Kentucky Soybean Farmers Feeling the Financial Strain of China Tariffs
Kentucky soybean farmers are struggling with uncertainty and loss of income because of tariffs imposed by China, in retaliation for President Donald Trump’s tariffs on Chinese products coming into the U.S.
The impact of the escalating trade war between the U.S. and China began reverberating on Kentucky soybean farms about three months ago. The uncertainty hit the soybean market even before China’s 25 percent tariff on U.S. soybeans went into effect in July.
Jed Clark is vice chairman of the Kentucky Soybean Board. He farms 1,100 acres of soybeans in Graves County and said he’s seen the value of his crop decrease in the past few months because of the Chinese tariffs.
“If I had to sell my beans right now, versus if I sold them all in May or early April, what I could have got for them, then versus now, because of what the tariffs have cost us, is about a dollar a bushel.”
For example, if Clark raised 40,000 bushels of soybeans, the value of his crop would have gone down $40,000, if he had to sell.
Clark said some Kentucky soybean farmers are in a ‘wait-and-see’ mode.
“Right now a lot of farmers are just hoping they can fill their grain bins with the beans they are growing this year and not have to sell ‘em in this downturn," said Clark. "Hopefully the tariffs will get worked out by the midterm elections or sometime before the end of the year, where we can get this burden off the market of losing this huge export market that we have in China.”
About 60 percent of U.S. soybeans are exported to China. Some trade experts predict that market could be lost for the long-term unless the tariff issue is resolved and the trusted trade relationship built over decades is restored. Other countries, like Brazil, could begin to fill China's requirements for soybeans.
In addition to the impact of the tariffs, Clark said Kentucky farmers have already been under financial strain because of overproduction and a decrease in farm revenues over the past five years.