Arkansas Soybean Farmers See 25% Loss Due To Tariffs

Jul 31, 2018

WORTH 25% LESS - Arkansas soybean farmers say their current crop has dropped from $10 to $8 a bushel thanks to tariffs.
Credit Courtesy: Arkansas Soybean Assn.

ARK SOYBEAN FARMERS -  Arkansas  Soy Bean Farmers have had it tough lately as the price per bushel of soybeans has dropped about 25%  due to the retaliatory tariffs by the Chinese in response to the Trump Administrations tariffs on imported products from China.

To get some idea what farmers face from all this market disruption,  you have to understand how their business model works.  Brad Doyle, who grows soybeans in Weiner, Arkansas shared a little of his world with Arkansas Public Media:

“Most farmers start their crop with a loan,  and they have to pay that back at the end of the year," explained Doyle. " So when we started  this year, we started with the intention or the thought that our soybeans were going to be worth quite a bit more than they are right now.”

Brad Doyle, Soybean Farmer, Weiner, Ark.

Doyle says that a bushel of his soybeans  that would normally sell for $10 now has a commodity market value of $8 thanks to the Chinese tit-for-tat tariffs due which effectively closes the soybean market to China for American farmers.  But farmers will receive some partial relief in the form of a $12 billion dollar aid package by the federal government to help farmers recoup some of their losses.

But billions of dollars in promised aid isn’t welcome news to  Josh Sewell, a senior policy analyst with the group: Taxpayers for Common Sense.

“The devil’s going to be in the details, " Sewell said. "But we think this is a step back in moving agriculture away from dependency upon Washington for success or failure  instead moving towards market.”

CROP VALUE FORECASTING - Farmers estimate future value of crops and borrow money to plant in hopes of a profit come harvest time.
Credit Courtesy: Arkansas Soybean Assn.

While the government’s $12 billion dollar relief package may allow some farmers to stay in business,  Arkansas  soybean farmer Brad Doyle says everyone in his business prefers a longer-term solution… and for the moment is hoping his losses can be recouped by focusing on other potential markets.

Doyle said "In the meanwhile, we're going to have to go to Japan, and Viet Nam, and Indonesia, Malayasia;  countries like that and to make up for the loss right now."

The US Dept of Agriculture has forecast that  domestic farm income will probably drop to about half of what it was five years ago… and that report came out well before the trade war began.