Minnesota soybean farmers growing increasingly concerned over trade war

MINNESOTA, USA — Minnesota soybean farmers are heading into harvest season with one of their biggest buyers boycotting their crop. While growing conditions have been favorable this year, the state’s largest agricultural export is caught in the middle of the U.S.-China trade war. 

China is historically the largest buyer of U.S. soybeans, but the country has now turned instead to South America. In fact, China has not bought U.S. soybeans since late May.

According to the Minnesota Department of Agriculture Commissioner Thom Petersen, the loss of China’s market has left farmers scrambling to sell their crop elsewhere.

“On a given year, 30% of our soybean crop can be exported, with China being our biggest buyer,” Petersen said. “When they’re not buying, we’ve got to look at other smaller markets like Japan, South Korea, or Colombia.”

For farmers like Kyle Jore in northwestern Minnesota, the problem extends beyond sales. With China out of the equation right now, storage facilities are filling quickly, raising the question of where to put the millions of bushels about to come off the fields. 

“I typically store at the co-op,” Jore explained. “But this year they told me it’s going to be tight, and I needed a backup plan.”

In order to sell some product, farmers are dropping their prices, cutting into their already marginal profits. Just last year, Minnesota farmers were selling soybeans for more than $10 a bushel. Today, those cash sales are closer to $8.80. 

During the 2018 U.S.-China trade war, farmers ended up receiving a $23 billion bailout from the federal government. This week, Minnesota farmers were in the nation’s capital pleading again for a bailout.

“No farmer wants to get a payment, you know, but with tariffs and with other things going on, I think it’s something that we should look at,” said Petersen.

Bob Worth, a soybean farmer and director with the American Soybean Association, says young farmers are feeling these impacts the greatest. 

“The average farmer in this country is over 60,” Worth noted. “We cannot lose anymore young farmers. They don’t have the net worth that the older farmers do, or working capital, and it’s making it extremely, extremely tough on them.”

Worth says on top of the trade war, the bad equation right now is simple. Prices on everything farmers buy is going up, while everything they sell is going down. Last year, soybeans earned Minnesota nearly $3.3 billion in agricultural sales. This year, the question is not how big the harvest will be, but how much it will be worth.