[COLOR=rgb(41, 105, 176)]…of economic sanctions and trade tariffs.
Already triggering anxiety at home. would they withstand domestic pressure? Is US economic power an empty shell?
Soybean, for example, is a major cash crop in Illinois, Iowa, Minnesota, Nebraska and Indiana among other states where it is either grown as the main crop or rotated with wheat to fix the soil.
[SIZE=7]Indiana soybean farmers wary of potential U.S. trade war with China: ‘We’re in a vulnerable time’[/SIZE]
David Rodibaugh stands on his 2,000-acre farm in Rensselaer, Indiana. Rodibaugh and his brothers’ farm will be hard hit by the recent Chinese tariffs as their primary income comes from pigs and soybeans.
(Suzanne Tennant / Post-Tribune)
Karen CaffariniPost-Tribune
David Rodibaugh is closely watching escalating developments as a possible trade war between the world’s two largest economies — the U.S. and China — because he knows he’ll be in the middle of it if it happens.
Rodibaugh, his three brothers and their families raise pigs and grow soybeans, corn and some wheat on their 2,000-plus-acre farm in Rensselaer — all products that China has said it would slap tariffs on in six months if the two sides can’t reach an agreement on trade issues.
President Donald Trump last month announced he would impose tariffs on Chinese steel and aluminum. China quickly retaliated, announcing it would target more than 100 American products, including pork, stainless steel pipe and aluminum scrap. A couple of days later, China added another 100-some products, including soybeans, beef and cars. Trump fired back with another round of tariffs late Thursday.
“How badly we’ll be hurt is hard to quantify, but a trade war does have the potential to affect us,” Rodibaugh said.
He said a tariff on pork, a perishable product, would be felt quickly, while a tariff on soybeans could hit especially hard.
“More than one-third of U.S. soybeans go to China. Right now the world inventory of soybeans is high. We’re in a vulnerable time as far as pricing already,” Rodibaugh said.
He said Brazil, which is America’s biggest competitor for the Chinese soybean market, could take a larger chunk as a result of the tariff.
“We compete with Brazil every day,” Rodibaugh said.
Melanie Fitzpatrick, spokeswoman for the Indiana Soybean Alliance, said farmers have already seen some volatility in prices, as a result of China’s announcement of a possible tariff looming in six month.
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David Rodibaugh stands near some of his younger pigs in Rensselaer, Indiana.
(Suzanne Tennant / Post-Tribune)
Immediately after China announced it would impose tariffs on soybeans and other products, the price dropped by 4 percent to $9.97 a bushel. On Friday morning, they were at $10.21 a bushel, still lower than the 52-week high of $10.71 per bushel.
China is said to be the biggest importer of American soybeans. In 2017, about $12.3 billion worth of soybeans were exported to China from the U.S., according to the Department of Agriculture.
Fitzpatrick said there are about 24,000 soybean farmers in Indiana. According to the alliance’s web page, they produced almost 302 million bushels of soybeans in 2014.
She added, however, that the farmers aren’t the only ones in Indiana who would suffer economically if tariffs are implemented.
“Indiana’s economy in general could be impacted. Real communities could be affected, including those who sell farm machinery, seed dealers and those with livestock,” she said.
Most soybeans are processed for their oil and protein for the animal feed industry.
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According to Indiana Pork Farmers’ Facebook page, there are 3,000 family pork farmers in Indiana, making it the fifth-largest pork farming state in the nation. They contribute $3 billion to the state’s economy each year and make enough pork to feed 25 million people each year. Indiana pigs are the leading consumer of Indiana grain.
Rodibaugh said he produces about 6,000 pigs a year for harvesting. While his pork doesn’t go to China, he said he would still feel the effect of a tariff.
“The prices are inter-connected,” he said.
He said a processing plant in Delphi ships one-quarter to one-third of its pork product to China.
Rodibaugh said pork farmers have made a large effort in the last 10 to 15 years to make enough product available to meet China’s needs. He said the country especially helps American pork farmers be more profitable because it purchases the lower value portion of the animal, such as the tongue and ears, that others don’t want.
Farmers aren’t the only ones who could be hurt by the proposed tariffs.
The Institute of Scrap Recycling Industries released a statement that noted the U.S. exported more than $1.1 billion worth of aluminum scrap to China, about half of its total exports.
“The Chinese government’s announcement will impact this significant U.S. scrap export, spurring concern that exports of additional scrap commodities could be impacted in future announcements,” the association stated.
Local members of the association contacted did not return calls for comment.
While beef is also being targeted by China, beef farmers here won’t be hit as badly as others, according to Joe Moore, executive vice president of the Indiana Beef Cattle Association, which has about 1,000 active members.
He said that’s primarily because U.S. beef farmers have essentially been cut off from the China market for 13 years, since the Mad Cow scare.
“Last year, total beef exports to China were only $31 million,” Moore said.
While Moore doesn’t want to see beef listed as a target under a trade war between the two countries, he said he’s more concerned with talks of redoing NAFTA, the North American Free Trade Agreement, between the U.S., Canada and Mexico.
“Canada and Mexico are the two biggest countries we export to. Agriculture and manufacturing have different needs,” Moore said.
Neither Rodibaugh nor Fitzpatrick want to see any kind of trade war.
“The Indiana Soybean Alliance and the Corn Growers Association are hoping this gets resolved. In the meantime, it’s creating a great deal of uncertainty,” Fitzpatrick said. “China is a very important export market for corn, soybeans and livestock.”
Rodibaugh said trade agreements are important to all agriculture products, as it gives farmers a level playing field.
“In the end we really need each other. We’re producing food for China,” he said.
“I can’t point to one example where anyone wins a trade war,” Rodibaugh added.
Karen Caffarini is a freelance reporter for the Post-Tribune.
