Kate Thiel 8th Day Interview – Michigan Farm Bureau: Farmers Fear Tariffs Depressing Soybean Sales to China

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Kate Thiel 8th Day Interview - Michigan Farm Bureau - Farmers Fear Tariffs Depress Soybean Sales to China

Kate Thiel 8th Day Interview – Michigan Farm Bureau – Farmers Fear Tariffs Depress Soybean Sales to China

Upper Peninsula, Michigan – Kate Thiel, Field Crops Specialist for Michigan Farm Bureau, spoke about the complex and interrelated economic consequences of tariffs and other recent trade policy changes on Michigan farmers.  While the MFB supports efforts to level the playing field and fix certain trade issues, including historical issues that have arose in trade agreements, policies that pulled the United States out Trans-Pacific Partnership or now threaten NAFTA renewal, European Union Trade, Canadian Trade (Michigan’s #1 Trading Partner), Mexico Trade (Michigan’s #3 Trading Partner, and especially China Trade (Michigan’s #2 Trading Partner) are putting vulnerable Michigan farmers at a greater risk of failure and perhaps put them onto the road to an agricultural recession.  Michigan farmers and the Michigan Farm Bureau don’t feel that tariffs are the right direction.

Topics Discussed

  • Tariff Impact on Michigan Farmers
  • Trans-Pacific Partnership Pull-Out Consequences
  • Tariff Impact on China Trade (2nd Biggest Michigan Trading Partner)
  • Tariff Consequences on Canada Trade  (1st Biggest Michigan Trading Partner) and Mexico Trade (3rd Biggest Michigan Trading Partner)
  • North American Free Trade Agreement Importance to Michigan Farmers
  • Free Trade Impact on Increasing the Economic Pie for All Economic Partners
  • Farm Bureau Effort to Persuade Washington Decision-Makers to Take A non-Tariff Option
  • The Loss of Family Farms Accelerated by Traffics
  • Potential Serious Farm Recessions from Current Policies

Listen to Interview:

Tariffs Depress Soybean Sales to China Soy Export Chart 1

Tariffs Depress Soybean Sales to China Soy Export Chart 1

Topics Not Discussed in Detail but Relevant to Topic

Additional Information from Michigan Farm Bureau

Lost U.S. soybean sales to China expected to hit 23%

As fallout from the ongoing tariff retaliation battle between the U.S. and China continues to evolve, the news isn’t getting any better for Michigan farmers, especially soybean producers. Unfortunately it will likely get worse, following the announcement this week of an additional $200 billion in tariffs on Chinese imports by the Trump Administration.

According to Michigan Farm Bureau Field Crops Specialist, Kate Thiel, U.S. export figures prior to this week suggest that American soybean producers are already feeling the pain with cancellations of U.S. soybean orders from China skyrocketing – an ominous sign of things to come for other U.S. agricultural exports.

Tariffs Depress Soybean Sales to China Soy Export Chart 2

Tariffs Depress Soybean Sales to China Soy Export Chart 2

“The latest USDA export sales data released on July 6, covering trade through June 28, reveals that total lost 2017/2018 U.S. soybean sales have now exceeded 5 million metric tons,” Thiel said. “That’s more than 2 million metric tons higher than cancellations the same point in the 2016/2017 marketing year and more than 1 million metric tons higher than the level of cancellations throughout the entire 2016/2017 marketing year.”

American Farm Bureau Federation Economist Veronica Nigh says in the unlikely event that no more cancellations were to occur, and the U.S. ships the remaining 772 million metric tons in outstanding sales to China, U.S. soybean sales for the full 2017/2018 marketing year will still be more than 8.5 million metric tons below 2016/2017, a decline of more than 23 percent.

Ironically, says Thiel, the latest USDA planting report shows Michigan farmers devoted 2.3 million acres to soybean production, exceeding corn acres planted for grain at 1.85 million acres, making the economic impact of lost soybean exports that much more financially painful.

“The late planting season, due to excessive rainfall, motivated many Michigan farmers to switch tillable acres from corn production to more soybeans acres than originally planned,” Thiel said. “So when you talk about the perfect financial storm, many Michigan farmers are rightly concerned that the $250 billion high-stakes poker game of tariff retaliation has to stop and alternative trade negotiation tactics pursued sooner rather than later.”

Thiel estimates that new crop values for Michigan, corn, soybean and wheat producers, based on trend yields and planted acreage reports have declined a collective $520,000,000 since mid-May contract highs on the Chicago Board of Trade as of July 5, one day prior to the announcement of the additional $200 billion in new tariffs.

 

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