As the trade war between the U.S. and China rages on into its second year, Louisiana soybean farmers are preparing for an upcoming harvesting season that will likely be even worse than the one they suffered last year.
And that’s bad news for the state’s entire agriculture industry, as soybeans are Louisiana’s largest commodity in terms of acreage, says Andy Brown, soybean commodity director for the Louisiana Farm Bureau Federation. Not only that, other state crops are feeling the impacts of the trade war as well, including corn and cotton.
The trade dispute with China—Louisiana’s largest soybean export market—has escalated in recent weeks and things have gotten worse. U.S. agricultural exports to China, for instance, are at less than half of what they were at this time last year, Brown says.
Prices for soybeans, meanwhile, remain below $9 per bushel, down from $10 before the trade war began last year. And that’s not enough for most farmers to break even on the investment they made on this year’s crop.
“When soybeans fall below $9, you’re looking at red figures on most folks’ balance sheets,” Brown says, adding some farmers won’t be able to continue to weather the impacts of the trade war for much longer.
“Unfortunately, this winter, if everything holds, there will be some farms that go out of business,” Brown says. “I’m not talking about farms that started in the last two years. It could be generational farms.”
Could soybean farmers switch to another crop? It’s possible, but it would come with a cost, and most other crops aren’t as attractive as soybeans in terms of price, Brown says. Also, depending on the area, some farmers are limited as to what crops they can plant.
Pointe Coupee Parish farmer George LaCour says the tariffs and China’s retaliatory efforts have had a “devastating” impact on farmers and likely will continue to do so until the next presidential election in 2020. LaCour farms soybeans, corn, cotton and sugarcane.
“Some farmers are just barely making it,” he says.
LaCour admits the Market Facilitation Program payments, implemented by the Trump administration to offset farmers’ losses, have helped. He estimates the MFP payments make up about 80% of profits farmers are losing to the trade war.
And despite how long the trade war has waged with no resolution in sight, he continues to stand behind President Donald Trump’s reasoning—bringing about a fairer trading partnership with China.
“Agriculture is paying the price to put the country first,” LaCour says. “It’s important that we have fair trade with China. Trading with China over the last 19 years has been one-sided. We hope for a better deal for the country.”