US soybean farmers struggling even as prices recover

Chicago

SOYBEAN prices have regained the ground lost since China imposed tariffs on US farm goods. But for growers, a recovery could take years.

Saturday marked the anniversary of those tariffs taking effect. While Chicago futures are back above levels of 12 months ago, they are still well below prices before US-China trade tensions began escalating, and recent gains were driven by record rain that disrupted planting. Now, a disease that's forced the culling of millions of soy-eating hogs in China further clouds demand.

The trade war has cost American growers their biggest customer, and the industry has struggled to find other buyers big enough to fill the hole left by China. There are record amounts of beans in silos, bins and bags across the US heartland as South America picks up market share.

From October 2018 through March 2019, a span that covers the seasonal peak of US soy exports, China imported 21.7 million tonnes less of the oilseed from the US than a year earlier and bought 11.5 million tonnes more from Brazil, according to the US Department of Agriculture.

US farmers and traders alike continue to pay close attention to signs of a resolution, although market reactions to each trade talk headline have become more sluggish as participants wait for hard evidence of progress. Compensation payments are helping to cushion the blow, but grower groups say they prefer trade, not aid.

"Where are we headed?" asked Caleb Ragland, a Kentucky farmer and director for the American Soybean Association. "We are up against the one-year anniversary of the tariffs. What progress have we made in the 12-month period?" BLOOMBERG