As foreign countries threaten and impose retaliatory tariffs on U.S. products, some Ohio soybean farmers are growing concerned.
Soybeans are the state’s top-produced crop: Ohio farmers planted upwards of 5 million acres of the legume last year, compared to about 3.5 million acres of corn.
Most of the harvest goes overseas.
“Overall for the United States, more than half of our crop gets exported,” said Kirk Merritt, executive director of the Ohio Soybean Association and the Ohio Soybean Council. “Of the markets that we export to, China is by far the largest and Mexico is number two.”
Last week, China imposed a 10% tariff on U.S. soybean imports in response to American tariffs. And while Mexico has not yet followed suit, it has threatened retaliatory tariffs too.
At the same time, cuts to USAID programs have also reduced demand for crops like soybeans, Merritt said.
Taken together, he worries the moves could negatively impact the state’s farmers.
“We would expect that it would result in lower prices for Ohio soybean farmers and probably a lower volume of exports,” he said. “Our hope would be that the administration would be able to negotiate favorable outcomes that would alleviate the need for tariffs.”
Learning from the past
This isn’t Ohio farmers’ first go-around with tariffs.
In 2018, China levied a 25% retaliatory tariff on U.S. soybean exports, which sent prices tumbling.
“Farmers hope for the good times and they prepare for the bad times,” Merritt said. “With that said, a shock to the markets like trade tension, a tariff situation could result in enough negative impact that farmers would be jeopardized. We did see that in 2018, and fortunately at that point the administration and Congress stepped in and provided assistance to farmers to try to tide them over until the tariffs were rescinded and the market picked back up.”
Since then, Merritt says Ohio farmers have tried to diversify the markets they sell to.
“We acknowledge that we need to not just sell to China and Mexico, we need to sell all over the world,” he said. “And we've made progress, but it takes time to do that.”
In the meantime, he says farming has become more financially challenging. Crop prices have dropped in recent years, while the cost of production has remained high.
“So we're in a challenging farm economy right now,” Merritt said. “Tariffs on top of that could be an additional challenge for farmers. It would continue to put downward pressure on the prices that farmers get for their crop, and also could continue to put upward pressure on input costs, like fertilizer and seed and the like.”
Hopes for the future
Despite talk of tariffs, Merritt remains hopeful.
“We do think that Ohio soybean farmers have a bright future,” he said.
But he also thinks the industry could use federal support as it continues to diversify export markets.
“Farmers want to sell into the markets, whether that's a domestic market or an international market,” he said. “They've shown that they can compete. Our soybeans are some of the highest quality around the world. The demand is there if we have the opportunity to capitalize on it.”
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