Soybean Tariff

Illinois soybean farmers wary of Trump’s proposed farm bailout

By Brady Jones
Medill Reports

President Donald Trump’s announcement July 24 pledging up to $12 billion in aid for American farmers, intended to offset potential losses from recent tariffs imposed by China, is receiving a lukewarm response as harvest nears in Illinois.

Among a multitude of American exports targeted by China, the 25 percent tariff on soybeans stands out as particularly significant for Illinois. The state ranks first in the country in soybean acreage and production, producing 611.9 million bushels in 2017, according to the Illinois Soybean Association. The United States sends an estimated 1.1 billion bushels of soybeans to China annually.

While he acknowledged the concerns voiced by American farmers about the financial impact of the competing tariffs between the U.S. and China, Trump issued the directive for the temporary aid while additional negotiations continue to take place between the two countries. Local soybean farmers, while appreciative of the financial assistance, say they don’t see this as a viable long-term solution.

“If trade is our problem, aid handouts are a poor solution,” said Lynn Rohrscheib, chairwoman of Illinois Soybean Growers, an organization with a membership of more than 43,000 Illinois soybean growers. “As producers, we would rather be able to sell our crop for a fair price and grow both agricultural export and market opportunities. Government handouts only provide short-term relief. The effect on our soybean supply chains could be disastrous if the U.S. government continues to pick winners and losers amidst this tariff spat.”

The United States grows approximately 35 percent of the world’s soybeans, according to the United States Department of Agriculture. And the tariffs imposed by China are predicted to decrease production—opening up a channel for countries such as Brazil to assume a larger share of the market. Having other countries competing for China’s business could force lower prices and provide a barrier to re-entry for American producers if the tariffs are eliminated.

Soybean producers are not the only local farming industry to feel exposed by the recent tariffs, as China also imposed a new 25 percent tariff on U.S. pork products. Illinois pork producers are connected to fluctuations in soybean pricing and production. Many pork producers use soybeans as a part of the feed for their livestock, and they are concerned about the myriad impacts of a potential trade war between the United States and China.

“The pork industry exports over 25 percent of our product, so the tariff issues have impacted our industry,” said Jennifer Tirey, executive director of the Illinois Pork Producers Association. “As for the soybean industry, our hogs consume over 700,000 tons of soy meal annually in Illinois alone.”

Illinois ranks fourth in the country in pork production. The pork industry contributes $1.8 billion and 10,000 jobs to the Illinois economy, according to the Illinois Pork Producers Association.

Beth Osmund, of Cedar Valley Sustainable Farm in Ottawa, Illinois, uses soybeans to feed her pigs. She said that while she is worried about the recent tariffs, her small family-operated farm hasn’t seen the direct impact yet.

“Hopefully we won’t see anything,” she said. Osmund purchases her feed, which is a mixture of products that includes soybeans, from a local co-op. She doesn’t think it will be felt as much at the local, family-run farms as it will for the larger exporters. According to the Illinois Farm Bureau, 86.5 percent of farms are classified as individual or family operations. However, that doesn’t ease the concern of the industry leaders, who continue to push for the elimination of all tariffs.

“We continue to advocate for an end to this trade war and echo industry concerns for trade, not aid,” said Rohrscheib. “We recognize the administration’s actions as being heard, but feel that any solution should involve rescinding the tariffs.”

“I believe all commodity groups are supportive of resolving the trade issues as soon as possible,” said Tirey.

Photo at top: Shoppers browse the produce at the Logan Square Farmers Market on Sunday. Both consumers and producers are concerned about the effects of the recent tariffs on American farm exports. (Photo: Brady Jones/MEDILL)