Ohio, Iowa, Louisiana, and Kansas — which all voted for Trump in the 2016 election — exported billions of dollars in soybeans in 2018. The tariffs war between the U.S.-China trade is punishing farmers, however. China, previously the biggest U.S. soybean export destination, turned off the spigot.
Blake Hurst, a soybean farmer and president of the Missouri Farm Bureau, noted on Yahoo Finance’s On the Move that farmers “don’t like the way [that] China acts in international markets, and they’re willing to be patient.”
However, he added that with “many of my neighbors, particularly younger farmers with a little bit of a more leveraged balance sheet, a lot of that patience is beginning to go away. So I think there’s going to be some challenges for the Trump administration come election time if we don’t see a turnaround in these trade markets.”
‘He took away all of our markets’
“This trade thing is what’s brought on by the president and it’s really frustrating because he took away all of our markets,” Bob Kuylen, a farmer from North Dakota, previously told Yahoo Finance.
At one point in 2018, U.S. soybean exports to China were down 98%. As China turned to other countries like Brazil for their soybeans, U.S. soybean inventories increased dramatically.
Soybeans “are easy to store, and we’ll be able to wait for better prices,” Hurst said. “But at some point, we have to get rid of last year’s soybeans. They have to go to market and have room for this year’s crop.”
There have been no indications that either side is going to relent soon. China announced in early August that it would put a hold on buying U.S. agricultural products. One American farmer described the move to Yahoo Finance as “another nail in the coffin.”
“We basically have a year to market a crop,” Hurst said. “We’ll sell some on the futures before that. We can obviously take futures protection on this year’s crop… but they have to move in the marketing channels in a year because we don’t have enough storage for two years of crops.”
Some have surmised that the U.S. and China might not reach a trade deal until the outcome of the 2020 election is revealed.
Hurst noted that China is “following the polls just like the rest of us and clearly think there’s a chance there will be a change and that the next administration will be easier to deal with.”
Adriana is an associate editor for Yahoo Finance. Follow her on Twitter @adrianambells.