Uncertainty. That is the feeling farmers across Leflore County have experienced since China proposed imposing 25 percent tariffs on U.S. goods including soybeans and cotton.
“The unknown is I guess what I am worried about, because I don’t have a clue,” said Chris Bush, a soybean and cotton farmer. “This is my 24th crop, and I have not personally experienced anything like this, so I don’t know what could happen.”
Earlier this month, in retaliation for the Trump administration’s tariffs on imports of steel and aluminum, China announced a 25 percent tariff on $50 billion worth of U.S. exports. The Chinese tariff would affect 106 products.
One of the most detrimental effects of the tariff to U.S. farmers would be on soybeans. China is the largest buyer of American soybeans and purchases 61 percent of its exports, according to Delta Farm Press.
The publication reported the day of China’s announcement on April 4, soybean prices dropped 40 cents per bushel.
Although the prices briefly went down, the market has been somewhat steady since then.
“Everybody is kind of at a standstill at what might happen,” said Andy Braswell, the Leflore County Extension agent for Mississippi State University. “The soybean market is holding up fairly well right now.”
The price per bushel Wednesday varied between $10.20-$10.45 depending on location and is higher than it was earlier in the season, according to Braswell.
He said he has not heard any major concerns from farmers in the area and does not think for now there will be any short-term repercussions.
Bush also has watched the market and has not seen the prices drop. Still, he said he felt concerned. If the tariff were to go into effect, he said, he still would plant soybeans and cotton unless the situation became dire.
“We don’t have much of a choice. Unless it just gets really bad, we would probably continue,” he said. “We would probably just plant more cotton instead of soybeans. We are still putting soybeans on cotton ground right now just because we cut the acres on cotton.”
For now — although he does not consider himself a very political person — Bush supports President Donald Trump’s decision but said, “I hope he knows what he is doing.”
“We just can’t have it for very long,” Bush said.“That is another thing that worries me is how long it would take before it did get better. I would hate to see a lot of farmers go out of business or have it change drastically because of that.”
Others farmers such as Mike Sturdivant III hope that Trump will come up with an alternative solution.
“We don’t operate in a vacuum anymore. What happens is we don’t just sell products domestically; it is global. What happens somewhere in the world does affect what we can and can’t do here in the United States,” Sturdivant said. “It is a much bigger issue than it used to be.”
Sturdivant also warned that the Chinese tariff would affect not only soybean farmers but also those growing cotton and corn.
“They are only required to take 4 or 5 million bales right now, but as their stocks dwindle — they have been declining for the last three or four years, because they have been using those stocks — the volume could increase. And, it really could affect U.S. cotton because we could be a major or mass supplier to the Chinese.”
Hank Reichle, executive vice president of Staplcotn, said in an email that those in the cotton and broader markets do not believe that “the trade skirmish” will turn into a trade war, but he said everyone is anxiously awaiting to see what’s next.
“When the news came out on April 4, cotton futures immediately sold off in heavy volume but have since recovered those price losses. Equity markets also have risen since then,” he said.
Reichle said the tariff would largely affect U.S. farmers because China is currently the second largest export market for U.S. cotton, and for years it was the large destination for U.S. cotton.
“China is the largest spinner of cotton in the world. They don’t grow enough to meet their own demand, and the mills there have a strong affinity for U.S. cotton,” he said.
“The Chinese textile industry needs our local cotton, and local producers need them to be able to buy their production.”
•Contact Lauren Randall at 581-7239 or lrandall@gwcommonwealth.com.
