The Trump administration has authorized $12 billion in aid for U.S. farmers impacted by retaliatory tariffs imposed by China and other countries.
Soybean farmers in particular are hurting, not only because tariffs have made their products more expensive, but because soybean prices have plummeted.
CGTN’s Hendrik Sybrandy reports from the state of Louisiana.
George LaCour grows soybeans and other crops two hours northwest of New Orleans. He got his agricultural gene from his father.
“He’d a died if he’d known I was farming this much and borrowing this much money,” LaCour said. “He probably wouldn’t have given me a loan. I know him.”
In a business known for its up and downs, times are tough at the moment, he said.
“It’s tight, it’s tight,” LaCour remarked at one of his farms. “It’s tough to make ends meet right now.”
Several hours north, Jason Condrey is facing a similar situation. China’s 25 percent tariff on soybeans in retaliation for U.S. tariffs has thrown a serious wrinkle into his family’s farming operation.
“It’s scary for us right now,” Condrey said. “Our margins are so thin it’s unbelievable.”
Soybeans were once a relatively small part of Louisiana’s economy. But as China’s appetite for protein has increased, its demand for soy has sped up as well.
Sixty percent of U.S. soybeans are exported. More than half of those exports go to China, to make animal feed and cooking oil. It comes to some $14 billion worth each year, according to the American Soybean Association.
The tariff has made LaCour’s beans more expensive. His prime customer is looking elsewhere.
“The Chinese were an 800 pound gorilla and they still are,” LaCour said. “They’re just sourcing out of Brazil.”
The tariff has also driven down the price of soybeans by $2 a bushel in the past few months. LaCour said that’s pushed him into the red. And Condrey says he doesn’t have a cushion either.
“We don’t have a stockpile back there of money to ride this out, that’s the scariest part of it,” Condrey said. He’s had several years of low crop prices but says this year’s strong yield has helped.
In fact, the soybean tariff has benefited some businesses in the short-term.
“The export volumes going out have been significant, particularly in soy and other agricultural areas,” said Eddy Hayes, a trade lawyer with Leake and Andersson in New Orleans. “I think that they’ve had a lot of orders placed overseas in anticipation of this.”
LaCour believes the time for trade talks is overdue. He’d like to see China open up its agricultural markets.
“It’s time to let us sell the Chinese people some product,” he argued. “More so than just soybeans.”
“It’s not a fair trade balance, it’s really not,” Condrey said. “So this needs to happen. The timing of it is just wrong.”
The wave of tariffs comes after his crop has already been marketed, right before the harvest. The goal now is to find new places to send the soybeans. The hope on these farms is that a resolution to the world’s trade disputes comes soon.
“I have faith that it will, I hope it will,” Condrey said. “I hope we’re not dealing with these same issues going into next growing season.”
“At the end of the day, it’s the U.S. farmer that’s going to pay the price,” LaCour said. “Let’s negotiate, come to a fair deal and get back to the business of growing economies and feeding the people of the world.”