Recent trade disputes between the Trump administration and China have had a heavy impact on farmers in Missouri, where the soybean industry dwarfs other crops in terms of acreage and production value.
“[China accounts] for something like 60 percent of total U.S. soybean sales in a typical year,” Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri-Columbia, said on Monday’s St. Louis on the Air. “So losing a chunk of that market’s a very big deal.”
Blake Hurst, president of the Missouri Farm Bureau, told host Don Marsh that he and fellow farmers have been directly experiencing the fiscal consequences this year, including a 20 percent drop in soybean prices.
“We’ve got a double whammy – trade problems plus a good crop [in the Midwest as a whole] – so we’ve got low prices that are below profitable level,” Hurst said.
Hurst said that he and other Missouri soybean farmers are left hedging their bets.
“What you’ll see is farmers holding very tight to their inventories and just moving their soybeans as they need cash,” he said. “And so [on] our farm we’ll be holding onto [inventory] well after the first of the year in the hope that things get better. We do have some of them hedged, some of them pre-priced, and that helps a bit. But it’s a gamble, now, whether to hold or sell.”
Westhoff added that U.S. soybean exports for 2018 are currently expected to be down by about 400 million bushels relative to previous expectations, while production is up by 300 million bushels compared to what was expected before the tariffs were announced.
He noted that the continually evolving situation at the national level has made it difficult to decide on the best assumptions for making future projections about the farm economy.
“We tend to assume that current policies will remain in place, so that means in our case we continue [current] trade restrictions indefinitely into the future,” Westhoff said. “If that’s actually what happens, prices in the market may well be lower in front of us.
“If, on the other hand, some of the rumors that have been bandied about recently were to come about and we actually have a resolution, prices could rebound … future markets respond to presidential tweets in recent days.”
Hurst said he hopes that “if nothing else maybe we’ve learned or are in the process of re-learning a lesson that’s very important.”
“Trade really is a benefit to all of us,” he said.
St. Louis on the Air brings you the stories of St. Louis and the people who live, work and create in our region. St. Louis on the Air host Don Marsh and producers Alex Heuer, Evie Hemphill, Lara Hamdan and Xandra Ellin give you the information you need to make informed decisions and stay in touch with our diverse and vibrant St. Louis region.