By Chris Cornwall
The soybean may be firmly planted in the history of Hendricks County thanks to ”soybean pioneer” Adrian Parsons, but the current “trade war” between China and the United States has left local farmers in a field of speculation as they plan for the future. On April 4th, Chinese officials added soybeans and corn (among 106 items valued at $50 billion) to the already existing list of proposed tariffs.
A Purdue University study released March 28th estimates the impact of the soybean tariff could decrease exports to China by 30 to 70 percent. The estimates are particularly sobering when you consider China is our 2nd largest agricultural export market. According to the U.S. Trade Commission, the market was valued at $21 billion in 2016 and soybeans alone accounted for $1 billion of that number.
The proposed tariff is part of a larger response from China in a trade war that the Trump Administration hopes will eventually erase the trade deficit. But while the tariff would not take effect if an agreement between the two countries is reached, the war continues to escalate as farmers in Hendricks County near planting season.
David Wyeth, Indiana Farm Bureau district director for Hendricks County, and a third-generation soybean farmer from North Salem, said the proposed tariffs add more uncertainty to a business already influenced by the unpredictability of Mother Nature.
“We are getting ready to plant our first crop and there is always a concern about how the weather is going to be, but when you compound this on top, it could really have a domino effect on what the next six months holds,” Wyeth said. “It’s not just farmers that would be affected but the entire Ag economy from equipment dealers to chemicals to seed dealers, the whole nine yards.”
The added worry may not have come at a worse time. Wyeth said farmers are already facing a tough agricultural economy. He also noted that while a soybean tariff would have far-reaching consequences, China’s list includes several items produced by Hendricks County farmers.
“The tariff would eventually affect everybody in a negative way regardless if you are a grain producer, or a livestock producer. Because at the end of the day, you are either selling soybeans for profit, or animal protein for profit, and even if your input costs for animal protein may be down (because soybean meal is used as feed for many animals), livestock items are on the tariff as well.”
But despite knowing what could happen if the tariffs ever take effect, Wyeth said it’s important to stay optimistic.
“One thing I think we need to keep in mind is that this could all be a short-term, knee-jerking reaction to things. We need to stay optimistic and look at the long term.”