Tariffs
Tariffs, also known as taxes on imported goods, are a tool used by President Donald Trump as part of his overall economic vision. As U.S. agriculture navigates tariffs and their implications on trade, commodity prices, input costs and more, ag economists and farmers remain divided on the effectiveness of tariffs and what the changes mean for the broader economy and livelihoods.
China, the world’s biggest buyer of soybeans, has yet to book any U.S. soybean cargoes from its autumn harvest.
With most input prices still record or near-record high, farmers in parts of the country have seen eroding balance sheets for four straight years. Now the concern is more farmers will be forced out of farming this year, unless they see some type of market or government intervention.
Consumers may think that food inflation helps farmers because they assume we’re getting more money for our crops and our livestock. Yet this is not true. We don’t receive the shop price. A lot of what consumers spend goes to retail overhead, fuel and transportation, tariffs, and more.
Steve Censky, chief executive officer of the American Soybean Association, says unless China buys soybeans soon, they may be looking at aid similar to the Market Facilitation Program used back in 2018-19 during the last trade war.
Rich Nelson, Chief Strategist with Allendale, Inc. says corn was lower Wednesday, seeing some profit taking after getting overbought but the rest of the grain and livestock complex were also lower.
Even with talk of shrinking soybean yields due to the dry weather pattern that shut out rain for much of the Midwest and Mid-South in August, one fact remains: China still isn’t buying U.S. soybeans.
Mike Zuzolo, Global Commodity Analytics, says soybeans saw risk off selling as China aligned itself with Russia and India, which signals no deal between the U.S. and China any time soon.
Brad Kooima of Kooima Kooima Varilek says live and feeder cattle futures are back into new contract and all-time highs after showing considerable resilience last week and despite a selloff in the equities. Grains sell off on tariff concerns.
The Chinese government is continuing to instruct importers to avoid purchasing U.S. soybeans. Until that changes, soybean prices are likely to remain low.
The Trump Administration outlined plans to implement a 50% tariff on products from India.