Due to the ongoing trade war between China and the United States, the price of soybeans has fallen so low that U.S. producers are unable to sell, according to The Star Tribune, leaving countless American farmers to store their soybeans rather than sell at a loss.
> Minnesota farmers exported $2.1 billion in soybeans in 2016, making them the state’s top export crop. But now many farmers cannot afford to sell because tariffs have driven the purchase price for soybeans so far below the break-even point of $9 a bushel.
> “The current price is $7.20,” said [Minnesota farmer Lance] Peterson. “That is tremendous red ink. People are not selling at that price. They are either storing on their farms or storing in grain elevators.”
The problem? China’s retaliatory tariffs against President Donald Trump.
> The retaliatory tariffs China placed on U.S. soybeans after President Donald Trump slapped protective tariffs on billions of dollars worth Chinese imports to the U.S. have started to take a serious toll, economists and banking experts say.
> If the U.S. cannot regain the Chinese market in short order, said Kent Thiesse, a vice president and farm loan specialist at MinnStar Bank in Lake Crystal, some farmers in Minnesota could be forced to sell off land, refinance loans, and in “worst case scenarios, not be able to continue farming.”
> Thiesse said the potential farm crisis could rival troubles the agricultural sector faced during the grain embargo to Russia in the 1980s.
September soybean exports to China dropped from 2.5 million tons in 2017 to just 67,000 tons during the same month this year.
> This tariff-driven collapse has left soybean sales to China for the 2018-19 growing season 85 percent below last year, the USDA said. Minnesota does not keep those specific numbers for state soybean sales, but Minnesota’s soybean exports closely mirror the national trend, said Su Ye, a state agriculture department specialist in Chinese trade.
Trump has attempted to soften the blow with a $12 billion aid package to farmers, but experts say this is not enough to undercut the potential damage if the trade way continues into the months ahead.
> Peterson, a 53-year-old corn and soybean producer, planted his first seed in 1986, while he was still in college. He spent eight years on the National Soybean Association board. He is not optimistic about a quick end to the trade war.
> “A lot of farmers think this is still going to get sorted out quickly,” Peterson said. “I’m not one of them. [In the soybean industry,] this idea of short-term pain for long-term gain is nonsense.”