Iowa, U.S. soybean farmers disproportionately impacted by escalating trade war with China07/06/2018 | Soybean Exports, Soybean News, Economics
Statement is courtesy of 22 farmers who serve as directors of the Iowa Soybean Association.
“The U.S. soybean industry’s worst fears are coming to pass today with the implementation of tariffs on Chinese imports. This aggressive action positions Iowa and America’s soybean farmers directly in the crosshairs of a full-scale, multi-national trade war if China, as it has promised, imposes tariffs on U.S. soybean imports.
“Short- and long-term consequences are significant. U.S. soybean prices are already far below the cost of production will continue to erode, placing additional pressure on farm families who have already experienced a nearly $2-per-bushel decline since March.
“Long-term, a full-blown trade war risks entrenching anti-American sentiment in a country that consumes nearly 60 percent of global soybean trade and about one of every three rows of U.S. soybean production. It will incentivize additional trading partners, including Canada, Mexico and the European Union, to do business absent the United States. It’s clear that our competitors are working diligently to grow their capabilities and overcome any shortcomings, both logistically and economically. This is of great concern to the nearly 42,000 Iowa soybean farmers who derive their livelihood from an industry built on the ability to do business internationally.
“There are winners and losers in every trade war. The soybean industry is a loser if we become a residual, rather than primary, supplier of soybeans to China. Iowa is disproportionately impacted because of the tremendous volume of soybeans produced here and the need to move our product to international customers.
“Iowa farmers are resilient, resourceful and accustomed to dealing with situations out of their control. We recognize and fully appreciate the legitimate issues involving U.S. and Chinese trade relations. As we prepare to harvest another substantial soybean crop this fall, we urge U.S. and China officials to engage in full and transparent dialogue to resolve these issues quickly. Time is of the essence.”
Signed by: Bill Shipley, President (Nodaway); Lindsay Greiner, President-elect (Keota); Dave Walton, Wilton, Mark Vosika, Pocahontas; Chuck White, Spencer; April Hemmes, Hampton; Tim Bardole, Rippey; Steph Essick, Dickens; Casey Schlichting, Clear Lake; Rick Juchems, Plainfield; Suzanne Shirbroun, Farmersburg; LaVerne Arndt, Sac City; Jeff Frank, Auburn; Morey Hill, Madrid; Rolland Schnell, Newton; Robb Ewoldt, Blue Grass; Jeff Jorgenson, Sidney; Warren Bachman, Osceola; Randy Miller, Lacona; Pat Swanson, Ottumwa; Tom Adam, Harper and Brent Renner, Klemme.
- U.S. soybean prices are already $1.65 below the average global soybean price.
- According to a Purdue University study, a 25 percent tariff imposed by China on U.S. soybean imports would result in a 65 percent decline in soybean exports to the country. Total U.S. soy exports would drop by 37 percent while U.S. soybean production would decline by 15 percent.
- Chad Hart, associate professor of economics and crop markets specialist, Iowa State University Extension, estimates Iowa soybean farmers stand to lose up to $624 million because of higher tariffs implemented by China.
- Iowa soybean farmers produced $5.2 billion worth of soybeans in 2017 on production of nearly 563 million bushels.
- Soybeans are America’s leading agricultural export, with sales of $27 billion last year.
- China is the top market for U.S. soybeans, accounting for $12-14 billion in sales in 2017.
- 51 percent of the U.S. soybean crop is exported annually.
- As of July 5, 2018, soybean futures prices were trading the lowest they had since September 2008.
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