Area farmers refuse to blame Trump for China canceling soy deliveries
MARSHALL — While some southwest Minnesota farmers are frustrated with the increasing tariff war with China, they are not ready to blame the Trump administration for any agriculture downturn.
The trade dispute with China is now escalating as Chinese buyers started canceling orders for U.S. soybeans. That’s a trend that could threaten the financial stability for area farmers if it continues.
At the same time, farmers in China are being encouraged to plant more soy, apparently to help offset any shortfall from the United States.
“I’m really disgusted with the way things are going,” Roger Dale, Hanley Falls Farmer and Yellow Medicine County Soybean Growers Association director, said Wednesday. “Some people blame President (Donald) Trump, but just look at what the Chinese have done to us.
“It irritates me that so much stuff (our citizens use) is made over there and only our ag products are shipped over there,” Dale said. “The tariffs should benefit everybody in the U.S., even produce more jobs for our people who need them. The cost of living might go up a little, but if we don’t sell our ag products, we could lose a lot of farmers.
Beijing has included soybeans on a list of $50 billion of U.S. exports on which it has said it would impose 25 percent tariffs if the United States follows through on its threats to impose the same level of tariffs on the same value of Chinese goods. The U.S. tariffs could kick in later this month; China would likely retaliate soon after.
It can take a month or more for soybean shipments to travel from the U.S. to China. Any soybeans on their way to China now could be hit by the tariff by the time they arrive.
“The Chinese aren’t willing to buy U.S. soybeans with a 25 percent tax hanging over their head,” said Dan Basse, president of AgResource, an agricultural research and advisory firm. “You just don’t want the risk.”
China typically buys most of its soybeans from South American nations such as Brazil and Argentina during spring and early summer. It shifts to U.S. soybeans in the fall. As a result, for now, the cutbacks from the United States are relatively small.
But should they persist, it could cause real pain to U.S. farmers. Roughly 60 percent of U.S. soybeans are shipped to China.
There might also be a political impact: Three of the top five soybean-exporting states — Iowa, Indiana and Nebraska — voted for Trump in 2016. Illinois, the top soybean exporter, and Minnesota, the third-largest, backed Hillary Clinton.
Yellow Medicine County Farm Bureau President Gene Stengl of Granite Falls said that it’s a tactical game.
“A tit-for-tat that’s going on because President Trump wants to rebalance the old trade agreement,” he said. “China has to step up and figure out if they want our products or not. They invested in Brazilian and Argentine markets and have a good deal going on down there.
“We know we have quality products and the Chinese want them, but don’t want to pay for them,” Stengl said. “Everybody wants a better deal.”
While the tariffs may end up hurting American farmers, the agriculture financial picture has been down for a few years now.
“I think the farmers’ financial issue has been three years in the making,” Stengl said. “This thing has been in the mix longer than we care to talk about. It’s the low prices. It’s all been about money or the lack thereof. Money and liquidity, and trade plays into that.
“I think the tariff situation will get itself ironed out eventually,” Stengl said.
However, he also added that the Chinese have the option to buy U.S. products through other countries, through different trade partners.
High Water Ethanol President Brian Kletscher said that he, too, is hopeful the president can work it out even though his plant doesn’t deal with soybeans.
“But ethanol’s on the list, too,” he said.
“We need to be vigilant on how we approach our trade with China,” Kletscher said. “Our president is doing the right thing, but we need to be cognizant that if we don’t sell to China, someone else will. At which time, We’ll have to develop other markets for our products.”
Our congressmen are getting the message.
“Trade is the biggest issue I hear about from farmers,” U.S. Rep. Collin Peterson, D-Minn., said. “Soybean growers have been warning the administration about the negative impact of retaliatory tariffs for months and have made this planting season even more stressful. It’s unfair to ask soybean farmers to bear the cost of a trade war, especially when they are already struggling with low prices.
“I will continue to urge the Administration to consider the impacts of trade on our rural economy,” Peterson said, “and fight to strengthen the safety net and trade promotion programs in the farm bill.”
Basse said that it has been roughly three weeks since China has made any major soybean purchases, an unusually long delay.
Some Chinese buyers might be showing support for their government in the trade dispute by turning away U.S. soybeans, Basse said. The dispute may also make it seem too risky to buy from the United States over the long run.
“The United States could lose the reliable supplier label that we’ve had these many years,” Basse said