LINN COUNTY, Iowa (KCRG-TV9) -- Time is running out to avoid a costly trade fight with China. And Iowa soybean farmers have felt the pain for weeks.
A small amount of soybeans remaining in one farmer's storage bin. Few Iowa farmers are selling beans now for cash due to prices down 20 percent since early May due to the threat of tariffs.
President Trump has vowed to impose tariffs on $34-billion dollars’ worth of Chinese products beginning at midnight Friday. And the Chinese are targeting U.S. products, like soybeans, in return.
But Iowa farmers didn’t have to wait until the tariffs are officially in place to see a real impact.
The soybeans look good in John Airy’s fields in Linn County. But pricewise, things could hardly be worse.
If he sold for the cash price on Thursday, he’d only get $8.14 a bushel. That’s more than two dollars a bushel less than those same beans would have sold for back in early May.
“The bottom line is we’ve got a rumor flying. That’s what’s scaring the market. And that’s what’s driving the market down,” Airy said.
Airy says the markets might not drop a lot more if China imposes the threatened tariffs in retaliation on Friday. That’s because current soybean prices already assume it’s happened.
China buys about 40 percent of the U.S. soybean crop. The percentage is even higher in Iowa—possibly 60 percent or more.
Another farmer, Denny Sejkora, says no one’s really selling Iowa beans to China now. Those sales usually happen in late fall or early winter after harvest season in the U.S. At the moment, China is probably buying soybeans from Brazil.
Sejkora, who also runs a grain hauling business, says some soybeans are still going to market. But it’s almost always the old, stored crop sold for higher prices locked in a few months ago.
He says most farmers don’t have to sell much, if anything right now, so the hope is to wait and see if the situation gets resolved.
“Hopefully, we will get it resolved and the USDA, with what they are planning, they are expecting to have it resolved before harvest,” Sejkora said.
For Iowa farmers, that’s when the real cash crunch for soybeans will come. That’s when the old beans have to leave to make way for the new crop.