The moves have dealt a blow to soybean farmers in the U.S., who are strongly dependent on exports to China, and have continued to be priced out of the global market due to tariffs hiking the cost of their crop in the midst of its busy harvest season.
“The farm economy is suffering while our competitors supplant the United States in the biggest soybean import market in the world,” it concluded.
For the farmers, the changing market share dynamics isn’t personal, it’s just business, according to Ryan Loy, assistant professor and extension economist for the University of Arkansas Division of Agriculture.
“There’s a lot of politics involved, but at the end of the day, it’s a function of who is cheaper on the market,” Loy told Fortune.
“We’re probably just going to plan to sit on the soybeans and wait,” Jore said.
Many farmers trying to cut their losses will sell their soybeans to agricultural co-ops who will buy the crops, but at a much lower price than market rate.
“In the meantime, though, the producers that sell are taking large losses,” Jore said. “And they’re going to have to feel those losses.”
Extension economist Loy warned of the “ripple effects” of strained farmers on rural America.
“If farms in those rural communities aren’t successful, if they face financial hardships, then those rural communities also suffer, too,” Loy said. “All of these rural communities rely on agriculture to some degree. In its most extreme, if farms close up and businesses no longer have the customers there—or at least the customers don’t have the money to support them—businesses close and people move out.”
Jore called this feeling of concern for the wellbeing of the agricultural economy “deja vu.”
“The takeaway that we have from the data of the last time we did this is that the U.S. lost about 20% of our market share, and it never came back,” Main said.
“Even though in 2018 we were seeing similar revenues, this time around, we have significantly higher [input], so our margins are much more negative,” Jore said.
“It will compensate for the immediate economic losses due to tariffs, but it doesn’t necessarily improve the long-term competitiveness of agriculture on the global stage,” Zhang said.
Farmers aren’t banking on a bailout, either. They’re looking for a trade deal—or at least stable enough ground to grow their businesses, Illinois Soybean Association’s Main said.
“We can grow anything. What we really want is good relations with our trading partners,” he said. “We want markets. We don’t want bailouts.”
