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

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

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.”

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.’”

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.
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.

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.

Comments (31)

  1. Submitted by David Lundeen on 05/21/2019 - 09:38 am.

    See George Conway’s tweet: i.e there is never a plan

  2. Submitted by Paul Udstrand on 05/21/2019 - 09:52 am.

    If these farmers think there’s a “plan” other than Trump and his ego they’re in for many more rude awakenings.

  3. Submitted by Pat Terry on 05/21/2019 - 10:07 am.

    Trump lacks even a basic understanding of how trade and tariffs work. There is no plan.

  4. Submitted by Wes Davey on 05/21/2019 - 10:20 am.

    I’d like to be empathetic to the farmers (which includes family members) who are struggling, but what did they expect when they overwhelmingly voted for failed New York City businessman Donald Trump in 2016? Fidelity to the causes of rural America? Not a chance.

    Two years later, in the 2018 elections, farmers and other rural voters of the 1st CD doubled down on their bad bet by voting for Republican Jim Hagedorn, a rubber stamp for all of Trump’s bad ideas and policies (the right-leaning Washington Examiner published an article in April 2018 titled “Jim Hagedorn: The worst Republican candidate in America?”).

    For someone of the 60’s generation, the lyrics of a Pete Seeger song come to my mind: “Oh, when will they ever learn? Oh, when will they ever learn?”

    Come the elections in 2020, we’ll see if our country has learned from the lessons of Trump and friends. I’d like to be hopeful.

  5. Submitted by Ray Schoch on 05/21/2019 - 10:30 am.

    Elections have consequences.

    In this case, “Trade wars are easy to win” revealed early on that Mr. Trump (and, it should be noted, his Republican trade advisors) has no idea what he’s talking about when it comes to international trade, and there should be no surprise that many of the people who voted for him are themselves the victims of his lack of both understanding and caring. Subsidies (read: bribes) to farmers around the soybean issue don’t mean Trump is sympathetic to farmers’ concerns, They mean only that Trump realizes he’s sure to be a vilified ex-President if he loses farm voters in the Midwest. As Lundeen, Udstrand and Terry point out, there is no plan.

  6. Submitted by Henk Tobias on 05/21/2019 - 02:18 pm.

    “…with virtually no information from Federal officials as to what will happen next.”

    Sometimes I’d like to feel sorry for journalists who have to write lines like this. Anyone that’s been paying attention knows that there is no plan and that no one in the Federal government knows anymore that anyone else, because the child in the White House will change it all in a hot second for no reason what-so-ever. Just on a whim or something he saw on Fox and Friends or something someone said to him a few minutes ago.

    The whole world knows this and yet our poor journalists must pretend its all normal. I imagine its a horrible thing to have to deal with.

  7. Submitted by Pat Terry on 05/21/2019 - 02:52 pm.

    How do we get farmers to make the connection? That supporting Trump is going to bankrupt them?

    • Submitted by Greg Fynboh on 05/21/2019 - 04:56 pm.

      I ask myself that almost daily. I am a farmer and listen to many friends and neighbors claim Trump will make it all work out. “Just wait.” Patience can be a virtue, but farmers should know this best – when it is time to get something done it is, “by God, time to get something done!” Republican policies in general have been bad for my farm and I can’t figure out why I’m in the minority with my peers on this. Is my farm that much different?
      Maybe they really are afraid of the things republicans say we should be afraid of and they already know how to suffer economically “so what’s a little more suffering gonna do.”

      • Submitted by Laura Summers on 05/22/2019 - 04:41 am.

        Owner-operators of family farms are likely listening to all of these concerns especially if they are coming from their own children or their retired, elderly parents. In my experience also, comments about suffering and ‘catching up’ are holding patterns for decision-makers who may or may not fear they are failing the family firm, who are also worrying about the job security or health of dependents earning the ‘off-farm’ income that pays the weekly grocery bill and feeling more than challenged when budgeting and planning this year’s crops because of the extra burdens of exceptionally bad weather conditions. (Trump’s climate change denying isn’t credible in many rural regions of our state.) There is a lot of pride, much of it justified, in managing a successful farming business. It is unrealistic to expect good farmers to admit they voted wrongly, or to discuss next year’s election, especially with the media or the chatterbox cafe friends who voted differently.

  8. Submitted by JUDITH MONSON on 05/21/2019 - 03:38 pm.

    We’ve never before had a President who couldn’t tell a soybean from a turnip — and, most of all, didn’t care who got hurt by his unwillingness to live anywhere except in the moment at one of his “mob” rallies. Farmers who are willing to give Trump a chance to work things out for anyone but his own aggrandizement need to wake up. If only he had someone to read to him at night!

  9. Submitted by David Markle on 05/21/2019 - 04:33 pm.

    Characteristically, Trump has not organized our allies to deal with the China trade issues. Going it alone does not make America great.

  10. Submitted by Frank Phelan on 05/21/2019 - 09:33 pm.

    Journalists fail when they do not connect the dots, as in this story.

    It’s more than reasonable to ask economically aggrieved farmers who they voted for in 2016, why they voted that way, did they expect the candidate who touted tariffs to raise tariffs, and might they vote the same way in 2020.

    But then the way conservatives have been working the refs for two generations now, journalists are easily cowed, and too often pull their punches.

  11. Submitted by Tim Smith on 05/21/2019 - 10:14 pm.

    When did the alt left become free trade business and economic geniuses/experts? Lots of experience am sure. We have run huge trade deficits since the 70’s. Basically our standard of living robbed from us. Liberals used to hate it, now love it. Let us take less to be good citizens of the world.

    The prior occupants sat on their hands and did nothing,
    whats the dem plan to bring mfg back? They have none. They sit and complain to be contrary. Why do so called partners slap big tariffs on us? No answer I know.

    • Submitted by David Lundeen on 05/22/2019 - 07:33 am.

      What’s the president’s plan to deal with automation in the workforce? Everything from truck drivers to assembly workers can be automated, and that will only increase in the years ahead. This is a far bigger problem.

    • Submitted by Pat Terry on 05/22/2019 - 01:55 pm.

      Its not so much that anyone here is an expert. Its that Trump lacks even a basic understanding about how trade works and his policies are hurting Americans.

    • Submitted by Nick Foreman on 05/23/2019 - 08:45 am.

      Big business and Wall Street sent all the manufacturing to China, Mexico, etc. Republicans like you should look in the mirror as to the cause of the mess.

  12. Submitted by Terence Cunningham on 05/22/2019 - 09:13 am.

    Good comments above. Not much I can add, except that at paragraph five of Gabe’s article the market price of soybeans is not down at $2 bushel, but rather down approx $2 from the US market before the onset of Trump’s and China’s trade tariffs.

    • Submitted by Laura Summers on 05/22/2019 - 12:10 pm.

      Thanks for this correction which I noticed also. In relation to smaller, owner-operated family farms, it is important to remember that yields per acre (and total harvests) also vary from farm to farm depending on weather conditions, land quality, fertilizer and insecticide treatments if required and quality/efficiency of harvesting equipment and bin storage (increasingly rented).

      For those interested, here is the USDA’s latest forecast of this year’s global net farm, from March i.e. prior to the imposition of the latest round of tariffs. Notice, too, that the long decline in real, net farm incomes begins, according to USDA, some 15 (not 5) years ago. These figures are for all farm businesses and obscure variations from year to year among, say, farms concentrating on diary, soybeans, corn or pigs or some combination of these. This is important to note because farmers are this month taking decisions about which crops or animals they can afford to plant, keep or invest in.

  13. Submitted by Judy LaBoda on 05/22/2019 - 09:45 am.

    I work in a farming community. Our business is selling and installing grain bins and grain dryers. Next door is the local grain elevator. We employ 30 people and the elevator employes about 12. With the population in our county around 9k, most of them being farmers, I hope that Farmers and others are aware of how we are dependant on them for our employment as well! We are worried about main street! Our towns cannot afford to lose farmers and their crops. I just want farmers to be mindful of the trickle down effect of their decisions and their votes.

  14. Submitted by Kathleen Castrovinci on 05/22/2019 - 09:52 am.

    Farmers throughout Minnesota and the US who still support Trump are playing with fire.

    Do they not see that there are NO Markets open to them for their products? That the so-called tax payer bailouts they were CONNED about went to the large Corporate farms and not to the family farmers who need markets in order to make a living?

    • Submitted by Frank Phelan on 05/22/2019 - 01:19 pm.

      There are no tax payer bailouts of farmers.

      Don Trump is sending cash payments to farmers in an effort to buy votes by creating dependency. There is no drug testing of the recipients, despite the opioid crisis gripping rural America. No one is tracking these cash payments, which could well be ending up in the pockets of opioid dealers, the cash registers of liquor stores, or casino slot machines. My hard earned dollars, confiscated by the government, may be buying steak and lobster, which I cannot afford.

      Sad, really.

    • Submitted by David Lundeen on 05/22/2019 - 02:06 pm.

      Not to mention that once a market is lost, it’s hard to regain it. Argentina and Brazil will eagerly look to replace US soybean exports to China.

  15. Submitted by Aaron Albertson on 05/23/2019 - 09:04 am.

    Leave it to Hagedorn to support a trade war that’s gonna destroy Southern Minnesota’s economy outside of Rochester and Mankato

    • Submitted by Kathleen Castrovinci on 05/27/2019 - 11:47 am.

      How Jim Hagedorn tries to defend that will be telling. Looks like we need to go to Farmfest to find out.

      I read that Hagedorn is going to be holding Town Halls in all the Counties of the throughout the 1st Congressional District in the coming weeks, limiting them to 1 hour. The first one is in Truman on June 1st. People attending MUST Show an ID that they are a resident of the County, NO SIGNS allowed. Questions will be limited to County residents only.

      When Tim Walz was the 1st CD Rep, he held open Meet and Greets and Town Halls that lasted hours. I went to a lot of them. People from all over came and he answered as many questions as he could.

  16. Submitted by RB Holbrook on 05/23/2019 - 10:57 am.

    Meanwhile, discomfort over Trump’s trade policies has Mexico increasing its corn imports from Brazil, and also has Mexico discussing trade agreements to buy even more agricultural commodities (e.g. soybeans) from Latin America.

    So much winning . . .

    • Submitted by Frank Phelan on 05/23/2019 - 12:51 pm.

      In November of 2020 we’ll find out if farmers are tired of winning.

      If not, they will be undeserving of further sympathy .

  17. Submitted by Paul Udstrand on 05/23/2019 - 12:59 pm.

    Someone should point out that even Trumps bail outs don’t make to the actual Farmers. Very little of the last $12 billion actually made it out farmers, for a variety of reasons. Republicans and Trump officials just don’t do “aid” very well, even when they kind of want to. There’s no reason to expect any future “bail-outs” will work any better. Of course then the fact that we’re bailing out these guys AT ALL in the first place… while they demand cuts in education, welfare, and transit spending or everyone else.

    I can actually understand people being desperate enough to take a chance on Trump, to some extent. But you still had to flat our ignore so much basic information and behavior, and buy into sooooo much misinformation and so many lies. Even if we let that go, to STILL be expecting that Trump is going to make this work is beyond optimism and faith, it’s flat out delusional. I’m sure sucks for farmers, but they literally have no one but themselves to blame because without their votes, Trump would never have gotten into office.

    • Submitted by Kathleen Castrovinci on 05/27/2019 - 11:49 am.

      Like I said in my comment above, Farmers were CONNED. They are tax payers too, and paying for their own bailout was the plan. I read that a Farming Firm in Brazil received American Tax Payer money.

      • Submitted by Paul Udstrand on 05/28/2019 - 09:16 am.

        You can say that farmers were “conned” but they were voluntary suckers, and many of them are now complaining that THEY weren’t supposed be the ones that Trump hurt… it was supposed to be someone else. It wasn’t just desperation that motivated Trump voters, there was outright hostility towards their fellow Americans on a variety of levels. Those MAGA hats aren’t a kum ba ya calls for unity, they’re a declaration of “moral”, religious, and race war.

        The claim of being “conned” also falls apart a bit when we remember that Trump actually campaigned on the promise that he’d tear up these trade deals, farmers weren’t “conned” into voting for this, they thought it was a good idea.

        But I don’t want stomp on farmers, in fact I blame Democrats and the bi-partisan “consensus” for the farm vote. I can perfectly understand the desperation and frustration behind voters who didn’t see Clinton or the Democrats as champions or alternatives. To be honest while Clinton wouldn’t have launched the trade wars, she wasn’t offering any plans to actually DO anything for farmers. While I cannot bring myself to condone or support a vote for Trump, I likewise cannot condemn a refusal to vote for a status-quo that is failing. This was position that so many US farmers and workers were trapped in in 2016 AND now. And “centrist” Democrats are bound and determined to bring that failed status-quo back in 2020. I can completely understand the anguish farmers are confronting at this point.

        However I must admit, my sympathies, that used to be nearly unconditional, are strained these days. It’s difficult to get past the fact that these rural Trump voters weren’t simply seeking relief for themselves, they were voting to harm others. From immigrants to transit users and LGBT people they had a list of people and programs they wanted to attack. No one can deny that we all knew Trump was promising these attacks.

  18. Submitted by Paul Udstrand on 05/28/2019 - 09:48 am.

    Kathleen, it’s a little disingenuous to claim farmers are paying for their own bailout simply because they’re tax payers. We’re ALL paying for that bailout, just like we pay for the ongoing subsidies. The farm bailout is no different than any other “government” bailout. Trump voters seem to have ongoing and pernicious difficulty understand what taxes are and how tax money is spent but lets be clear about this.

  19. Submitted by edward Jenvey on 06/01/2019 - 01:59 pm.

    I think everybody has agreed for a long time that China is a bad actor economically. But, the main thing is not the trade imbalance in $$$ which, if the analysis is done correctly, is far less than what is being claimed. (And much of that can be addressed with a weaker dollar.) But the key thing is intellectual property. (Was was addressed in the TPP that we, for some reason inexplicable, pulled out of.)
    It seems to me a lot to ask for farmers to go belly up in order for tech companies and hollywood to make more money.

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