CENTRAL ILLINOIS (WCIA) — Some farmer are feeling the pinch in their pockets as China and the U.S. fight over trade.
The U.S. exports about 50% of its soybeans and China is one of the biggest buyers. Since May, the prices have been dropping on crops.
Corn has fallen 50 cents and soy beans have dropped $1.50.
With the trade war escalating, those prices could fall even more.
“Trade wars and trade disruptions have a way of lasting a long time so we really get concerned about trade disruptions as we move 1, 2, 3 years into the future,” Gary Schnitkey, University of Illnois Professor of Farm Management.
While price drops could get even worse down the road.
Farmer, Jason Crider, works with cattle, corn and soy beans, and says farmers are already feeling the impact of the tariffs.
“These tariffs are really hurting us because we can’t say hey this is the price of for our soy beans. We have to take what’s out there,” says farmer Jason Crider.
“China not buying as much or tariffs placed on by China on our products is a big deal to U.S. agriculture,”states Schnitkey.
Schnitkey says farmers should make it through the year. He says yields are looking good and some farmers have already pre-harvest hedged their grain.
Some farmers and ranchers impacted by tariffs qualify for payments from the Department of Agriculture.
The trade war can make a difference long term making things difficult for farmers.
“We can’t obtain these lows for very long due to the fact that we’re not even going to make a profit with those prices so we’re going to have to make some tough decisions on the farm, what to do and what not to do the following year,” says Crider.
“Anything that hasn’t been pre priced is going to be priced lower and this winter we’ll begin to do cash flow and see where we’re at for 2019,” says Schnitkey.
Ultimately farmers would like the disruption to be over. So if everything could go back to how it was before the trade dispute that would be ideal for them.
Schnitkey says if we continue to see this trade disruption, over time other areas like Brazil and Argentina or even Ukraine will produce even more soybeans.
That means U.S. markets could go away and could have to focus more on corn and those prices would be driven down even more.