BLOOMINGTON, ILLINOIS - The rolling fields of green soybean plants growing on Fred Grieder’s Illinois farm would be a welcome sign most years … an indicator of a promising harvest in the fall.
But this isn’t most years.
Tariffs are turning away potential customers overseas, and Grieder estimates he could lose around $100 an acre if the trade war continues.
“It’s a squeeze,” he told VOA from his farm outside Bloomington, Illinois.
?Lose $100, get $14 in aid
It’s a squeeze the Trump administration has acknowledged, prompting the U.S. Department of Agriculture to plan a $12 billion aid package to help farmers like Grieder.
“If you take the $12 billion, assuming it will all go to beans, which it won’t, and divide that by our planted acreage, that’s about $14 an acre” in government aid, he said.
Grieder says the aid does not even come close to making up for the $100 loss per acre he expects.
Since May, the price per bushel for soybeans has dropped almost 20 percent over the escalating trade war between the United States and China. Tariffs threaten to cut off important export markets, cutting into profits even as U.S. farmers brace for a fifth year of declining farm income.
It’s not that Grieder isn’t grateful for the aid package, but he says he would just rather have “trade over aid.”
“We appreciate the fact that the USDA is concerned about us, and want to make us whole,” he explained. “But the reality is the numbers, in a large trade war like this, are overwhelming.”
“This is not a natural disaster; this is a man-made disaster. It’s not an act of God, some would call it an act of foolishness,” said Mark Albertson, director of strategic market development for the Illinois Soybean Association.
Albertson said he believes the trade dispute with China is a greater threat to farmers than the drought of 2012.
“We had mechanisms in place to deal with that, and we always knew that the very next year we would be able to plant our crops again and hope for the best. In this case, we don’t know that,” he said. “We don’t know what the next year brings. We don’t have necessarily hope of the trade war going away very soon, and it looks like Brazil is all too eager to take away our market share with China.
“If they get used to purchasing more and more Brazilian soybeans, that spells bad news for us. That’s the overall concern, and an aid package does nothing to solve that problem,” Albertson said.
?Biggest worry: Competitors
It’s also farmer Grieder’s biggest concern.
“Brazil, one of our largest competitors, they are always expanding,” he said. “So this could affect our markets years down the road, and I’m probably more worried about that than I am the short wash out here.”
Albertson said another major challenge is what to do with the soybeans that can’t be sold.
“It looks like we may end up putting a record amount of soybeans in storage, and when that happens, we know from history the prices will go south,” he added.
As the trade war continues, Grieder’s routine remains the same. He hopes strong global demand for soybeans outside China will make up for decreasing prices. He’s waiting to see if President Donald Trump’s trade tactics will work before permanent damage is done to the reputation — and reliability — of U.S. grain products.
“I support what he’s trying to do. I can’t say that I support his methods,” Grieder said.