China trade freeze puts pressure on US soybean farmers as costs rise

Soybean farmers across the Midwest are bracing for another tough year, as trade tensions with China cut off their largest export market and rising costs push profits below the break-even level.

Drought and low prices have turned routine harvests into financial stress, said Chris Otten, a fourth-generation farmer in Illinois.

“We cannot harvest a crop that will put us in a critical situation at all,” he said. “Everything we do will put us in the red.”

He said the family relies more on alfalfa and wheat to make up for losses, although the switch increases costs. “Anytime you change something, soil tests and fertilizer rates change and your costs go up dramatically.”

American farmer demands the right to repair own equipment amid rising costs: “Money is tight”

China is usually Dominant foreign buyer Of U.S. soybeans, they will buy about half of U.S. soybean exports in 2024 — roughly $12.6 billion of the $25.8 billion in total U.S. exports — according to the U.S. Census Bureau and the Department of Agriculture.

Other major buyers include the European Union with about $2.45 billion, Mexico with about $2.3 billion, Indonesia with about $1.24 billion, Germany with about $1.05 billion, and Egypt with about $1.01 billion.

US soybean farmers face a financial crisis as China trade dispute threatens livelihoods

According to the White House, China has not purchased any aircraft Bushels from American farmers, It’s a sharp reversal that producers say extends across the Midwest.

The impact goes beyond the price of the commodity itself, Otten said.

“Trade wars work both ways,” he said. “It’s not just about buying soybeans, it’s also about the cost of fertilizers and chemicals. Most of that comes from outside the country, and it costs us a lot of money.”

With production costs rising nearly 50 percent over the past few years, he said even average yields cannot cover the cost of seeds, fertilizers and fuel.

Chipotle and Sweet Green are betting big on small farmers amid the agricultural crisis

During his remarks in the Oval Office on September 25, President Donald Trump said the administration was planning To use tariff revenues To support farmers affected by trade tensions, he told reporters: “We’re going to take some of the tariff money that we’ve collected, and we’re going to give it to our farmers, who are going to be hurt for a little while until the tariffs come in for them.”

The White House did not say when or how much assistance might be provided, but officials acknowledged there were discussions about potential assistance.

Brazil has overtaken the United States as the world’s largest exporter of soybeans, according to USDA data. The agency shows that Brazilian shipments now exceed US exports after years of steady growth in production and infrastructure in South America.

In the United States, demand for soybeans has increased with the opening of more processing plants to turn the beans into oil and animal feed. This extra use helped, but not enough to compensate Due to decreased exports. USDA data show that crushing capacity has grown every year since 2021, although farmers still rely heavily on foreign buyers to keep prices stable.

Trump administration moves decisively to prevent China from using US farmland as a ‘weapon’

According to the USDA, cash receipts from soybeans, a key measure of farm income, are expected to decline about 7 percent this year, a decline of about $3.4 billion as farmers face lower prices and shrinking harvests.

Farmers say they are tightening budgets, delaying equipment purchases and stockpiling more grain in the hope of better prices later. Otten said he does the same but remains optimistic that the market will change.

Get FOX Business on the go by clicking here

“We’re just counting on it rising,” he said. “We can’t afford to sell at a loss. But we’ve seen ups and downs before. It will come back, as it always does.”