MSA Policy Update: Tariff Proposals Hit Soybean Farmers
Exclusive April 5, 2018 update for Missouri Soybean Association members from Missouri Soybean Association president and Tarkio, Mo. farmer C. Brooks Hurst.
The Chinese Commerce Department’s proposal to roughly triple tariffs on U.S. soybean is a substantial threat to Missouri soybean farmers’ bottom line in a time of already tight farm margins. Within the announcement of new and increased tariffs on roughly $50 billion in imports, U.S. soybean saw a 25 percent increase – going from a Value Added Tax of roughly 11 percent to total duties of more than 35 percent in the April 3 proposal.
The morning of April 3 soybean futures were down nearly 40 cents per bushel on the proposal announcement from the Chinese Commerce Department. At a projected 2018 crop of 4.3 billion bushels, U.S. soybean farmers lost $1.72 billion in value Thursday. For Missouri farmers, that works out to a loss of roughly $20 per acre.
That loss comes on top of continuously tightening farm margins. Crop prices are down 40 percent in the last five years, and farm income is down 50 percent compared to 2013.
Soybean is Missouri’s number one cash crop, contributing $7.7 billion in total output, $3.2 billion in added value, $1.4 billion in labor income to the state’s economy, and supporting more than 20,700 jobs. China is the destination for nearly one out of every three rows of annual soy production, and 60 percent of total U.S. exports. In 2017, China imported $13.9 billion of U.S. soybean.
The 30-day comment period for President Trump’s corresponding proposal to increase tariffs on imports from China presents an important opportunity for farmers across Missouri to remind the President and his staff, as well as the Legislative Branch, of the importance of soybean and agriculture. Farmers have invested significantly in developing their international markets for soybean, including China, and should not bear the brunt of discord on China’s policies on intellectual property and information technology.
The Missouri Soybean Association is working closely with partners at the American Soybean Association, U.S. Soybean Export Council and Missouri’s congressional delegation to ensure our farmers’ livelihoods aren’t used as leverage.
To learn more about these or other policy issues affecting Missouri soybean farmers, contact your Missouri soybean staff at (573) 635-3819 or through mosoy.org. You can also access important policy information through the American Soybean Association, online at soygrowers.com.