"Devastating" was certainly the right word to describe the situation, but that's where the
|SD Farmers Talk Soybeans To China|
South Dakota's current soybean crop has experienced a $500 million paper loss since last Spring's market peak. That's a lot of pain for a small state like ours to absorb. We all have a stake in this. What's more, the need for getting through to Trump about the "devastating" potential of his trade policies isn't just a short-term thing. There are long-term urgencies to contend with. Agricultural media have been bursting with news about how China, the world's largest soybean importer, is making it a national policy to build domestic supplies by subsidizing its farmers heavily and seeking new suppliers, including Russia, to replace an American source that has suddenly turned toxic in a geo-political sense. Considering that about half of the U.S.A.'s annual soybean harvest of 4 billion bushels is exported and that two-thirds of those exports go to China, we're talking about a serious game-changer here. Even if China's rapacious demand for soybeans forces the country to take a while before it weans itself away from American supplies altogether, we run the risk of this game of tariff-chicken becoming a catalyst for changes in Chinese buying behavior that in turn creates a new network of suppliers for Americans to compete against. In that scenario, the downward pressure on prices will be persistent and painful.