April 5, 2018
Bret Davis voted for Donald Trump in 2016, as did many of his fellow farmers in central Ohio. But as a brewing Chinese trade war begins to threaten U.S. exports, Gordon fears his fifth-generation farm will suffer. The farm, where Davis and his stepson grow 1,300 acres of soybeans, corn and wheat for Ritz crackers, may not withstand the long-term drop in crop prices a trade war could bring, Davis said. And although he supports President Trump's goal of making foreign trade more “balanced,” he's increasingly concerned that Trump's methods could harm the rural Americans who helped put him in office. Soybean-producing counties went for Trump by a margin of more than 12 percent, according to a Washington Post analysis. And yet on Wednesday, Davis and thousands of other farmers woke to the news that China had proposed retaliatory tariffs on soybeans, corn and other row crops as part of a trade war the president started. Farmers say they haven’t given up on Trump. But they’re increasingly alarmed by his approach. “The way he’s going about this is not the way I would’ve done it,” Davis said. “My way would’ve been talking about it first, rather than just [imposing tariffs]. But Mr. Trump’s way to deal with anything is to throw a diversion into a room and then sit down and talk about it.
China buys 60 percent of all U.S. soybean exports to feed a growing fleet of hogs, fish and chicken. The high demand has made soybeans a bright spot of profitability for farmers at a time when many other crop prices are down. But Trump’s aggressive tariffs against Chinese goods, meant to protect U.S. intellectual property and manufacturing interests, have incited retaliatory actions that farmers say threaten their profits. In the hours after China floated a levy on soybeans, futures prices dropped 4 percent, or 40 cents, to $9.97 a bushel. That price is approaching the break-even point on many farms, said Arlan Suderman, chief commodities economist at INTL FCStone. Long term, the prospects are even worse. Although soybean prices rallied Thursday morning, they were still down more than 20 cents. Within three to five years, Tyner's model shows, Brazil and Argentina would replace the United States as China’s main source of soybeans. That could force U.S. farmers to switch to less lucrative crops, such as corn or wheat. Dave Walton, who tends soybeans, corn and livestock in eastern Iowa, is not sure his farm could take the added stress. “If this turns into a longer-term thing, we’re going to see friends and neighbors go out of business,” he said. “If this stretches into years, we ourselves won’t be able to sustain it.”
