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China Tariff Threats Worry US Farmers


Soybean farmer Scott Halpin tends to his crop in Morris, Illinois.
Soybean farmer Scott Halpin tends to his crop in Morris, Illinois.

Farmer Scott Halpin is facing another year of high prices for seed and fertilizer, and low prices for the corn and soybeans his family is planting on farmland outside Morris, Illinois.

“Equipment is expensive,” he told VOA while taking a break from loading seed into the John Deere planter that will eventually place them in the soil. “Land is expensive. It costs a lot of money to put a crop in the ground.”

As U.S. farmers head to their fields to plant this year’s crop, they face new challenges created by Chinese threats to impose tariffs on some of their products, a retaliatory move in the wake of pending U.S. tariffs on Chinese aluminum and steel.

WATCH: Chinese Soybean Purchases Plant Seeds of Concern for US Farmers

Chinese Soybean Purchases Plant Seeds of Concern for US Farmers
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It’s the latest salvo in an escalating trade dispute that has farmers warily watching fluctuating commodity prices as the United States Department of Agriculture (USDA) projects net farm income in 2018 to reach a 12-year low.

Any potential Chinese tariffs could impact the price of soybeans and ultimately Halpin’s bottom line.

“Soybeans make up just under half of our crop rotation,” Halpin said. “It’s a real important part of our farm operation here.”

Added into the mix are new concerns that buyers in China, the world’s top consumer of soybeans, have stopped purchasing supplies from the U.S., even before tariffs are in place.

Soybean farmer Scott Halpin at work on his Illinois farm worries about how a potential trade war with China could impact his bottom line.
Soybean farmer Scott Halpin at work on his Illinois farm worries about how a potential trade war with China could impact his bottom line.

For Halpin, the bad news seems relentless.

“It can hurt when things happen on a daily basis. It’s just kind of uncertain times here in farming,” he said.

Not unbearable

Uncertain, but not unbearable, says Phil Flynn, senior market analyst with Price Futures Group and a contributor to Fox Business Network.

“Even though China is talking tough, they realize that they cannot get into a trade war with the United States because they have a lot more to lose than we do,” Flynn told VOA.

According to the USDA, China imports about 63 percent of the world’s total export of soybeans, and is the second-largest export market for U.S. grain products.

“There’s not a lot of places that can replace American soybeans in the near term,” Flynn said. “And the tariffs are probably not going to be enough to change Chinese purchases, because at the end of the day there’s going to be a time and place that the only place that they can get soybeans or soybean meal is going to be the United States even at a higher price.”

Big picture vs security

Halpin says he understands the big picture and the need for fair trade, but farmers could use a little security in these tough economic times.

“We understand that there’s inadequacies in the overall trade. Yeah, it makes us a little uneasy. Soybean market(s) are such a big part of the overall ag economy and China is such a big player and we need China to buy our soybeans,” he said.

Or someone else needs to step up and take China’s place.

“If China is buying from another country, somebody else is going to be looking for our soybeans. It would just be nice to have some stability,” Halpin said.

FILE - Matt Aultman, a grain salesman and feed nutritionist with Keller Grain & Feed, Inc., speaks beside grain and soybean silos at their facilities in Greenville, Ohio, April 5, 2018. Rural America is struggling under a cloud of uncertainty as the Trump administration escalates a trade dispute with China.
FILE - Matt Aultman, a grain salesman and feed nutritionist with Keller Grain & Feed, Inc., speaks beside grain and soybean silos at their facilities in Greenville, Ohio, April 5, 2018. Rural America is struggling under a cloud of uncertainty as the Trump administration escalates a trade dispute with China.

While the uncertainty isn’t changing the Halpin family’s overall plans this planting season, it could be a different story during harvest time later this year.

“The prices and the markets dramatically affect the way we do things here on the farm,” he said.

So does the weather, which is another great uncertainty all farmers face.

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    Kane Farabaugh

    Kane Farabaugh is the Midwest Correspondent for Voice of America, where since 2008 he has established Voice of America's presence in the heartland of America.

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