Nonprofit, nonpartisan journalism. Supported by readers.

Donate
Topics

As trade war escalates, Minnesota soybean farmers wonder: What’s the plan?

Minnesota is the third largest producer of soybeans in the country after Illinois and Iowa.

soybeans
In 2018, Minnesota produced 389 million bushels of soybeans, with a total value of $3.328 billion.
REUTERS/Dave Kaup

Soybean farmers in Minnesota are struggling amidst an escalating trade war between the Trump administration and China, with virtually no information from Federal officials as to what will happen next.

This month, long term trade negotiations between the U.S. and China fell apart, with President Donald Trump announcing additional taxes on $200 billion of Chinese imports. In turn, China responded with $60 billion in tariffs.

The tariffs have impacted a variety of American goods, like beer and swimsuits, but they’ve been particularly brutal for one industry: soybean farmers. Minnesota is the third largest producer of soybeans in the country after Illinois and Iowa. In 2018, the state produced 389 million bushels of soybeans, with a total value of $3.328 billion. China has been the largest purchaser of the U.S soybean crop has been in recent years, which spells trouble for Minnesota farmers looking to access those same international markets.

“That’s a market that farmer’s have literally built with their own funds to be able to trade with the Chinese,” said Jamie Beyer, a soybean farmer from Wheaton, Minnesota. “And that trade was completely stopped last year.”

Article continues after advertisement

The President insists that China pays for the tariffs, but soybean farmers are being candid about the impact of the taxes on their day-to-day lives. For Beyer, the price she can get for a bushel of soybeans is down by about 2 dollars a bushel. That means around $200,000 dollars of lost income that her farm needs to pay for land maintenance, tractors and seeds.

“These tariffs are definitely hurting Minnesota farmers right now,” said Minnesota Agriculture Commissioner Thom Petersen. “Losing any market is incredibly painful, and it’s resulted in farm income is at an historic low.”

Industry advocates say it took U.S. soybean farmers about 40 years to expand into the international soybean market in China. The American Soybean Association, which represents soybean farmers around the country, has remained staunchly opposed to tariffs to address any trade deficits with China.

The trade conflict between the U.S. and China took root well before last week. President Donald Trump complained about China’s trading practices throughout his campaign, and began the process of imposing tariffs in 2017. The anxiety from the farm community in the state has been palpable since, but the tolerance that many farmers had when the trade war began may be starting to wane.

President Donald Trump
REUTERS/Joshua Roberts
The President insists that China pays for the tariffs, but soybean farmers are being candid about the impact of the tariffs on their day to day lives.
“We had no way to prepare for the significant disruption to our markets that was brought on by trade disputes last year,” said Mike Peterson, a family farmer who owns 800 acres of corn and soybeans near Northfield, Minnesota, told the House Agriculture Committee on May 9.

“While I originally supported the goals of securing better trade agreements and holding bad actors accountable, the approach to these trade disputes has caused damage that I’m afraid will take us decades to overcome.”

What’s the plan?

Last July, in her role as the Vice President of the Minnesota Soybean Growers Association, an affiliate of the The American Soybean Association, Beyer went visit Sen. Amy Klobuchar to talk about the conflict. Seeing behind the curtain, Beyer’s concerns about how trade decisions were being made weren’t assuaged at all.

“She was pulling her hair. Literally,” Beyer said of Klobuchar. “She said: ‘There’s no plan. No one’s talking to the USDA. There’s no one talking to us. There’s no one working on this trade deal.’”

Article continues after advertisement

Since then, Beyer said that there has been some success with programs to aid farmers throughout the conflict, but that farmers are still in the dark prior to trade escalations like the one this month.

“Our biggest frustration is that the tariffs gets announced prior to any announcement prior about keeping farmers afloat,” she said. “It seems to be in a backwards order, in my opinion.”

From inside the halls of government in Washington, there isn’t much more clarity on when or how this trade war will end.

“Our country needs to get back to the negotiating table, and making trade policy one tweet at a time is not going to get us there,” Sen. Amy Klobuchar said. “Bushels of soybeans are sitting in silos and farm families are paying the price. This is real, people are suffering, and small farms are going under.”

Senate Agriculture Chairman Chuck Grassley, R-Iowa, seems to have run out of patience with the President’s insistence on the trade war as well.

“I’m no fan of tariffs,” Grassley told the New York Times last Tuesday. “I’m disappointed by the news of additional tariffs out of Beijing and here in Washington. Both countries are going to be hurt.”

In the House, Minnesota Republicans are supporting the President’s tariffs and saying blame should be placed on China. “Our trade negotiation with China is at a the cross-road,” Republican Rep. Jim Hagedorn, who represents the soybean dense region in the southern part of the state, said in a statement. “China has been one of our strongest trading partners and also the most difficult. China has long cheated, manipulated their currency and stolen our intellectual property.”

But House Agriculture Chair Collin Peterson, a Democrat who represents another soybean rich region in the western part of the state, mirrored Grassley’s criticism.

The additional tariffs do “nothing but use our farmers as political pawns and further ourselves from a real solution,” Peterson said in a statement earlier this month. “While I understand that the President believes he has good intentions on this, he’s doing it without understanding the impacts this has on farmers and our rural communities.”

Senate Agriculture Chairman Chuck Grassley, R-Iowa, seems to have run out of patience with the President’s insistence on the trade war as well.
REUTERS/Jim Bourg
Senate Agriculture Chairman Chuck Grassley, R-Iowa, seems to have run out of patience with the President’s insistence on the trade war as well.

Article continues after advertisement

Beyer said that she appreciates that legislators are always willing to listen and understand the gravity situation. She said that the conversation with many legislators in Washington used to be: “This is what a soybean is and this is why it’s important to Minnesota.” Now legislators actually have nuanced questions like: “What’s happening on your farm? What does the market look like? What cuts are you making?’”

But no matter how optimistic she remains, for her, there is a certain resignation in the reality of the economic downtown for soybean farmers, whose ability to make a living is now at the mercy of the Federal government.

“In Minnesota we’re on our fifth year of record decreasing incomes. You can only sustain those losses for so long. You’re either dipping into your savings, you’re dipping into equity, or your borrowing from banks,” Beyer said.

“There’s no magic money tree here.”

Correction: This piece has been corrected to accurately reflect the recent changes in the price of soybeans.