How China's soybean tariffs affect suburban farmers
DuPage County farmer Ron Frieders dropped off a truckload of soybeans in Ottawa, where the Fox and Illinois rivers converge. From there, barges will carry the beans to the Mississippi River, south to New Orleans and across the world.
A system of navigable waterways makes Illinois one of the country's leading exporters of soybeans - in particular to China, the destination for one of every four rows produced, experts say.
So, when the Trump administration escalated rhetoric of a trade war with the Chinese this spring, and China promised retaliation with tariffs, farmers around the Chicago suburbs and throughout the state began worrying.
When both countries imposed the tariffs last week, it stirred even more uncertainty for farmers who want a quick resolution. Since May, soybean prices dipped about $2 per bushel to $8.55 Wednesday, less than the approximately $9-per-bushel cost to produce the crop in Illinois.
The ramifications may reach into some suburban communities, as experts predict farmers forced to continue selling at a loss will cut spending in other areas, such as farm machinery, storage bins, pickup trucks and chemicals.
"There's a lot of people who will not make it through this," said Frieders, the treasurer of the DuPage County Farm Bureau.
https://i.dailyherald.com/public-service/2018/soybeans/index.htmlPresident Donald Trump, who was attending the NATO summit in Belgium, sought to reassure soybean farmers in a pair of tweets Wednesday while acknowledging a solution won't come soon.
"I am in Brussels, but always thinking about our farmers. Soy beans fell 50% from 2012 to my election. Farmers have done poorly for 15 years. Other countries' trade barriers and tariffs have been destroying their businesses," Trump tweeted. "I will open things up, better than ever before, but it can't go too quickly. I am fighting for a level playing field for our farmers, and will win!"
Soybean prices fell about 33 percent from 2012 until Trump's election in 2016, according to the U.S. Department of Agriculture.
In short, the little bean is a big player in agriculture.
The USDA says just over 70 percent of the soybeans grown in the United States are used for animal feed, with poultry being the top livestock sector consuming soybeans. The second-largest market is for production of foods for human consumption, such as salad oil or frying oil, which uses about 15 percent of U.S. soybeans. A distant third is biodiesel.
Soybeans are particularly important here. Illinois was the top soybean-producing state in 2017, growing nearly 612 million bushels, and about 60 percent of the crop is exported, according to the Illinois Soybean Association.
The state's largest soybean-growing counties are downstate - McLean County produces 20 million bushels per year - while Will County led the six-county area with 5.7 million bushels in 2017, followed by Kendall, Kane and McHenry counties.
Kane County Farm Bureau President Joe White, who farms about 500 acres of soybeans west of Kaneville, said the situation is worrisome but that he's more concerned as a consumer about steel, aluminum and lumber. He predicted that as China looks to Brazil or Argentina for soybeans, other countries usually dependent on those South American countries will need U.S. crops.
"We're concerned," White said. "I don't want to underplay that, but we realize it's going to take some time. Is it going to get better or is it going to get worse?"
It could be getting worse. Gov. Bruce Rauner said Tuesday a trade war "could cause massive unemployment and job losses." The same day, the Trump administration promised to impose tariffs on another $200 billion worth of Chinese products, and China pledged Wednesday to take countermeasures.
Bona Heinsohn, the director of governmental affairs and public relations at the Cook County Farm Bureau, said it's important the trade war be resolved "quickly and congenially," not just for farmers but other residents, too.
"When you get into the collar counties and the more rural counties, the farm economy is a large driver of the local economies," Heinsohn said. "When individuals don't have money, they're not spending money."
Frieders also hopes new legislation or a trade agreement is reached soon.
"You have to have faith that things are going to get better, but it's pretty dire right now," he said.
Illinois soybean facts
• Illinois was the top soybean-producing state in 2017, growing nearly 612 million bushels.
• China is the top destination for Illinois soybeans.
• Illinois has 43,000 soybean farmers who farm 10 million acres.
• Animal agriculture is the No. 1 customer for soybeans.
• Hogs eat 74 percent of the soybean meal fed to Illinois livestock.