China’s trade ban puts pressure on US soybean farmers as costs rise and profits disappear

Soybean farmers in the Midwest are bracing for another tough year as trade tensions with China have cut off their biggest export market and rising costs have pushed profits below break-even.

Chris Otten, a fourth-generation farmer from Illinois, said drought and low prices have turned routine harvests into a financial strain.

“We cannot harvest a crop that will cause us loss,” he said. “Everything we’re doing is going to put us in danger.”

The family is relying more on alfalfa and wheat to offset losses, although switching increases costs, he said. “Anytime you change something, your soil test and fertilizer rates change and your costs go up.”

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China is usually major foreign buyers According to the U.S. Census Bureau and the Department of Agriculture, nearly half of U.S. soybean exports will be purchased in 2024 – about $12.6 billion of total U.S. exports of $25.8 billion.

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

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According to the White House, China has not bought a single one bushels from American farmers, Growers say a sharp reversal is spreading across the Midwest.

Otten said its impact reaches beyond commodity prices.

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

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

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During remarks in the Oval Office on September 25, President Donald Trump said the administration plans to To use tariff revenues To support farmers affected by trade tensions, he told reporters, “We’re going to take some of that tariff money that we’ve earned, we’re going to give it to our farmers, who will be hurt for a short period of time, until the tariffs are passed to their benefit.”

The White House has not said when or how much aid might be provided, but officials have acknowledged discussions about possible aid.

Brazil has overtaken the United States as the world’s top soybean exporter, according to US Department of Agriculture data. The agency shows that Brazilian shipments are now outpacing US exports after years of steady growth in South American production and infrastructure.

In the US, demand for soybeans has increased as more processing plants have opened to turn the beans into oil and animal feed. That extra use has helped, but not enough to compensate. for decline in exportsUSDA data shows crushing capacity has increased every year since 2021, though farmers are still heavily dependent on foreign buyers to keep prices stable.

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Cash receipts from soybeans, a key measure of farm income, are projected to fall about 7 percent this year, a decline of about $3.4 billion as producers face lower prices and a smaller crop, according to the U.S. Department of Agriculture.

Farmers say they are tightening budgets, postponing equipment purchases and storing more grain in hopes of better prices later. Otten said he is doing the same but is optimistic the market will change.

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