Results 1 to 7 of 7

Thread: "Trade War" with China Drives Soybean Prices Down in US, Up in Brazil.

  1. #1
    Senior Member
    Join Date
    Dec 2010
    Location
    Price County, WI
    Posts
    645

    "Trade War" with China Drives Soybean Prices Down in US, Up in Brazil.

    Since May, when the futures market began to anticipate China retaliating with tariffs on soybeans from the USA, USA prices dropped about 18%, and Brazil prices rose by 28%. The USA and Brazil account for 80% of the global exports of soybeans. Therefore, Chinese importers are buying more beans from Brazil. The short term effect of Chinese retaliation is for Brazilian bean farmers to be winners, US bean farmers the losers. The value of US bean crops in the field or in the bin was deliberately targeted by China.


    One possible response is to say to the impacted farmers,
    Be tough.
    Buck up and huck it.



    Diversification of crops theoretically would help. While China targets soybeans, the losses on beans theoretically can be offset by profits on other crops, like, say, corn. But unfortunately Mexico is targeting corn. The price of corn dropped by 13% since May.


    In my view, the duration of the trade war is a worry. The longer the retaliation persists, the more distress will be felt on midwestern farms. Will the president who promised to Make America Great Again work with Congress to provide subsidies to the farmers who will incur losses due to the trade war? I have not heard it promised, but maybe it will be promised in the Republican tents at the state fairs this year...


    US processors who are buyers beans and corn are short term winners as a result of the lower prices.

  2. #2
    Senior Member Williamsmith's Avatar
    Join Date
    Jul 2015
    Location
    Penns Woods
    Posts
    2,794
    If I could just broaden the scope of your topic for just one post.....this is what I’d say. An economy as large and complex as the US seems to me like those small gas engine airplanes someone in the neighborhood would get for a gift on rare ocassions. They would be the great attraction for the owner and invariably someone would get their finger cut in the propeller or abandon trying to keep the engine running and use the can of jet fuel to start entertaining brush fires in the countryside. They weren’t at all easy to get going and hey never operated efficiently for very long without down times. But when those suckers got going, they were grand fun.

    Trump is definitely fond of tinkering* with the engine and hopefully he will have some luck at keeping it airborn and wonderfully entertaining. But there is going to be talk of a collapse now and again. Collapse is a funny kind of word. You either get scoffed at as an imbecile or you create a following of cult worshipers but rarely does anyone significant pay attention to you until it is too late. That is unless a group of influential types makes a concerted effort to predict gloom and then by their own sheer will they can make a society believe collapse is impending.

    I would haul out the former Soviet Union as a marginal historical comparative. If one uses the term “gradual” collapse then he can mitigate the guffaws to a point. But the way I see it. If the engine quits running mid air, that model plane comes falling out of the sky with the glide slope of a rock. So all winners now should be wary that they could be a loser tomorrow what with all the tinkering going on. Hopefully that will balance out but it doesn’t seem to me to engender confidence in investors and a wildly eradicated stock market give some the jitters.

  3. #3
    Senior Member Rogar's Avatar
    Join Date
    Jan 2011
    Location
    Colorado
    Posts
    2,517
    So the price of corn and soybeans is dropping somewhat precipitously and in the mean time tariffs on steel or whatever else will make farm equipment more expensive and it costs more to borrow from the bank to for new equipment anyway because of rising interest rates. If I were a Trump supporter in farm country I'd be rethinking things unless this is very short term.

  4. #4
    Senior Member iris lilies's Avatar
    Join Date
    Mar 2013
    Posts
    12,216
    Quote Originally Posted by Rogar View Post
    So the price of corn and soybeans is dropping somewhat precipitously and in the mean time tariffs on steel or whatever else will make farm equipment more expensive and it costs more to borrow from the bank to for new equipment anyway because of rising interest rates. If I were a Trump supporter in farm country I'd be rethinking things unless this is very short term.
    I asked DH, farmboy and Trump supporter, about this a few days ago. He is unconcerned because he says someone else will buy the beans and etc. We shall see.

  5. #5
    Senior Member dmc's Avatar
    Join Date
    Feb 2011
    Posts
    899
    So the price of US grown crops should be lower for consumers here. All the midwestern farmers I know are pretty wealthy. They can adjust, either grow other crops or cut back their planting.

  6. #6
    Senior Member Rogar's Avatar
    Join Date
    Jan 2011
    Location
    Colorado
    Posts
    2,517
    Quote Originally Posted by dmc View Post
    All the midwestern farmers I know are pretty wealthy. They can adjust, either grow other crops or cut back their planting.
    If that is the case it would be nice to cut back on government farm subsidies to people who do not need them.

    My small sample size of farmers and ranchers is they are asset rich, maybe land rich if they aren't renting, cash poor in bad years and comfortable in good years. Some have side jobs or working wives with health and benefits. I suppose the deeper you get into the corn belt your looking at mega and corporate farms like Conagra and the scene changes.

    There are also tariffs on pork. It would be nice if the large scale concentrated animal feeding operations on hog farms that pollute the water ways would cut back production or switch to a different revenue source.

  7. #7
    Senior Member CathyA's Avatar
    Join Date
    Jan 2011
    Posts
    8,445
    The farmers around me here in central Indiana seem to be anything but wealthy.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •