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UPI
22-07-2025
- Business
- UPI
Tariffs, uncertainty 'paralyzing' for farmers
July 22 (UPI) -- President Donald Trump's tariff negotiations have the agriculture industry facing uncertainty and soybean farmers are among those most affected. The price of soybeans continues to decline while the cost of growing rises. The United States has lost its footing in the global soybean market, due in part to Trump's tariff policies during his first term. Current trade negotiations have some in the industry asking for assurances. "When there's uncertainty in the market it's paralyzing," Caleb Ragland, president of the American Soybean Association and ninth-generation farmer, told UPI. "It tends to make people, when in doubt, do nothing. Don't buy, don't invest." Soybeans are the largest single agriculture commodity exported by the United States. China is the biggest buyer of U.S. soybeans but the share of the crop it purchases has declined significantly since Trump placed tariffs on the country in 2018, according to the University of Illinois' Department of Agricultural and Consumer Economics. Prior to that, about a third of its soybeans were imported from the United States. Tariffs caused China to look elsewhere for soybean imports, dragging down the price of U.S. soybeans. Brazil has been the beneficiary of this change, upping its share of the Chinese soybean market from about 45% to about 70% and raising its prices. The United States accounts for about a 20%-25% share of Chinese soybean imports. One reason that China is crucial to the soybean market is that it raises more pigs than any other country. The soybean is a key source of protein in livestock feed. The largest soybean producing states are Iowa, Illinois, Indiana and Minnesota, according to the United States Department of Agriculture. China has routinely had about a 3% tariff on U.S. soybean imports. The effective tariff is now 23% in response to tariffs imposed by Trump earlier this year. "We lost our number one market for ag exports overnight," Joseph Glauber, senior research fellow at the International Food Policy Research Institute, told UPI. Glauber is the former chief economist for the USDA. He served in the role for 22 of his 30 years with the USDA. Among his responsibilities was operating as the chief ag negotiator. "When I was the chief negotiator, that was in the context of WTO negotiations, which are really textual -- arguing over wording in documents," Glauber said. "What the Trump administration has been talking about are these framework documents with no details. It's a very different thing to think about. These things aren't very longterm, unlike the [North American Free Trade Agreement]. Those are long-running agreements." Tariffs have always been a negotiating tool, Glauber said, but for decades the United States has worked to reduce tariffs. Multilateral and bilateral trade agreements, such as the General Agreement on Tariffs and Trade and the World Trade Organization, created mechanisms for trade partners to resolve disputes and maintain relationships. At times, tariffs would be increased, but within the guardrails of long-standing and long-term agreements. "The Trump administration destroyed that," Glauber said of the World Trade Organization. In 2019, Trump blocked the appointment of members to the World Trade Organization's appellate body, rendering it unable to settle trade disputes. The United States' proactive approach to fostering trade has largely hit a standstill since Trump first entered office in 2017, Glauber said. Former President Joe Biden did not raise tariffs but he also did not eliminate tariffs on China that were implemented by the Trump administration. As U.S. exports like soybeans lose demand, the prices farmers can sell them for also decreases. Soybeans hit record prices during the former President Barack Obama's second term before hitting a lull throughout Trump's first term. Prices rose again under former President Joe Biden, peaking at $16.88 per bushel in June 2022. The price has steadily declined since, falling to around $10 per bushel in July, down about 40%. The Chicago Board of Trade is a key marker that farmers across the United States monitor to evaluate their risks and offer a benchmark for crop prices. Farmers will measure the prices offered above or below those futures prices reported by the Chicago Board of Trade at their local elevators to determine when to sell. If a crop is sold to a grain elevator at a certain price, the seller locks that price in. For example, if a crop is sold in July at the October future price, they will receive that price in October. If prices are higher, they will have missed out on potential profit. If it is lower, they will be protected from that lower price. Ragland farms soybeans, corn and wheat on his family farm in Magnolia, Ky. Farming is the sole source of income for him, his wife Leanne and their three sons. This year's crop marks his 21st grown on his own farm. Soybeans are planted in the spring and harvested in the fall, beginning in the end of August through September. The next two months will be critical for farmers like Ragland, as there will be more clarity about the true economic impact of Trump's trade policies on the ag industry. "It's been speculation up to this point and anticipation by the market but we have not truly been in the middle of actively sending the lion's share of our crop since all this tariff announcement has been made and all the back and forth that has happened with it," Ragland said. "If we don't have some surety in our markets here in the next 30, 45 days, it is going to lead to more significant price drops, we believe. There is very, very weak demand right now from what we hear for exports due to all the uncertainty in the market." The agriculture community is experiencing economic hardships across the board and tariffs are a part of that. Chapter 12 bankruptcy filings, used to reorganize a farm operation in order to repay debts, were up sharply in the first quarter of 2025. In the first quarter of the year there were nearly twice as many Chapter 12 bankruptcy filings than in the first quarter of 2024, the University of Arkansas Division of Agriculture reported last week. Farmers may be the first to feel the sting of a downturn in grain prices but they are not alone. Implement dealers, equipment manufacturers and businesses in rural communities are also affected. "They say $1 made in agriculture usually floats around six to eight times in the local community," Ragland said. "That means small businesses and stores and everything else in rural communities are hurting as well. All of this has a very detrimental effect on rural America." "I would also note a lot of these areas we're talking about are the ones that were very large supporters of President Trump," Ragland continued. "We want to respectfully appeal to the administration that we need surety, we need certainty, we need trade deals to be made now and not potentially in the future because the farm economy is in a very difficult spot." According to Ragland, commodity prices are not meeting the cost of production as they are currently. Inflation has aggravated the financial position of farmers like him as fertilizer prices, insurance premiums and equipment costs have risen. The effects Ragland and other producers are dealing with not only disrupt their current crop. It also makes planning for the future more difficult. "The plans I have for this crop here in 2025, a lot of those plans started taking place a year or two ago," Ragland said. "We rotate crops. Sometimes there's fertilizer applied that would be utilized a year or two in the future by the crops. The wheat that we just harvested in June was planted in October of 2024. The seed I planted to grow that crop had to be planned ahead for in the fall of 2023. It's a long-term process, the decisions we have to make."
E&E News
28-06-2025
- Business
- E&E News
Farm industry lobbyist, MAHA critic to head EPA pesticides office
EPA announced that a farm industry lobbyist will take over as the agency's top pesticides officer, deepening the number of appointees at the agency poached from industry groups. Kyle Kunkler on Monday will start as the deputy assistant administrator for pesticides in the Office of Chemical Safety and Pollution Prevention, the office's principal deputy assistant administrator, Nancy Beck, said in an email to staff obtained by POLITICO's E&E News. Kunkler has spent the past five years directing government affairs for the American Soybean Association, an agriculture trade group advocating against regulations on pesticides targeted by Health Secretary Robert F. Kennedy Jr. and his coalition of 'Make America Healthy Again' supporters. Advertisement Prior to joining the trade group, Kunkler led federal government relations for the Biotech Innovation Organization's food and agriculture team. He also previously served as an aide for Rep. Dan Newhouse and former Rep. Cathy McMorris Rodgers, both Washington Republicans.
The Guardian
21-05-2025
- Business
- The Guardian
Farmers fear Trump trade winds could damage crops: ‘It's unnerving'
Planting season is well under way across the US. And while farmers welcome news that the US and Chinese officials agreed to temporarily reduce tariffs placed on exports, plenty of uncertainty remains. China is one of the top three importers of US food commodities, behind Canada and Mexico, and the escalating trade war between Washington and Beijing has worried farmers - particularly grain farmers, who lost money on last year's harvest as bumper crops weighed on prices. Even as farmers plant this year's corn and soya bean crops, agricultural economists estimate grain farmers could lose money again as total production costs remain above current prices, unless something changes. In a 90-day truce announced on 12 May, the US will cut the additional tariffs it placed on Chinese imports to 30%, down from 145%, while Chinese levies on US imports will drop to 10%. Over the next three months, the two countries will continue negotiations. Soya bean farmers have much to gain – or lose – in Chinese trade talks. Last year 54% of US soya bean exports went to China, according to the American Soybean Association. Soya beans were a casualty of Donald Trump's trade war with China during his first term in 2016. Between 2000 to 2016, the US's share of Chinese soya bean imports averaged around 40%, but by 2018 but it fell sharply as China turned to Brazil for its oilseed needs, said Lane Akre, economist at Farm Journal, a trade publication. Although the US and China eventually formalized trade for a few years, the US's market share of Chinese purchases never rebounded. Last year it was only 22%, Akre said. Caleb Ragland, the soya bean association's president and a soya bean producer in Kentucky, and Brian Duncan, president of Illinois Farm Bureau, who also runs a grain and livestock farm in north-west Illinois, both said they're happy to see a truce, but the 90-day pause is not a long-term solution. 'We understand the importance of fair trade, but we've historically supported a rules-based approach to trade. We're hopeful that the negotiations here can lead to a productive framework,' Duncan said. Duncan said the investments farmers make in their operations, such as machinery, land, livestock and crops, are costs that often are paid for over years, costs that can't be passed on. That makes trade uncertainty so difficult to manage. 'We're price takers, not price makers. So it's unnerving here, as we're planting this crop, wondering what demand is going to be, and realizing that during the last round of trade disputes with China, it pushed them further into the arms of Brazil,' he said. China is also an important export market for US pork, as 55% of pork offal products not readily consumed domestically, such as snouts and feet, go to China, in addition to muscle cuts, according to the National Pork Producers Council. Karl Setzer, partner with Consus Ag Consulting, a grain merchandising consultant, said farmer sentiment surveys, such as those taken monthly by Purdue University, show farmers are optimistic and think tariffs will be beneficial in the long run. He said some of that optimism may reflect the fact that farmers received subsidies from the Trump administration during the last trade war. Setzer wasn't sure the optimism on tariffs is warranted in the long run. Despite the China rows, both Setzer and Akre said the US has other export markets to sell its grain and oilseeds but inking a deal with China matters. What's potentially concerning is that the truce will end in 90 days, just before farmers begin the fall harvest. The truce comes at a lull in crop marketing, as much of last year's harvest has been sold, and farmers haven't forward-booked sales for the new crop that will be harvested in the fall. That makes it hard to tell the impact of the truce, said Setzer. 'We don't know what it means for new crop yet. Demand doesn't really start to increase until we get to June or July,' he said.
South China Morning Post
14-05-2025
- Business
- South China Morning Post
Lower tariffs remain too costly for soybeans and other US sectors, Congress hears
The costs of broad-based tariffs on Chinese imports remain too high even if the tariff reduction deal between Washington and Beijing lasts beyond 90 days, the head of a soybean industry group told US senators on Wednesday. After weekend talks in Switzerland, the two nations agreed to reduce tariffs temporarily until they reach a more substantive deal, with US tariffs on Chinese imports lowered to 30 per cent, from 145 per cent, and Chinese tariffs on US imports cut to 10 per cent, from 125 per cent. 'While this reduction is a step in the right direction, US soybeans are still facing a duty into our largest export market nearly equal to the height of the 2018 trade war,' Caleb Ragland, president of the American Soybean Association, told a hearing of the Senate Finance Committee. According to Ragland, US soybeans exported to China now face levies of 34 per cent, reflecting Beijing's retaliatory duties, the most favoured nation rate, and China's value added tax. While US soybean farmers have searched for years for alternatives to the Chinese market, Ragland said it could not be completely replaced given the 'sheer volume' of its demand. The US sells more soybeans to China, by value, than any other single product, even after President Donald Trump, then in his first term, launched his first trade war against the country in 2018, which drastically reduced US soybean exports.
Yahoo
13-05-2025
- Business
- Yahoo
US farmers say Brazil still has edge in China's soybean market despite trade truce
By Tom Polansek CHICAGO (Reuters) -A surprising tariff pause between Beijing and Washington will not help U.S. farmers gain soy sales in China without additional concessions, producers said, because top-supplier Brazil still has a competitive price advantage. Under the truce announced on Monday, the U.S. will cut extra tariffs it imposed on Chinese imports to 30% from 145% for the next three months, while Chinese duties on U.S. imports will fall to 10% from 125%. Soybean export premiums fell in Brazil on the de-escalation, reflecting expectations that China could buy more from the U.S. But American farmers said the tariff pause isn't enough. Brazil, the biggest soy supplier to China, has ample supplies from a record harvest and its farmers do not face the Chinese tariff that U.S. competitors do. China, the world's largest crop importer, already sources roughly 70% of its soybean imports from Brazil. "The tariff that remains in place for U.S. soy is far from inconsequential," said Caleb Ragland, a farmer in Magnolia, Kentucky, and president of the American Soybean Association. "Products purchased from our competitors in Brazil and Argentina are not burdened with this extra cost." While the U.S. in 2022/23 accounted for about 28% of China's soybean imports, it has been a critical market for U.S. farmers, representing more than half of U.S. soybean exports in the most recent marketing year. President Donald Trump's trade war created an opportunity for Brazil. The country aims to export even more agricultural goods to China, including sorghum, pork and chicken, and seize market share, said Luis Rua, who oversees foreign trade for Brazil's Ministry of Agriculture. "What they (China) will buy is what they barely need to get by," Dan Henebry, a corn and soy grower in Buffalo, Illinois, said. "If South America is short... they'll buy from us." Chinese buyers have also avoided U.S. wheat and bought 400,000 to 500,000 metric tons from Australia and Canada in recent weeks, traders said. U.S. farmers hope that China may buy American crops as part of trade negotiations with Washington. Some growers said they would make advance sales of their autumn corn and soy harvests if crop prices rise because of increased demand. The pause is set to expire just before U.S. farmers begin harvesting soybeans and corn, an important time for exports. They planted fewer soybeans this spring than last year because the crop looked less profitable than corn. The truce did little to address underlying issues that led to the dispute, including the U.S. trade deficit with China that has aggravated some farmers. Beijing did not fulfill commitments to buy more U.S. agricultural products under a trade deal it struck with Trump during his first term in 2020. "The situation was bad before we started and something needed to be done. The situation is still bad," said Ron Heck, a corn and soy farmer in Perry, Iowa. At the time, China had slashed purchases of U.S. crops, prompting Trump's administration to pay farmers billions of dollars in aid. "It doesn't appear that we solved anything after that turmoil," said Henebry. "We're right back at the baseball plate trying to see if we're going to hit a home run or strike out again."
