High tariffs cause soybean price to plummet

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American farmers receive billions of dollars in federal aid every year to protect them when prices fall due to weather or market fluctuations.

President Donald Trump’s proposal to place tariffs on imported goods has affected farmers in Avoyelles Parish and across the nation as prices drop and supplies pile up as other countries impose tariffs to counter Trump's actions.

This past Tuesday (July 24) Trump proposed a $12 billion bailout for farmers and ranchers hurt by the widening trade war. The proposal would provide farmers with direct financial assistance, purchase excess produce and develop new export markets. Wednesday Trump announced Europe would be opening its doors to U.S. soybeans.

The Trump administration says the plan is not a bailout, but rather “a short-term solution” until the trade disputes are resolved.

The main problem in this area is the dispute with China, who slapped high tariffs on U.S. pork and soybeans in retaliation for tariffs imposed on Chinese products imported in America.

The administration said it will use a Depression-era program to secure the money from the U.S. Treasury and will not need congressional approval.

There has been widespread criticism of the proposal, even from Republican congressmen. The American Soybean Association’s response was, “It’s a whole lot easier not to wreck the car in the first place than it is to think about what a repair might look like.”

“Soybeans are one of the commodities that has been affected by the tariffs,” Avoyelles County Agent Justin Dufour said.

He said he did not know all of the specifics in the proposed aid to farmers.

Soybeans are the parish’s largest commodity with an average of 86,000 to 88,000 acres planted each year.

“The initial impact of the tariff announcement left farmers uncomfortable,” Dufour said.

“However, there are some farmers who are optimistic about the future. Right now prices are $8.56 a bushel. Some people paint a picture of doom and gloom of $7 a bushel when we need the price to be in the double digits.”

Effie farmer Randy McGee farms 3,200 acres of soybeans. With the tariffs set and a drought in the parish, this year is looking “dim,” he said. “I was encouraged by the news from the Trump administration Tuesday,” McGee said. “Anything will be a help to us. It will be a help in the long run.”

Mark Decuir of Cottonport farms 2,400 acres in the Cottonport-Plaucheville area. He estimated the foreign tariffs are costing soybean farmers 18-20 percent of their gross income, which affects the profit.

Losing that amount “will hit farmers hard,” Decuir said. “Agriculture is an enormous economic factor in Avoyelles and the nation.

“The farmers are an originator of goods in the U.S. when most of the economic engine is driven by the service industry,” he continued. “Our industry ranges from the sale of chemical and seeds to trucking and tractors. ”

McGee and Decuir also said they did not know how much the proposed aid would benefit agriculture because they haven’t seen the proposal.

Decuir was quick to add that anything would help to offset the effects of the tariff.

'WE NEED RAIN'

“With the price of beans right now, it would be tough to turn a profit considering the price it takes to plant the beans,” McGee continued. “We need a rain.

That would help us.” McGee estimated it costs $250 an acre to plant beans, just to get started each year. That does not count rent, diesel fuel and other items needed to maintain the crop. He gets about 50 bushels per acre each year.

“We need to get $10 to $11 a bushel just to break even,” McGee said. “$12 a bushel will give us a little profit.

“The cost to plant beans is killing us,” he said. “It keeps rising each year.”