In both situations, the end-result was the opposite of the intended effect.

That means farmers lost markets, in some cases, for up to a generation.

On a related note, the U.S. Agriculture Department has announced that farmers could begin signing up for federal aid in September.

It also will help producers of corn, wheat, dairy and pork.

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