SHELBY COUNTY — President Trump announced a 90-day pause on tariffs, except for China. It could have a major impact on soybean farmers in Indiana — which is one of the nation's top-producing states, ranking fourth in the country.
“It’s kind of overwhelming and unnerving,” said Rick Persinger.
He’s a generational farmer who grows half soybeans and corn on his 1,000-acre farm.
The feeling of uncertainty has lingered for him and some other local farmers since tariffs were announced this year.
“It just creates a lot of instability,” he told WRTV. “The price of grain has been down. Our fertilizer, some of our input has been up and so take the combination of the two it just affects our bottom line.”
Soybeans are used for animal and human food and industrial products like biodiesel and plastics.
Much of Indiana's crop is exported to China, but Persinger fears that could now change.
“There will be people that raise crops this year that probably will not show an income at all. They’ll be in the red,” he told WRTV. “When everybody tariffs our products, places will find other sources.”
On Wednesday afternoon, Trump announced the tariffs on China will remain in place and increase from 104% to 125%.
“Soybean production, about 60% of it is exported, and about 60% of the soybeans that are imported in the world, are imported by China,” explained Russell Hillberry, a Professor of Agricultural Economics at Purdue. “So the soybean farmers are very much dependent on the Chinese market.”
Hillberry said we saw a similar situation in 2018, during the President’s first term, but this time around things are different.
“We saw this in 2018 that there was a similar kind of trade dispute, but this looks to be much bigger than that,” he explained. “It's very important for Indiana, and it's very important for rural Indiana, you know, the tariffs are going to have other implications for Indiana."
“It leads to lower incomes. It can lead to lower land values. All these sorts of things cascade and you know, we've been in periods in the past in this country where farmers have really struggled to get by, and I'm concerned we may be going down that path again,” added IU Economist Kyle Anderson.
After the Chinese Tariff was announced, the American Soybean Association estimated the move could result in $5.9 billion annually in lost revenues and reduce U.S. soybean acreage by 2.2 million acres.
They also said in a statement:
This is extremely concerning as U.S. soybean growers continue to see hardships from the 2018 trade dispute and have never regained that lost market share. A prolonged trade war will do long-term damage to U.S. agriculture, destroy soy export markets, and open the door for South American competitors to replace the U.S. as suppliers.
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