Daily Court Reporter - News Soybean growers worried about tariffs
Soybean growers worried about tariffs
BRANDON KLEIN, Daily Reporter Staff Writer
Ohio's soybean growers fear efforts to maintain and grow their market share in China will be undermined as trade issues arise between the country and the United States.
China raised import duties on a $3 billion list of U.S. products such as a pork and fruit in retaliation for President Donald Trump's tariffs, which took affect last month, against Chinese steel and aluminum, according to The Associated Press.
Although soybean products are not included in China's list, the American Soybean Association says believes it will be targeted because China is the largest purchaser of U.S. soybeans and consumes nearly a third of U.S. production worth about $14 billion annually. More than half of U.S. soybeans are exported worldwide, with China leading the global demand.
"American agriculture has tremendous potential to improve our trade balance," ASA President John Heisdorffer said in a statement. "Soybeans can lead this growth in China, which is projected to significantly increase soybean imports over the next 10 years. We should be talking about actions that grow this important market, not risk losing it.
"Agriculture is not like other industries that can sustain extreme volatility in markets and prices. If demand drops and prices collapse, soybean farmers will go out of business. Not in five or 10 years, but this year and next. Trade is an existential issue for soybean farmers."
If China imposes tariffs on U.S. soybeans, the effect will be more acute for Ohio soybean growers as they export more than 60 percent of their beans because regional infrastructure gives them greater access, said Allen Armstrong, president of the Ohio Soybean Association and a farmer in Clark County.
Exports are so important to Ohio soybean farmers that they had to decrease prices after infrastructure near the Ohio River failed causing a backup that lasted about 72 hours in October, Armstrong said.
His first reaction to tariffs: "Oh gosh, what does this mean for us," Armstrong said. "I don't have a crystal ball to say what it will be."
In addition, a potential Chinese tariff against U.S. soybeans comes at a time when the crop's farmers are struggling financially as net incomes have decreased by nearly half since 2013.
That's because farmers have had record-breaking seasons for their crops, causing an oversupply. It leaves two options for farmers: Sell more soybeans or grow less, the latter of which is not in their vocabulary, Armstrong said.
"We want to be in a position to sell better to them," he said.
Armstrong said while there is strong demand for soybeans in China, the country has "shrewd buyers" who want the best price for the best quality.
"It's interesting to me how they approach our country differently," he said. "They're very good negotiators."
U.S. soybean farmers have made tremendous progress in the market over the last seven years, while promoting its product around the world, Armstrong added.
While the tariff dispute continues to escalate, U.S. soybean farmers have lobbied to officials in Washington to make their concerns known.
"We don't want to be a casualty of it," Armstrong said.
Date Published: April 23, 2018