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Tariffs weigh on commodity prices

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Soybean exports have been hindered by tariffs imposed on China by the Trump administration. (Forum News Service file photo)

There’s little doubt that past tariffs imposed by President Donald Trump on China have impacted exports of some U.S. agricultural commodities, but how much is not certain.

It’s also difficult to characterize how many farmers are angry at Trump for the tariffs or whether they support his efforts to make trading between the two countries more even.

Tariffs have been partly to blame for reduction in soybean exports during the past marketing year, which began Sept. 1. Total soybean inspections/exports this marketing year were nearly 27% lower than a year ago, the U.S. Agriculture Department reported on May 31.
Soybean inspections/exports for the Pacific Northwest to China, meanwhile, were 66.5% lower than during the previous marketing year. A year ago, 435.1 million bushels of soybeans were exported from PNW to China, USDA said.

“Soybeans that have gone from North Dakota that we expected to be exported out of the PNW have gone down dramatically this year,” said Nancy Johnson, North Dakota Soybean Growers Association's executive director.

“You can see it in our market right now,” said Johnson, pointing out that prices have fallen as a result of China not buying as many bushels of U.S. soybeans.

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Not only farmers, but also railroads and grain terminals that invested large amounts of money in improving infrastructure to accommodate soybeans movement to the Pacific Northwest port have felt the effects of the tariffs, she said.

But Trump took a necessary step when he imposed the tariffs, said Jeff Mertz, a Hurdsfield farmer and North Dakota Grain Growers Association president.

“In an ideal world, we wouldn’t want any tariffs, but the tariffs are on and we will have to go with it,” Mertz said. “I think for many years the U.S. has taken a back seat to China and let them walk all over us.”

The Trump administration has tried to compensate for the money lost in the tariffs by announcing a $16 billion aid to farmers, Mertz said.

“They’re trying to do their part to make it fair," he said.

Besides the tariffs, another factor that has weighed on soybean imports is African swine fever, which has resulted in a lot of swine deaths in China. As a result, demand for soybeans has softened, according to Johnson and Mertz.

“Their pig population is in dire straits. That’s having a big impact, also,” Mertz said.

North Dakota Wheat Commission President Neal Fisher said he believes that the signing of the United States Mexico Canada Agreement should show both China and Japan that the U.S. is serious when it talks trade.

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“I think it is a very good statement,” Fisher said. “This is another step in the right direction. "

Related Topics: AGRICULTURE
Ann is a journalism veteran with nearly 40 years of reporting and editing experiences on a variety of topics including agriculture and business. Story ideas or questions can be sent to Ann by email at: abailey@agweek.com or phone at: 218-779-8093.
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