Free Trade

Trump's Trade War Continues To Crush Soybean Farmers

Soybean exports to China have fallen by 74 percent in the past year.

|

President Donald Trump often tweets about the "patriot farmers" on the front lines of his trade war with China. Those farmers, meanwhile, have been conducting trade diplomacy.

"We must have this market," Derek Haigwood, an Arkansas farmer and chairman of the U.S. Soybean Export Council, told The Wall Street Journal. "You can't produce another China, at least not overnight."

Haigwood was part of a group of American agricultural business leaders who visited China in April. The group's goal was to keep up good relations with Chinese importers even as the two governments remain entrenched in a trade war. Despite some positive signs in recent weeks—Trump postponed plans to hit Chinese imports with more tariffs, and the two sides have agreed to restart talks—meetings between Trump and Chinese President Xi Jingpin at last week's G-20 conference did not produce a deal, and China's retaliatory tariffs on American agricultural goods remain in place.

Farmers planted more than 89 million acres of soybeans across the United States in 2018, narrowly edging out the 88 million acres of corn. The United States is the world's largest exporter of soybeans, with nearly half the U.S. crop exported annually—and China has been the largest importer of those goods.

In 2016, China imported a record 36 million metric tons of soybeans from the U.S. Last year, it bought just 8.3 million metric tons of the crop. Before the trade war started, about 40 percent of all American-grown soybeans were exported to China. The loss of that export market has caused a glut of supply, leading prices to fall by as much as 25 percent.

The U.S.'s loss has largely been Brazil's gain. The South American country's portion of world soybean exports is expected to hit 52 percent this year, the Journal reports.

As I wrote last month, the biggest concern for soybean farmers across the country is the unknown long-term consequences of the trade war. Will the massive Chinese market for soybeans be there if and when the tariffs are lifted in a year, or two, or five? Or will China keep buying Brazilian soy instead?

"The soybean market in China took us more than 40 years to build," Davie Stephens, a soybean farmer from Kentucky and president of the American Soy Association, said in a press release. "As this confrontation continues, it will become increasingly difficult to recover."

Groups like the Soybean Export Council are now trying to open other foreign markets to American-grown soybeans to make up for the loss of sales in China. But it's virtually impossible to do that. Even if European consumers were to double their soybean purchases from American growers, that would amount to less than half of the Chinese market. Clearly, restoring stable trade with China is critical for American farmers.

The fact that trade associations are continuing to talk with Chinese importers is instructive. Trump often tries to portray global trade on the most macro of levels, as if America and China were each a singular corporate entity. But the reality is that trade happens on a smaller scale, with soybeans passing from farmers to wholesalers to exporters to importers because each exchange is mutually beneficial to the individuals involved. Keeping those channels of communication open, as Haigwood and the others know, is essential if there's ever to be a return to normalcy.

Advertisement

NEXT: Short Circuit: A Roundup of Recent Federal Court Decisions

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. More bad economic news.

    ‘This doesn’t look like the best economy ever’: 40% of Americans say they still struggle to pay bills

    As anyone who pays attention to Mr. Buttplug or Rev. Kirkland knows, people who can’t pay their bills usually vote Republican. So it’s tempting to say they deserve the economic ruin Drumpf has caused.

    Nevertheless, this situation is unacceptable. Our economy will only recover when a Democratic President abolishes Drumpf’s tariffs and enacts the Koch / Reason open borders agenda.

    #DrumpfRecession

    1. Even more bad economic news.

      Stocks fall after strong jobs report dampens hope of a Fed rate cut

      Paul Krugman predicted the market would never recover from the hacked election of 2016. Everything that has happened in the past 2.5 years has proved him right.

      #KrugmanWasRight

      1. #keepupthegoodworkguywhowasntiresomefourmonthsafterhestartedhislamecharacter

        1. You managed to make 4 errors in a single hashtag. I’m non-binary (they / them pronouns), so you misgendered me 3 times with “guy” and “he” and “his.” And I’m not a “lame character” either; everything I post is 100% sincere.

          1. Ohhhhh, check out Sergeant Semicolon over here. Are you trying to impress me? If so, it’s working.

            Titania McGrath has 300k Twitter followers and a book deal, and you have my grammatical respect. It seems even.

            1. I feel like you’re trying to post jokes, like really, really hard… just not quite getting there

              1. Someday I hope I will really… make you laugh.

              2. Crusty’s humor is like Trump’s hair.

          2. You missed the missing ‘t’.

        2. They criticize you because you’re #winning.

    2. I loled at “Mr Buttplug”

  2. Why did China stop importing soybeans just because the American farmers were paying tariffs on the soybeans? That doesn’t make any sense – didn’t the Chinese government appreciate the free money flowing into their treasury from the US? They should have a little talk with Donald Trump about how tariffs work, then surely they’ll start buying more soybeans. The higher the tariffs and the more soybeans they buy, the more money they make!

    1. Soybeans are an important part of hog rations and China is the world’s largest pork producer. Most of China’s soybean imports are used for this, not tofu. Now a virulent African swine virus is killing off 1/3 to 1/2 of pigs in China. This has a big effect on soybean imports, but don’t expect an urban hipster scribbler to know anything about agricultural commodities.

      1. +1

        Reason magazine is a sewer of easily refuted propaganda.

        https://vegnews.com/2019/5/african-swine-flu-set-to-kill-200-million-pigs-in-china

        1. I didn’t know about the flu thing. Thanks for the link.

        2. Yeah, thanks for the link. For a second there, I almost thought tariffs were bad!

          1. You will ignore any information that runs counter your narrative? Tariffs may not be a good thing (taxes generally aren’t) but Boehm is vastly overstating his case and completely ignoring anything that runs contrary to it.

            1. As Thomas Sowell would ask, compared to what?

              Why should domestic *labor* be taxed when purchased, but not foreign goods?

              Cui bono?

              1. Neither should be taxed. And I am sure Thomas Sowell would agree.

                1. “Muh anarchy”

      2. I was just going to point out swine flu has drastically reduced China’s swine herd, severely reducing the demand for soybeans. Even without the trade war, soybean farmer would be stuck with grain in the bins this fall.

  3. lol These soyboys are mad Trump keeps winning.

    There is no such thing as free trade, and the only way to make trade more fair and more free is to continue winning the war on the COMMUNIST Chinese front.

    1. Hello, Crusty,

      ──”There is no such thing as free trade”──

      Yes, there is. It is whatever Trump and his merry crowd of white supremacist and economically incompetent Trumpistas don’t like.

      ──”[…] the only way to make trade more fair and more free is to continue winning the war on the COMMUNIST Chinese front.”──

      “If you don’t stop right now, I’m gonna… I’m gonna stab myself with this knife here! ”

      Yeah, he’s “winning” on all fronts ──you Trumpista(*)

      (*) Term of extreme derision.

    2. Reason: Free trade is when American workers pay payroll and income taxes, while Emperor Xi’s imports pay no tax.

    3. Satire account… you aren’t doing it right.

  4. It can be hard to feel sorry for America’s welfare queen farmers.

    1. Better than a bunch of size queen farmers, am I right?

  5. ──”‘The soybean market in China took us more than 40 years to build,‘ Davie Stephens, a soybean farmer from Kentucky and president of the American Soy Association, said in a press release. ‘As this confrontation continues, it will become increasingly difficult to recover.’“──

    That’s your comeuppance for voting for an economically illiterate, buffoonish, narcissistic sexual predator with orange-peel skin, you whinny motherfucker.

    1. The Left’s love of their fellow man on display.

    2. Reason is ignoring the fact that China’s swine herd was decimated by swine flu and 90% or so of American soybeans sold to China are used as swine feed. Blaming tariffs (alone) is pure asinine partisanship.

      1. Boehm is cherry picking his data, not providing context, and beojg generally dishonest?

        Shocking!

  6. Here’s the algorithm to write a Boehm article.
    1) Cherry pick one thing getting worse.
    2) Orange Man Bad!
    3) Ignore the macro improvement in every major economic statistic.

    Clown Magazine.

    1. 1A) do not mention other underlying reason things have gotten worse in this one industry either.

      1. 2) Attribute the entire outcome to Orange Man Bad!

  7. Boehm is reporting on this story like the last week never happened.

    “CHICAGO (Reuters) – The U.S. Department of Agriculture (USDA) on Friday reported a large soybean sale to China, an apparent goodwill gesture a day before the first meeting between U.S. President Donald Trump and Chinese President Xi Jinping in seven months.

    The USDA said Chinese importers bought 544,000 tonnes of U.S. soybeans for shipment in the 2018/19 marketing year which expires Aug. 31. It was the largest U.S. soybean sale to China since late March, USDA data showed.

    The USDA said in a statement the sale was new and not a change of destination of a previously announced sale.”

    —-Reuters, June 28, 2019

    China is dropping its trade war against American soybeans in tandem with Trump dropping his threat to hit China with another round of tariffs. Talking about what’s happened over the last year doesn’t make a lot of sense if you’re not planning to talk about what’s happened over the last week–and what’s happening now.

    Oh, and if you want to talk about what’s happened over the last year, a big chunk of the drop in demand for soybeans in China is due to the outbreak of African Swing Fever–not that Boehm cares about facts or logic, but most of the rest of you do . . .

    1. Trump controls the means of production!

      1. Production of cadavers? The Prez is Commander-in-Chief of the Armed Forces and required to see the laws are faithfully executed. The Gee-oh-Pee picked the most competent and least disgusting actor among the contenders to push its Nationalsocialist agenda. From a libertarian perspective it makes more sense to have a fence than to export naziism to South America. But since the fascisti are hell-bent on packing foreign courts with mystical prohibitionists and wrecking their economies, the wall makes even better sense–until the Republican party can be replaced by something laissez-faire.

        1. “Nationalsocialist agenda”

          The socialists are on Team Blue.

          1. Hank is batshit insane, and really loves murdering babies.

    2. Talking about what’s happened over the last year doesn’t make a lot of sense if you’re not planning to talk about what’s happened over the last week–and what’s happening now.

      From the article:

      “Despite some positive signs in recent weeks—Trump postponed plans to hit Chinese imports with more tariffs, and the two sides have agreed to restart talks—meetings between Trump and Chinese President Xi Jingpin at last week’s G-20 conference did not produce a deal, and China’s retaliatory tariffs on American agricultural goods remain in place.”

      Oh, and if you want to talk about what’s happened over the last year, a big chunk of the drop in demand for soybeans in China is due to the outbreak of African Swing Fever

      And yet, “The U.S.’s loss has largely been Brazil’s gain. The South American country’s portion of world soybean exports is expected to hit 52 percent this year, the Journal reports.”

      1. I didn’t say that the trade war was a good thing. I didn’t say that the tariffs haven’t hurt American soybean farmers or that their competitors in other countries haven’t benefited.

        I did say that equation is likely to change going forward as well as the short term demand for soybeans in China due to the African swine fever–and I’m not sure how what you wrote is supposed to correspond to what I wrote.

        1. Ken Shultz
          July.5.2019 at 5:35 pm
          Boehm is reporting on this story like the last week never happened.

          Ken Shultz
          July.5.2019 at 5:41 pm

          Is that all Trump’s fault too?!

          Now I know how George Orwell must have felt. It’s not enough to argue for libertarian–we have to defend against our comrades who argue for it badly, too.

          1. What are you trying to say here?

        2. For someone who didn’t say that the trade war was a good thing, you sure spend a lot of time not saying that the trade war is a bad thing.

          1. That’s what they said about Orwell.

            For a socialist, he sure spent a lot of time criticizing communism!

            When people stop making factually incorrect statements in favor of free trade, I’ll stop pointing them out.

            And if you think that supporting free trade means I have to support any argument made in its favor–regardless of how uninformed, ignorant, or wrong it is–then you’re the one who’s a phony. My support for free trade doesn’t need to rely on bullshitting anybody about anything.

      2. lol check out this soyboy, “ohhhh look at me I read.” lol

        1. “The latest Export Sales report from USDA showed 867,564 MT of soybeans sold in the week of June 27. That was a 13-week high, thanks to a large sale to China (a weekly total 607,328 MT), and 54.5% larger than the same week last year.”

          —-Commodity Newswires, July 5, 2019

          https://www.barchart.com/futures/quotes/ZSN19/overview

          Did you read anything about that stat?

      3. “expected to hit”

        Instead of blaming Trump for everything bad that ever actually happened, let’s blame Trump for everything we pretend will happen.

    3. +1
      Yet again, all the journalism at Reason occurs in the comments section.

      Clown Magazine.

      1. I suspect a lot of this younger bunch have an odd notion of what this audience is like. In college, they teach them to write as if they possess authority they don’t have and to write that way for an audience who knows more about the subject than they do. Chances are that your anthropology or history professor knows more about the subject of your term paper than you do.

        Once they graduate and get a job as a journalist, it makes it feel like they’re an authority on a topic–but the audience may still know more than they do. I once pointed out under one of Soave’s posts that although some people in comments were treating Soave’s arguments as if it were pro-free speech, there wasn’t anything libertarian about the argument Soave was making. Soave replied to me in comments that people could tell the argument was libertarian because of the masthead.

        Um . . . no, that kind of authority was never possessed by Milton Friedman, Fredrich Hayek, Ludwig von Mises, Ayn Rand, nor Murray Rothbard, Why would it belong to Robby Soave? Wrong is wrong, no matter the author or the masthead.

        I once saw an interview with Pavarotti toward the end of his career, shortly after he’d been booed off the stage at La Scala. When asked about the incident, Pavarotti said something to the effect that the patrons of La Scala have been obsessed with opera for generations. They know the repertoire as well or better than the performers. The most enthusiastic of them attend every opera performance at La Scala. They think they’re the world’s highest authority on Italian opera–and I think they’re right! He was agreeing with their assessment of his performance.

        The Three Tenors belting out a golden shower of hits may sell records to the general public, but, no, the patrons of La Scala aren’t about to applaud a shitty performance just because it was performed by Pavarotti and he’s Italian. I’ve seen Suderman’s work on healthcare critiqued in comments by a staff attorney for a large hospital network and by someone who used to help write the payer software for most of the large hospitals and hospital networks in the country. Their criticisms were brushed aside like they’re coming from Tony. “Experts” were cited instead.

        There have been commenters here who were fighting in Afghanistan and Iraq, indie music pioneers, Wall Street professionals, et. al., and when they’re criticizing our work with facts and logic on those topics, we really should listen. Every rational libertarian is an authority on something. Yeah, I want to hear what a landscaper or restaurant guy from SoCal has to say about my ideas on immigration. The reason my posts are so long is because I’m hoping that when I bare by thinking to scrutiny, some rational libertarian who knows more about something than I do will point out where I’m wrong. This place has made me smarter.

        Anybody who works around here and blows the opportunity to take advantage of this situation in that way is really blowing it. Libertarian construction workers are far more authoritative than a general audience, and if our arguments can’t withstand their rational scrutiny, then our arguments need to change.

        1. ” Soave replied to me in comments that people could tell the argument was libertarian because of the masthead.”

          Arrogant and dismissive.

          Though what strikes me, and gall me most about Reason, is how intellectually dishonest they’ve become. They aren’t this stupid. They’re consciously pushing propaganda they know to be intellectually bankrupt.

  8. “The Dutch bank, which late last year put China’s herd at an estimated 360 million animals, projected in April that between 150 million and 200 million of them will die, either after contracting African swine fever or by culling.”

    —-Washington Post

    https://www.washingtonpost.com/world/asia_pacific/as-swine-fever-spreads-asian-countries-cull-millions-of-pigs/2019/06/28/d507d6bc-984d-11e9-9a16-dc551ea5a43b_story.html?

    They’ve already had to destroy a big chunk of the China’s swine herd because of the disease. My understanding is that the majority of the soy going to China is used for pig feed. Now, the market is expecting China to cull about half of its soy eating swine herd because of African swine fever. The virus is spreading to Malaysia and Vietnam, too.

    Is that all Trump’s fault too?!

    Now I know how George Orwell must have felt. It’s not enough to argue for libertarian–we have to defend against our comrades who argue for it badly, too.

    1. Trump caused the catastrophic flooding in the American Midwest by pulling out of the Paris Climate Accords. ORANGE MAN BAD !

      1. See my ode to SIV below, which is supposed to be a reply to this comment.

        1. Is this Palin’s Buttplug?

    2. “comrades”

      Check your premises.

      Globalist corporatist propaganda outlets are not *my* comrades.

      But you do you.

      1. The point was that Orwell may be remembered best for eviscerating his fellow socialists.

        The use of the world “comrade” to refer to my fellow libertarians was also supposed to be ironic.

        1. I beg your pardon.

          You’ve come around to view Reason as a false flag aiming to discredit libertarianism?

          Excellent!

          1. I’ve certainly noticed that people like Tony, Shrike, and ChemJeff are the ones defending the staff these days–when lefty, socialist trolls like that used to come to argue against staff.

            1. Oh, just as an off: did you see the other day after I asked ChemJeff about the logistics of a plan he proposed on immigration, he disavowed the plan and said it was yours?

              1. I have no idea what he’s talking about.

              2. I really hate that fucking kid. And as immature and idiotic as he is, I can’t imagine him being much older than a college sophomore. And I apparently live in his head now. He went on a tirade about me last week at great length.

                I found it very entertaining.

            2. “when lefty, socialist trolls like that used to come to argue against staff.”

              Back in the day when the staff wasn’t lefty, globalist trolls.

              But except for Tony, I don’t think most of the trolls around are actually socialists. More like anarchist SJWs. It’s exactly the coalition Nick wants. Globalist Open Borders Uber Alles.

  9. Given the massive farm subsidies Americans have been paying to farmers year after year, the farmers should just STFU for a while.

  10. What’s wrong with Brazil profiting from soybean sales to China? Is Boehm one of those deplorable economic nationalists now? Reason has long held we should “spread the prosperity around” even if it is to the detriment of US workers and businesses.
    You got what you want now quit our bitching. As much of the cornbelt midwest was hit by devastating floods, farmers in the rest of the country are anticipating huge profits by planting corn this year. Where I’m at right now I see vast acerage of rapeseed and field peas (for making pea protein for your vegan-favorite fraudulent Franken-foods. Farming is always a gamble and soybeans are shaping up to e a ad et again this year. Celebrate the creative destruction.

    1. “Consistency is a social construct of the white supremacist cisheteropatriarchy used to oppress marginalized peoples.”

  11. Does city boy Boehm think “soybean farmers” can only grow soybeans?

    1. As wet as much of the Midwest has been. They’ll be lucky to plant anywhere close to normal levels and have anywhere close to normal harvest.
      The commodity markets are playing a short game right now. And the USDA recent planting report in June appears to be drastically overstating how well planting has gone according to most critics. Current winter wheat (hard red) from the southern plains harvest appears decent but protein levels are down. Corn and soybean planting acreage looks fairly normal but most believe a good portion of that was prevent planting. Corn prices are already rising, driving down beef prices. I suspect pork and chicken prices will fall too. Wheat and durum prices are kind of a head scratcher right now. Though if this wet, cooler, humid weather continues here on the northern plains we will be dealing with fungal infections, reducing the value of our wheat and durum.

      1. And Australia’s wheat harvest was far below average. My understanding is that the Ukraine and Kazakhstan may not be having good years either.

        1. Okay mea culpa, Ukraine is forecasted to be above average but Kazakhstan is far below average.

      2. Grand Solar Minimum

        The GSM guys were predicting crop failures from the new solar cycle, and earthquakes within days of CA.

    2. Does city boy Boehm think “soybean farmers” can only grow soybeans?

      Exactly. It’s not like farming is some kind of industry where you have to make decisions months ahead of time. So there’s a little market uncertainty. Suck it up farmers. It’s for the greater good.

      1. There is always market uncertainty. But you can hedge. You forward market, sell under contract or gamble. Most farmers wait until as late as they can to buy seed. They read market forecasts and tend to be pretty versed in things such as the Asian monsoon season and European wheat forecasts. This wasn’t a surprise that took them unaware. Soybean markets and other pulse crops plunged before the Chinese tariffs. They were declining in part because of massive tariffs put into place (unrpovoked) by India and Pakistan.

      2. Suck it up farmers. It’s for the greater good.

        The US government has been paying farmers large subsidies for decades with the justification that farms are not like other producers and have to serve the national interest. So, yeah, farmers should “suck it up”; that’s what we have been subsidizing them for.

        Of course, long term, we should get rid of farm subsidies, tariffs, income taxes, capital gains taxes, the fed, and deficit spending. But short term, neither farmers nor consumers have any justification for complaining about the tariffs.

  12. The Crevocoeur hen’s name he records,
    as “Paris Climate Accords”,
    the Orloff rooster, baptized with zeal,
    as “Iran Nuclear Deal”, and
    a Yurlov Crower, his sweetie,
    dubbed “U.N. Arms Trade Treaty”.
    When SIV goes on a youtube blitz,
    watching Daddy’s greatest hits,
    he gets to feeling a bit tiddly,
    and starts pulling out repeatedly.

    1. Only a cuck would pull his cock from his cock.

  13. Most ‘soybean farmers’ are just ‘farmers’, who change the crops they plant depending on anticipated demand or other factors. If China isn’t buying soybeans, they will plant something else that they expect will give a better return.

    I live in a rural, agricultural area and this is precisely what is happening. Instead of planting soybeans, farmers are planting wheat and corn. And they will sell it, because people always have to eat.

    1. It is beyond me why Reason this citified clown write about anything more closely related to agriculture than food trucks.

  14. I guess KMW was wrong. reason will continue to put out garbage propaganda articles through Sunday.

    Boehm…do an article on the DOW Jones. Hahaha.

  15. How about relieving soybean farmers of all individual income tax liability, kind of like televangelists? Tariffs would certainly be less irksome then, right?

    1. Cool story bro.

  16. Again, he embarrasses himself on a tariff issue. the fact that China isn’t buying specific soybeans doesn’t mean they were incinerated and never sold.

    Here’s how to tell if Eric is right: look at the prices for soybeans. If they have shot up, then he might be. But they’re not. Flat.

    1. and because people never can read: I’m not defending the tariffs. I’m pointing out this guy has no idea what he’s talking about when he writes about their effects

      1. He’s talking about Orange Man Bad!

        What more does he need to know?

  17. I have to ask….who is really being harmed here.

    The article implies individual soybean farmers are somehow getting crushed by these tariffs. Maybe the question should be….just how many individual soybean farmers are there, really? My understanding is that farming in the USA is done more by huge corporations. That fiction on product packaging where you see a single farm or a single farm implement implies there is an individual doing it, when nothing of the sort is happening at all. Farming is a big business.

    So who is really getting hurt? Companies like ADM and ConAgra. I find it hard to summon up ‘tears’ for them. They are transnational companies, and can find other customers. Alternatively, they can donate foodstuffs to local food pantries and get a tax write-off.

    I am not a fan of tariffs, but it IS a tool in our economic toolbox to level the trading playing field from documented cheaters like China. POTUS Trump is using this tool. If you do not like it, then vote him out.

  18. […] soybean exports to China have declined by some 74 percent in the past year, according to reports. According to […]

  19. […] commodities agrícolas americanas, entre elas a soja. O resultado foi a importação chinesa de apenas 8,3 milhões de toneladas de soja americana em 2018, contra o recorde de 36 milhões em […]

  20. […] watching their crops rot and incomes evaporate without access to the export markets they’ve cultivated for decades. The government recently announced a $16 billion plan to compensate farmers for the losses […]

  21. […] watching their crops rot and incomes evaporate without access to the export markets they’ve cultivated for decades. The government recently announced a $16 billion plan to compensate farmers for the losses […]

  22. […] watching their crops rot and incomes evaporate without access to the export markets they’ve cultivated for decades. The government recently announced a $16 billion plan to compensate farmers for the losses […]

  23. […] watching their crops rot and incomes evaporate without access to the export markets they’ve cultivated for decades. The government recently announced a $16 billion plan to compensate farmers for the losses […]

  24. […] watching their crops rot and incomes evaporate without access to the export markets they’ve cultivated for decades. The government recently announced a $16 billion plan to compensate farmers for the losses […]

  25. […] watching their crops rot and incomes evaporate without access to the export markets they’ve cultivated for decades. The government recently announced a $16 billion plan to compensate farmers for the losses […]

  26. […] Donald Trump’s trade war is slowing investment in America, taxing American farmers and businesses, and, so far, has not produced any of the new trade deals the president […]

  27. […] watching their crops rot and incomes evaporate without access to the export markets they’ve cultivated for decades. The government recently announced a $16 billion plan to compensate farmers for the losses […]

Please to post comments

Comments are closed.