Potential trade war with China hasn’t impacted planting decisions
By Diego Flammini
American soybean producers don’t appear to be adjusting planting intentions despite a potential trade war with China.
The U.S. Department of Agriculture will release its 2018 planting intentions report on Thursday. Farmers indicated in February that their total soybean acres could outnumber corn acres for the first time since 1983.
The U.S. and China are currently applying tariffs on imported goods from one another. If China, the largest importer of American soybeans, imposes tariffs on soybean imports, famers may scale back their soybean acres and plant more corn.
However, that doesn’t seem to be the case, according to John Heisdorffer, a soybean producer from Keota, Iowa, and president of the American Soybean Association.
“I haven’t had any indication from farmers that they’re going to change anything this year,” Heisdorffer told Farms.com today. “In my area of Iowa, you’ll more than likely see an even split between corn and soybeans.”
Planting decisions likely come down to economics rather than international trade relationships, he said.
“It’s just cheaper to raise a soybean crop than a corn crop,” Heisdorffer said. “With the farm economy the way it is, producers are looking at ways to save money. Growing soybeans can be one way to do that.”
If the U.S. soybean trade relationship with China sours, other export opportunities exist for American soybeans.
Mexico imported 131 million bushels of U.S. soybeans in 2014-15, according to the Economic Research Service. The European Union imported 167 million bushels, Japan imported 80 million bushels and Taiwan imported 53 million bushels during the same crop year.
Heisdorffer encourages producers to keep up to date with the trade developments between China and the U.S. should any planting changes be required.
“We still have a month or so before planting and, until a seed is in the ground, we can always change our minds,” he said. “We need to keep an eye on the situation, how it develops and determine how farmers will be impacted.”